Like many other politicians, Joe Biden talks a good game about the need to tackle global heating. Climate change is an “existential threat”, the US president said last week, as America sizzled amid record-breaking temperatures.
Biden had to do something in response to what António Guterres, the UN secretary general, described as the boiling of the planet. The White House announced a series of measures – such as improved access to drinking water and planting more trees – in response to what has been the hottest month on record.
To Biden’s critics, this is fiddling while Rome burns. They say he should be declaring a climate emergency, which would allow him to block new fossil fuel projects without congressional approval. As it is, Biden has showed a marked reluctance to take this step. There are clearly limits to what the US government is prepared to do to counter this “existential threat”.
It is a similar picture in the UK, where the Conservative party’s surprise victory in the Uxbridge and South Ruislip byelection was in large part due to the plans by London’s Labour mayor, Sadiq Khan, to expand the ultra-low emission zone (Ulez) to the capital’s outer boroughs.
Put simply, the Ulez seeks to improve London’s air quality by placing a charge on the use of older petrol and diesel vehicles, which tend to be not just the most polluting but also the most likely to be owned by poorer households already struggling with Britain’s cost of living crisis.
The byelection defeat clearly rattled the Labour leader, Sir Keir Starmer. “We are doing something very wrong if policies put forward by the Labour party end up on each and every Tory leaflet,” he said. “We’ve got to face up to that and learn the lessons.”
In their different ways, recent events in the US and the UK show just how difficult it will be to put the global economy on a saner and more sustainable course.
Problem number one is that politicians struggle to think beyond the next election. Biden is running for re-election next year, and Starmer wants to end a run of four successive defeats for Labour. The temptation to put off tough decisions to another day is powerful.
That’s because of problem number two: the lack of consensus about what needs to be done and over what time period change needs to happen. What’s needed is for Democrats and Republicans in the US and Labour and the Conservatives in the UK to announce that they are jointly signed up to a course of action that will extend well beyond one presidential or parliamentary term. The failure to forge a bi-partisan approach provides an incentive for parties to look for short-term political gain, even when doing so risks longer-term harm.
There’s a reason for that, namely that some of the policies required have upfront costs that make them unpopular for those that find them hard to bear. Telling a key worker who can only afford an ageing diesel car that they will have to pay £12.50 a day to drive to their job is never going to be easy, especially in a period when living standards are being squeezed. There is no getting away from the fact that the Ulez expansion is a regressive tax and, as Khan has found, changes that make hard-up people even worse off breed anger, and that anger will inevitably find a political outlet.
So problem number three is that there are a lot of poor people in the UK and the US. And problem number four is that not nearly enough is being done to help these people make the green transition. For that to happen, there would need not just to be a recognition of the link between global heating and grotesque levels of inequality, but a willingness to do something about it.
In the developed west, this means using the financial firepower of the state to reduce the number of losers from the green transition. In developing countries, it means transfers of both money and technical knowhow, so that countries that need growth as part of their anti-poverty programmes minimise the use of fossil fuels. Meeting the “existential” threat that Biden talks about requires action not just in the UK or the US but in China, India and other emerging countries, too. Climate action on a global scale will be costly.
That brings us to problem number five. The change from one economic paradigm to another – the creative destruction that the political economist Joseph Schumpeter talked about – is hard because it requires those who have invested in existing industries to recognise that the game is up. This transition can be prolonged if those wedded to the status quo have invested huge sums and wield enormous power, as is the case with the fossil fuel industry.
The solution to these problems lies ultimately in the hands of politicians such as Biden, because they alone have the power to remove barriers to change.
As the rapid responses to the global financial crisis of 2007-09 and the Covid pandemic proved, governments can act speedily, collectively and decisively if the crisis is deemed big enough. When the banks were facing their existential crisis in 2008, money was created to bail them out and prevent a second Great Depression. In 2020, economies were effectively put on a war footing.
Should the same approach be adopted in the fight against climate change? Yes. Is there any sign of this happening? Not on the scale required. Effectively, this is like the 1930s, when there was resistance to meeting the threat of fascism. Then, as now, what was needed was rapid rearmament. Then, as now, what we’re getting is a failure to do what needs to be done.
