Britain has been a leader in the fight against climate change – but more needs to be done

Following recent warnings of imminent environmental catastrophe, Liberal Democrat leader Vince Cable considers five ways to accelerate the global recovery

Polar bears have seen their habits drastically change in recent years (iStock)

One of the most sobering experiences of my professional life was working in the team in the 1980s which produced the Brundtland report, Our Common Future, for the UN secretary general. The report helped to define the concept of sustainable development, the recognition that economic growth (or development) has to be environmentally sustainable, respecting the importance of environmental limits and costs. It was sobering partly because it brought out clearly the nature of the threats; the scientific findings of global warming and climate change emerged from the Bellagio conclave at that time, and the scientific work on mass extinctions was solidifying.

It was also sobering because of the very different reactions of the representatives of rich and poor countries. While the former demanded a reversal of the fixation with economic growth and its environmental, resource-depleting, side effects, the latter wanted more growth in living standards to counter the environmentally negative effects of poverty: high birth rates, lack of facilities for sanitation, polluting forms of primitive energy like green wood and charcoal burning.

The last generation has seen, through the rapid growth of China and, now India, Vietnam, Korea and elsewhere, the latter view predominate. Moreover, that view has been largely vindicated, as economic development has fed through, sometimes dramatically, to lower fertility and population growth, and energy efficiency.

It is usual in progressive politics to be deeply despondent about environmental threats and to warn that “the end is nigh”. It may be, and the scientific warnings on climate change are, indeed, alarming in the extreme. But it is also right to start with the positive and the success stories. In the UK, many environmental indicators have improved, including river and beach pollution; levels of most air pollutants – including sulphur, lead and particulates – have reduced thanks to tougher regulation; there is a high level of public engagement in recycling and composting and a growing understanding of the importance of the “circular economy” in business; and there is a growing consumer demand for (and supply of) low-emission vehicles, renewable energy and food, timber and other products boasting high environmental standards.

At a global level there is a successful multilateral agreement, in which the UK took the lead, to curb a major threat to the planet: the Montreal Protocol on the depletion of the ozone layer. In the first tentative steps in dealing with the enormously bigger problem of climate change, Britain is something of a world leader, with the world’s first legally binding Climate Change Act, which governs CO2 and other greenhouse gases, emissions of which have fallen by more than 40 per cent in Britain over 30 years, though this is in part due to the economic slowdown and more imports as well as a switch from coal to gas and renewables). In 2017, for the first time, low-carbon sources (nuclear and new renewables) surpassed fossil fuels as the biggest source of electricity in the UK – despite a current government seemingly uninterested in the problem.

Of course, the glass is half empty as well as half full and the list of unsolved or mounting problems is formidable: upward revisions in temperature forecasts at a global level, apparently increasing numbers of species lost to tropical deforestation and intensive agriculture, and oceanic pollution from non-recyclable plastics. Perhaps the biggest threat, now, is political: the rejection of science by populist leaders and movements, the growth of nationalism and disdain for cooperative approaches to shared international problems. The politics of identity has reinforced the idea that there is no such thing as a “common future”.

As Britain is no longer one of the world’s biggest economies – we are now eighth or ninth in purchasing-power terms – our ability to solve the world’s problems directly is limited, but there is much to be done at a national and European level, and we can exercise leadership within agreed global frameworks. Britain starts from a position where there is already a high level of awareness of environmental issues and consensus, a strong scientific base and strong regulatory institutions. There is no need to reinvent the wheel. I suggest five different ways of taking the environmental agenda forward.

The first is ensuring that environmental policies are not just ad hoc, random interventions responding to the politicians’ fancy or the public mood, but baked into the way we make economic decisions. There is already a Natural Capital Committee to ensure that “natural capital” is properly accounted for, and any depletion of it is counted as a negative to set against the positive of growth (conventionally measured). There also needs to be a consistent and environmentally aware system for evaluating big new projects. The recent rejection of the Welsh tidal lagoon project was due in part to a government refusal to consider the long-term time horizons and very low discount rates applicable in projects of this kind. And there has to be a consistent and rational system for applying the “polluter pays” principle.

The whole idea of environmental taxation has become somewhat discredited by the fuel duty escalator, which had the effect of penalising vehicle use in remote areas. President Emmanuel Macron has also now discovered that careless use of environmental taxes is politically disastrous. A better approach is charging for road use in congested cities where there are alternative modes of transport. The important concept of a carbon tax has been undermined by its use (through the carbon price floor) as a revenue-raising device rather than remaining focused on incentivising fuel switching.

A giant piece of ice breaks off a glacier in Argentina (Getty/iStock)

Concerns about British-based companies being disadvantaged relative to overseas competition do need addressing. However, a proper carbon tax, and the use of fiscal instruments such as road-user pricing, do have crucial roles to play in addressing climate change and other negative environmental effects.

One important way of moving to a sustainable economy is to ensure that the financial system directs money away from polluting activities

Second, one important way of moving to a sustainable economy is to ensure that the financial system – capital markets in particular – directs money away from polluting activities and towards environmentally friendly ones. To a degree, this is happening. The governor of the Bank of England, in his capacity as financial regulator, has exposed the risk of financial institutions owning fossil fuel assets which are then “stranded” by public policy measures to achieve climate targets, including a rapid switch to renewables.

Tougher disclosure rules, and clarification and strengthening of the fiduciary duties of pension and insurance companies, would add to the pressures to invest in clean energy rather than fossil fuels. One of the big environmental achievements of the coalition government was to set up the Green Investment Bank, which was responsible not just for de-risking large-scale investment in offshore wind but also for promoting innovative schemes, like LED street lighting in Glasgow, that would not otherwise have occurred. The Conservatives’ decision to sell it off was a massively retrograde step, and there is now a big gap in financial markets for higher-risk green projects, where state intervention would again have a beneficial catalytic impact.

Mark Carney has pushed for the development of green bond markets (Reuters)

Third, it is crucial to have an industrial strategy to link together different activities which depend on each other. Electric cars won’t develop unless there is a charging infrastructure to support them. A revolution in rail investment won’t happen without there being a supply of trained people like tunnellers, and train manufacturers to supply the vehicles.

One success story has been the investment in manufacturing wind turbines in Hull – but that, in turn, has required the parallel development of skills.

Fourth, there are some sectors of the economy where radical reform is needed to make growth sustainable. Farming is no longer governed by foolish common-agricultural-policy rules incentivising overproduction, but under the new revised system farm payments are based on acreage rather than on carrying out specific environmental stewardship roles. A subsidy system focussing on the preservation and enhancement of natural capital is starting to be funded under the common agricultural policy but has a long way to go. Another sector where little has been done and radical action is required is food waste. Estimates suggest millions of tons of food is wasted in Britain every year; meanwhile, UK topsoil is becoming infertile but could be helped by mandatory food-waste collections boosting composting.

Fifth, and of most fundamental importance, the UK is not on track to meet its legally binding emissions targets to contribute to its climate change objectives, despite the impressive gains in the decarbonisation of the electricity sector. The contribution of the transport sector, and especially aviation, to decarbonisation is lagging behind and this must be a future focus of environmental campaigning.

These are all important and necessary changes, and provide a very full agenda at local, national and global levels. There is some attraction to the idea, popularised in the US by a new generation of Democrats, that a unified plan of action rather than lots of random activities can be constructed around the idea of a Green New Deal. The idea of a Roosevelt-style New Deal is appealing because of its ambition and the understanding that our current physical infrastructure – of energy generation and distribution and of transport – needs radical overhaul.

So far, the economics of it is hazy. Using carbon taxes or similar signals to influence consumer demand and the use of green technology is a better approach than some centrally driven, top-down, plan. However, the principle of having a unifying environmental theme to policy is a powerful one. And it reflects and reinforces the idea that there is a common future – an antidote to the divisive politics of identity.