If you listen to our politicians, there is a strong consensus on climate change. It consists of four parts. First, carbon emissions are causing significant changes to our climate. Second, we need to take urgent action to reduce those emissions, including reaching net zero by 2050. Third, we have already made good progress in reducing the UK’s emissions. And fourth, the steps we need to take to reduce emissions further will also bring many positive benefits for society.
Many will welcome this consensus but the problem is that not every part of it is entirely true. On the first two points, the vast majority of experts – both scientific and economic – are supportive. Man-made climate change is now rarely questioned and the consequences of failing to reduce emissions are widely seen as creating unacceptably high risks.
The UK’s progress on reducing its carbon emissions – down 42 per cent since 1990 – is, at first sight, impressive, and provides encouragement that we can go further in reaching net-zero emissions by 2050. But there is a problem with this statistic, to which I will return in a moment.
As for the fourth part – that the measures we need to take to reduce emissions constitute a win-win for society – this does not stand up to scrutiny and risks undermining trust in everything else that is claimed.
By way of example, let me start with the Prime Minister, who is characteristically bullish and optimistic on the subject. At the Leaders Summit on Climate in April, he declared that “this was about growth and jobs”, noted the decline in UK emissions since 1990 over a period in which we have seen GDP grow by 73 per cent and stated that “cake, have, eat is my message to you”. The message appears to be the message that reducing carbon emissions not only tackles climate change but is in itself good for the economy.
To be fair, Boris Johnson may be more unashamedly cakeist than anyone else, but almost every other politician – whether President Biden or Ed Miliband – has the same message. Tackling climate change will create jobs and be economically beneficial.
It is certainly true that new industries and new jobs will be created by the measures that we take to reduce emissions. This will be good news for some businesses and for some people but, in terms of the wider economy, the new jobs created are a cost, not a benefit, and will have to be paid for by taxpayers or consumers.
If reducing emissions requires lots of jobs, this will mean greater costs. And if it is the case that reducing emissions is particularly labour-intensive (as is sometimes argued), it is worth remembering that “labour-intensive” means “low productivity”.
These costs may well be worth paying but they are costs all the same. One of the risks with all the talk of “jobs” is that we pursue policies that make tackling climate change more expensive than it needs to be by prioritising measures that supposedly create jobs rather than most efficiently reduce emissions.
Let us look at what we should be doing. We should be investing heavily in research and development – clean energy; energy storage; how best to remove carbon; artificial meat; desalination processes and so on. There are reasons to be optimistic that this will have real benefits over time but there are significant upfront costs and we may not see the benefits for many years.
We also need to change consumer behaviour. As Dieter Helm argues in his recent book, Net Zero: How We Stop Causing Climate Change, the objective of climate change policy should be to reduce carbon consumption. As I mentioned earlier, our record in reducing carbon production appears impressive, but our carbon consumption has fallen less significantly. We have outsourced much of the production to China and elsewhere.
If we want to reduce carbon consumption, we should make sure that the costs of carbon are incorporated into consumer prices, allowing the market to incentivise the lowering of carbon emissions. We have made some progress on this with an Emissions Trading Scheme but a carbon tax would be better. In order to prevent a domestic carbon tax that simply outsources carbon-emitting activity, Helm makes the case for a carbon border adjustment mechanism – capturing the cost of carbon emissions on imports. All of this inevitably results in an additional cost for consumers – indeed, that is the point.
If we are serious about achieving net zero by 2050, then we will have to pursue policies that will involve costs for both taxpayers and consumers. It is not surprising that politicians do not want to confront the public with the consequences of pursuing bold targets – much better to maintain support by highlighting the opportunities and downplaying the difficulties.
It is not, however, an approach that will survive contact with reality. Either governments will avoid the hard choices, in which case we are simply not going to meet the net zero target, or an unsuspecting public will revolt when confronted with the costs. The current political consensus won’t hold if it is based on concealment.
Reducing carbon emissions is not about jobs and growth and it will not be cost-free. Wishful thinking and boosterism won’t be enough to control climate change; it will be necessary to risk some honesty with the public.