We are into the era of hard climate choices. The low-hanging fruit of climate action will be exhausted within a decade, leaving only those hard-to-transition industries and transformations that will radically change our everyday lives. And it’s likely that the transition to a low carbon economy will be disrupted by climate change, the result being that efforts to transition will stall and targets will be missed, making future climate change worse.
The UK is, apparently, halfway towards its net zero emissions target. But this accounting doesn’t include aviation and shipping, nor the carbon emissions we effectively import through goods and services produced overseas but consumed in the UK. If we include all of these, since 1990 the UK has only managed to reduce its carbon emissions by around 15%, with much of this coming from phasing out coal power and suffering through a long recession. Half of the UK’s emissions are now imported, meaning we’re effectively outsourcing our responsibility for climate change to developing countries.
As the host government for this year’s COP, the pressure has been on the UK government to put together a substantive plan to get the nation to net zero carbon emissions by 2050. This plan is both one of the first such national plans and, at the same time, a deep disappointment. It comes late, lacks ambition and substance, and has no actual accounting that connects the various schemes to emissions reductions.
Yet even this tepid plan could be derailed, ironically, by climate change itself. And much the same goes for other national and business net zero pledges and emission targets.
Two challenges threaten to derail local and international efforts to mitigate climate change and even deepen the crisis.
The first is the impact of climate change. From the costs of disasters to the rising cost of commodities, problems of supply and scarcity are already undermining plans to reduce emissions and squeezing living standards.
Climate-related disasters cost the world US$210bn last year, much of the economic damage uninsured. In the Global North, many existing insurance plans don’t cover flooding or extreme weather events, both of which are set to become increasingly common in a warmer world. Combined with differences in coverage based on class and race, this means around 65% of economic losses from natural disasters were uninsured in 2019. The situation is much worse in the Global South, with even less insurance coverage. For example, total disaster losses last year in Asia totalled US$67bn, of which only US$3bn was insured.
We are also at the start of a ‘climate’ commodity super-cycle. A super-cycle is a prolonged period of rising commodity prices – food, oil, gas, ore and minerals. Climate change is driving up commodity prices in two ways. The first is through the everyday effects of climate change: drought, disaster and declines in crop yields. These push up food, oil and raw material prices, currently to highs not seen since the 1970s, impacting the production and supply chain processes that supply households and business (further increasing prices and costs). The second is on the availability of key ‘green’ resources. The transition to a low carbon economy is resource intensive, and there currently aren’t enough raw materials for a green transition available, creating the conditions for booming ore and mineral prices. Given the long lead-in time for developing new mines and supply chains, this means commodity prices will ride high on government and business investment for the foreseeable future.
The immediate impact of both disaster losses and rising commodity prices on business will be to drive up costs during a period of economic strain and shock, while making low carbon or green technologies unattractive due to scarcity of supply or higher costs. This will mean more resistance to retire fossil fuel infrastructure, making meeting targets harder (if not impossible) within the current pro-business and pro-growth policy frameworks. We can see this happening already, from China seeking to boost coal supplies to deal with power shortages to government subsidies for gas in France and Italy. It will also provide support for continued fossil fuel production, especially gas as a so-called ‘bridge fuel’.
The impact on consumers will be rising prices and living costs, further reducing household budgets and real wages after years of austerity. And as the price of ‘sustainable’ goods and services rises, the impacts risk making a sustainable future unaffordable for many, at a time when more people than ever will be suffering from crises and uninsured disasters.
The ultimate impact will be inflationary, driving up the cost of living and the cost of doing business, while draining government budgets, all of which will potentially slow down – or in some cases reverse – efforts to transition to a zero-carbon future.
The second challenge threatening to undermine efforts to mitigate climate change is, paradoxically, the race to turn national economies green itself.
Governments are currently announcing endless green promises and plans, each racing to attract investment and build green infrastructure to secure their nation as the green industrial nation. They do so at a time when the world already has more manufacturing capacity than it needs or could possibly turn a profit from. Efforts to secure green national industries in the Global North are already struggling when faced with lower-cost manufacturing bases in the Global South. China alone already produces over 80% of solar cells, as well as much of the world’s wind turbine and electric vehicle production.
Government subsidies and investment will no doubt attract green industry despite global manufacturing overcapacity. And wages and conditions will both likely be sacrificed to ensure cheaper labour. But in the event that governments beyond China succeed in generating green industry, we could find ourselves in a situation where there is, in fact, too much green industry.
But why? Clearly, the build-out of new industry and sustainable energy needs to happen at a wartime-like pace and effort – so how could there end up being too much capacity?
Building infrastructure, manufacturing capital goods and mining the minerals needed for renewable power systems and electric vehicles all produces carbon emissions. There are plans for carbon negative concrete, green steel and carbon neutral mining, but as yet these are all either in early stages of development or rely on green infrastructure being built first for them to be realised. Ultimately, the more green infrastructure we produce, the more emissions we emit. Even if this is a small percentage of previous carbon emissions, a small percentage of a large number is still a large number – as we know from the pandemic.
Given that the iron, steel and cement industries produce more than four billion tons of carbon dioxide from production processes every year, and that questions remain as to whether or not they can be decarbonised without non-existent ‘carbon capture’ technologies, this means that if we produce too much green industry and infrastructure, we could well miss the 1.5°C target or even blast right through it.
Add to this the emissions from electric vehicles and renewables, sufficient to replace existing power stations and the 1.4 billion cars around the world, and again this could well take us past our 1.5°C and 2°C targets.
Ultimately, there are no industries or industrial goods that don’t produce emissions. While it would make sense to limit the amount we produce of both, currently market policies dictate we grow them both as much and as fast as possible.
While carbon offsets are touted as one way around this problem, there is a limit to how much can be offset through agriculture or reforestation, especially if countries and companies, like Scotland and Shell, both try to use the same forest as part of their offsets. Oxfam have recently set out the limits (and lies) of using forests to reach net zero. Using land alone would require at least 1.6 billion hectares of new forests, land five times the size of India, and would contribute to rising food prices and land scarcity, exacerbating the danger posed by climate change to food security.
The reality is that there is only so much green industry we can afford to build if we are to stay below 2°C. A competitive build-out of ‘green industry’, one surely that favours those wealthy countries largely responsible for climate change and the existing dominant players (i.e. China), risk pushing us beyond the safe limits of carbon emissions.
The combination of the two is already threatening global efforts to arrest climate change. On the one hand, climate change and the social and material limits to transition are slowing down efforts to transition to a low carbon economy. And on the other, national decarbonisation plans risk pushing us beyond safe climatic limits. Where these two meet is in the protectionist middle, where national governments and regional blocs race to build green infrastructure and industry and secure some kind of social stability. Each shock or disruption further fuels a nationalist turn, where jobs, food, and stability are all treated as scarce resources to be hoarded or protected behind razor wire border fences, while emissions fail to fall far or fast enough, deepening the crisis at each step. Where we could end up, if we leave our fate to the mantra of economic growth and market forces, is with a kind of greenish neoliberalism-in-one-country, a punitive neoliberalism that seeks to combine public funding for private ‘sustainability’ efforts with increasingly cruel social policies.
So where does this leave us? If one thing’s for sure, it’s that the struggle to stop climate change can’t remain oppositional. Global movements are rich in alternatives and non-market solutions, and now is their time. Yes, climate change risks derailing government efforts to reduce emissions – but these failures could be our opportunity to build a real, just transition.