New developments. The past week saw both the announcement of the UK’s new emissions target - an increase in ambition from the target announced just four months ago in December - and Biden’s Leaders’ Summit on Climate, “a starting pistol for the six-month countdown to COP26”.
New UK target. The UK announced a new goal of cutting emissions by 78% by 2035 compared to 1990 levels, a more ambitious target than the previous 68% target announced in 2020. For the first time, the target includes emissions from international aviation and shipping, as has been campaigned for by green activists and civil society.
“Magic decarbonisation tree”. The 78% target is in line with the Committee for Climate Change’s (CCC) advice (Carbon Brief summary). But the Government has not followed the CCC’s policy recommendations, particularly around politically difficult topics such as reducing meat consumption and other behavioural changes, instead emphasising “new green technologies”. BusinessGreen’s James Murray argues that the Government cannot rely on such “techno-optimism” to meet its targets, and must instead show political leadership and policy development on trickier areas of the transition to net zero.
~~New proposal for better targets. A new, peer-reviewed paper in the Frontiers in Climate journal examines the issues with treating emissions reductions and offsets as equivalent in climate goals, and suggests different and differentiated targets to encourage ambitious and just climate action.
Biden’s summit. A number of countries (re)announced stricter emissions targets at the US Leaders’ Summit on Climate last week. Achieving these would close just ~13% of the “emissions gap” (the gap between forecast emissions and the level of emissions in 2030 consistent with 1.5C of warming), leaving a gulf between present commitments and ambitions to limit warming and avoid some of the worst effects of climate change.
~~Critique of Biden’s plans. In his in-depth analysis of Biden’s climate plans, Adam Tooze concludes that “for all the high-flown rhetoric… Biden’s climate programme appears hobbled by constraints, lacking in focus and inadequate in ambition”.
Fair shares. How much should each country spend on mitigating climate change? There are differing analyses of each country’s “fair share” based on interpretations of two principles built into the Paris agreement (see Civil Society Review pp. 14-16)
~~Responsibility for climate change: based on accumulated historical emissions, with some interpretations e.g. excluding or underweighting emissions arising from fulfilling basic needs.
~~Capacity to help: countries’ financial capacity, which may factor in within-country inequality by weighting wealthy citizens’ income more strongly.
International justice and climate finance. For major emitters and wealthy countries like the US and the UK, “fair shares” analyses often amount to over 100% of domestic emissions, necessitating international action to support poorer and less responsible countries. E.g. ActionAid USA and other civil society groups have called for a US “fair share” emissions reduction of 195%, with 70% coming from domestic reductions and 125% from supporting poorer countries through “climate finance”, while War on Want has argued for a 200% emissions reduction in the UK by 2030.
~~Biden’s climate finance plans. Many campaigners have expressed their disappointment at the US pledge to contribute $1.2bn to the UN’s Green Climate Fund, which does not even cover the shortfall between money promised under Obama that was then not delivered under Trump. Alex Lenferna of 350 Africa told Climate Home News the sum was an “insult to the Global South”. (See also The Third Pole’s Joydeep Gupta’s assessment of the state of play: “Biden’s pledge inadequate for climate justice”).
~~Private finance. The Guardian editorial on Biden’s climate plans cites Professor Daniela Gabor’s research, criticising the US approach for leaving poorer countries dependent on private finance and calling for rich world concessions on sovereign debt and climate finance at the G7 and COP26.
~~UK climate reparations. Lawyer and organiser Harpreet Kaur Paul made the case for “reparative climate justice” in her report for Common Wealth based on a “fair share" analysis. Recommended reparative mechanisms cover climate financing, debt cancellation, trade and company reform, and needs assessments.
Road ahead. As we approach COP26 in Glasgow later this year, the issues above - international climate justice and finance, ambition and feasibility of emissions targets - will continue to climb the agenda. E3G gives an overview of the climate-diplomatic run-up to November.
Work and industrial strategy
Economic insecurity long-read. Sarah O’Connor wrote the first of a series of articles for the FT making a case for a ‘New Deal for the Young’. Future pieces in the series will explore housing, pensions, job quality, education, climate and taxes in depth.
‘Emergency solution’ to save struggling creative sector. A group of famous musicians and creatives (Massive Attack, Portishead, IDLES, Daniel Day-Lewis, Stephen Merchant and more) joined Bristol United Guild, a community interest company which aims to support creatives who have suffered financially as a result of the pandemic.
~~Pandemic ‘winners’ to resource creative sector. The proposal includes the “guild working as an advisory body to quickly identify recipient spaces, places, individuals, bodies, groups and projects” in need of support, where “commercial entities… who have seen their operations expand positively during the pandemic period” can help by “maximising opportunities of space, place, materials, education and investment”.
Industrial strategy as electoral strategy? Innovation policy Professor Richard Jones summarised the changes to UK industrial strategy this year and concluded that only a strong industrial strategy can meet the raised expectations of Red Wall voters of ‘leveling up’ living standards by the next general election.
Public support for green taxes. A survey for Green Alliance found ‘unequivocal’ public support for green taxes such as carbon taxes and greening the VAT system. The authors hope the report “gives Government a mandate to start to green the tax system through Treasury’s imminent Net Zero Review.”
New ‘Free Market Forum’ group of Tory MPs. A new group of 40+ Conservative MPs have joined together “to refocus the political debate after the disruption of 2020-21 and to once again make the case for a smaller state and individual liberty.” The group is united in agreement that “the problems facing Britain cannot be solved by continuing to borrow, passing debt on to future generations, and refusing to face up to the scale of the challenge”.
~~Social infrastructure investment. The taxes are proposed as part of the $1.5tn ‘American Family Plan’ to reduce childcare costs for families and make prekindergarten and community college free for all, as well as establishing a national paid leave programme.
~~What would this look like in the UK? The Women’s Budget Group’s Mary-Ann Stephenson and Susan Himmelweit called for emulating Biden’s investment in social infrastructure in the UK, advocating a care-led recovery based on bringing the UK’s share of employment and pay in care up to Scandinavian standards. Their analysis shows this could create 3.6% of GDP, close the gender employment gap and create 2m jobs (2.7x as many as the equivalent investment in physical infrastructure).
Major poll on public support for economic reform in the West. Pew Research Centre polled public attitudes across Western Europe and the US, finding that majorities support government-sponsored job and skills training in all countries surveyed and other significant economic interventions; 4 in 10 right wing voters in the UK want ‘major economic change’ and 4 in 10 higher earners want tax rises on the rich.
Business and regulation
White Paper on Audit Reform. Following the high-profile accounting scandals that led to collapses at firms like Carillion and BHS, the Government launched its White Paper on Audit Reform last month, threatening caps on the market share of the ‘Big Four’ accounting firms if competition does not improve.
~~“Central problems” unaddressed. A recent report from the IPPR warned proposed measures could miss key issues in the audit sector, pointing to “aggressive accounting practices” that “present an overly optimistic version of a companies finances, despite weak financial foundations that eventually lead to business collapses or seriously weakened firms”.
Highest annual growth rate in UK house prices amidst economic crisis. Commenting on ONS estimates for UK average house prices, the BBC’s Andy Verity argued that the house price boom is “the inflation we should really fear” and only benefits “the older generation who were able to ride this ongoing 50-year surge in house price inflation and are now in a position to downsize” (Twitter thread).
~~Human cost of intellectual property. Former UN Assistant Secretary-General for Economic Development Jomo Sundaram argued “refusal to temporarily suspend several World Trade Organization (WTO) intellectual property (IP) provisions to enable much faster and broader progress in addressing the Covid-19 pandemic should be grounds for International Criminal Court prosecution for genocide”, in an article for Bangladesh’s largest English language newspaper in February.
Net-Zero Banking Alliance. The UN Environment Programme Finance Initiative convened 43 banks from 23 countries to launch the Net-Zero Banking Alliance, an initiative to align the lending and investment portfolios of banks to support the transition towards net-zero emissions by 2050.