Why Don’t We Just…
make our economy work
for people and the planet?

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Amid shocking revelations about illegal Christmas parties, the release of a new government report on the climate crisis last week went relatively unnoticed. It found that if we allow global temperatures to rise by 2C, the climate crisis could wipe 1 per cent a year off the UK’s economy by 2045. Problems like decreased food production, flooding and infrastructure destruction from extreme weather could each cost at least £1 billion a year. The climate crisis and the rules of our economy are tangled together – we can’t address one without the other.

Like creating the NHS or going to the moon, the Green New Deal is ambitious but achievable

It might be hard to connect with during the cold winter months, but the past seven years have been the hottest on record. Last year the International Panel on Climate Change (IPCC) issued its starkest warning yet in the wake of wildfires, floods and heatwaves from London to Colorado, Germany to Pakistan: the climate crisis is already happening as a result of how we power our economies. Last November, governments met in Glasgow for the UN climate talks, with the hope of presenting plans to limit global heating to 1.5C. But the conference was a disappointment. It came hot on the heels of an autumn budget where Rishi Sunak barely mentioned the climate, and a net-zero strategy that fell far short of what we need.

At the same time, the past 22 months of the pandemic have been extremely difficult for all of us and have widened inequalities in the UK. But it’s also made us realise what’s important: our health, our loved ones, and our communities. Yet for the last decade, the benefits of growth have not been fairly distributed, living standards haven’t budged, and swathes of our country have been held back. When facing down the climate crisis, we need an answer to the question that dominates our politics: how do we get the economy to work for everyone?

That is the question at the heart of the government’s favourite phrase: ​“levelling up”. This government has made levelling up communities around the country one of its flagship missions. But despite a lot of lip service, it has not produced a strategy to get it done.

The government will not be able to level up struggling parts of the country without facing up to the climate crisis. The UK’s commitments to cut our emissions mean the economy will have to change a great deal in the next decade. This has to be done in a way that reduces inequality and improves people’s lives. If we take the right action, we can meet everyone’s needs while averting climate breakdown. Fail to act, and we repeat the economic shocks of the past, with increased inequality and climate disaster across the globe.

This is a big challenge and we urgently need a practical, bold solution. But the good news is, we have a plan: the Green New Deal. The Green New Deal is an economy-wide plan that puts the climate crisis and living standards at the top of the government’s agenda. It would not only curb the worst effects of climate breakdown but would reprogramme our economy so it works for everyone. Like creating the NHS or putting a person on the moon, the Green New Deal is ambitious but achievable. And with the climate emergency accelerating, it is our only option.

At the New Economics Foundation we’ve set out five steps the government can take.

First, invest the equivalent of 2 per cent of the UK’s GDP every year to 2030 into cutting emissions while raising living standards. This would create at least one million well-paid, future-proof jobs.

Second, it should redesign our financial regulations so that businesses no longer invest billions in dirty, polluting projects, and instead put their money towards clean industries.

Third, it should make low-carbon living possible for everyone in the UK, by changing our taxes to make them more progressive and greener.

Fourth, it should give back more power to the UK’s devolved nations, regions and local places so they can make their own decisions about how to prepare for a low-carbon future, while making themselves better places to live.

And fifth, the government should take responsibility for the large amount of emissions the UK has created in the past, by cutting carbon faster than poorer countries, and supporting those in the global south to cut their own emissions and adapt to our changing climate.

It’s time for the government to realise that it cannot level up the UK without a Green New Deal.

Margaret Welsh is a communications officer at the New Economics Foundation (neweconomics.org, @margaretlwelsh)

Photo: “The climate crisis is already happening”. Applebury after Storm Ciara, 2020 (Shutterstock)

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