The IPCC Working Group III report. The latest instalment of the Sixth Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC) was released on 4th April, focused on climate mitigation. A Summary for Policymakers was also published, as well as a Technical Summary. The report concludes with a “now or never” call to action: that greenhouse gas (GHG) emissions must peak by 2025 if there is to be any hope of capping warming at 1.5 degrees above pre-industrial levels. UN Secretary-General António Guterres said: “It is time to stop burning our planet and start investing in the abundant renewable energy all around us”.
Key findings. The report’s key findings (‘headline statements’) include:
The scale of the action needed. IPCC Working Group III has modelled over one thousand different potential global climate scenarios, divided into eight broad categories from C1 (below 1.5 C of warming) to C8 (warming of more than 4 degrees), outlining possible 21st century global warming outcomes. Carbon Brief’s Zeke Hausfather explains how each category of scenarios requires peak CO2 emissions and net-zero CO2 to occur by a certain year. C1, for example, requires peak CO2 emissions to occur between 2020 and 2025 and net-zero carbon CO2 to be achieved between 2050 and 2055.
Disparities in emissions by region. Lead IPCC author Sarah Burch notes that this is “the first time we’re seeing evidence of real, sustained decreases in greenhouse gas emissions” in places with the caveat that this is only “from some countries”. About 40% of the last decade’s emissions can be attributed to Europe and North America and only about 12% are produced by East Asia (including China).
Room for hope? Business Green’s Michael Holder highlights the IPCC report’s claim that “The world already has the technologies, expertise, and financial capabilities across every sector of the economy to halve global greenhouse gas emissions by the end of the decade.” Likewise, The FT’s editorial called the report “both stark and compelling” and said that “the good news is that a lot of what is needed is under way.”
Expectations for the Energy Security Strategy. The government is expected to release its Energy Security Strategy this Thursday. Business Secretary Kwasi Kwarteng has suggested that the government may tackle energy supply issues by “expanding renewables and… looking at new nuclear” but Cabinet tensions over new energy spending have been well documented. The BBC has written up a summary of what we can expect in the strategy.
Public ownership in the energy sector. Politico’s London Playbook reports that the Business Secretary is setting up ‘Great British Nuclear’, a new government-owned company (akin to HS2 ltd), staffed with nuclear and commercial experts to “identify large sites, cut through planning red tape and raise private finance.”
Declining trade union power = increased exposure to inflation? Exploring the history of inflation since the 1970s in the UK, James Meadway explains why workers' pay has never been this exposed to inflation; 40 years of declining trade union membership and collective bargaining power means real pay increases will be increasingly harder to secure.
Corporate concentration, monopoly profits and inflation. Economist Robert Reich has produced a video explaining how “mega-corporations are using inflation as cover to push prices even higher and reap record-setting profits.”
Rising household debt in the cost of living crisis. Due to higher interest rates, the I’s Huge Gye reports that households will spend £1000 more each year (5% of disposable income) on debt servicing repayments as the OBR forecasts household debts to rise by 52% over the next 2 years. Latest polling from Jubilee Debt Campaign’s (JDC) shows 3 million more people (on top of the 11.5 million currently) fear they will be plunged into debt over the next 6 months,
Asset ownership and a K-shaped recovery. Commenting on Power to Change’s new campaign, ‘Take Back the High Street’, Christine Berry explains how the pandemic has intensified inequalities relating to asset ownership and widened some of the political and economic cracks in the UK’s development model.
The housing affordability crisis. Positive Money’s new report ‘Banking on Property’ features polling showing that a majority (54%) of homeowners would be happy with their homes not increasing in value if it made housing more affordable for others (Bloomberg coverage here). The report proposed taxing multiple property owners, more protections for renters, and an updated mandate for the Bank of England to tackle rising house prices. (See their launch video and Twitter thread explainer.)
Tax-free allowances are larger than benefit payments for the first time. The Fabian Society’s new report on ‘Shadow Welfare’ argues that high income households have been prioritised in the Chancellor's response to the cost of living crisis, as the decision to raise National Insurance thresholds means the tax-free allowances given to a single working adult will be higher than payments to a Universal Credit claimant. The New Statesman’s Harry Clarke-Ezzidio has the detail.
Mapping council tax rises. Campaign group Fairer Share have released an interactive tool showing how much Council Tax bills for Band D properties will rise in each local authority area this year.
Financing public debt. The Institute for Economic Affairs’ fellow Julian Jessop debunked the Chancellor’s claim that the UK government is forecast to spend £83bn on debt interest next financial year. He highlighted that the additional payments were not due to a “higher level of borrowing or debt” but “due to the RPI uplift” and that this makes arguments against immediately lowering public debt much weaker.
HMT vs OBR. Anonymous briefings suggest Rishi Sunak “viscerally hates the OBR” for overstepping its role by making “normative policy judgements” and overly pessimistic economic forecasts which ruined positive media coverage of the Spring Statement. The Institute for Government’s Olly Bartrum defended the OBR’s mandate to forecast the impact of fiscal decisions made by the Treasury, regardless of whether it is politically expedient for the government or not. PEF’s James Meadway reminds us that the OBR actually has a reputation for making particularly hopeful forecasts, consistently making overly optimistic predictions about productivity growth since 2011.