Twenty years on from the Rio Earth Summit
One stark contrast with Rio 20 years ago lies in the collapse in confidence in the growth of the world economy today. If there is no return to growth there is a real danger that the question of sustainable development will take second place as concerns grow over tax and price rises, and the perceived threat to jobs. In Rio+20, the UN has rightly adopted the theme of ‘the green economy’ as a response to global poverty. But this requires governments to invest in forward looking green growth strategies, in which progressive environmental taxes, particularly on carbon emissions, find their rightful place.
There can in practice be no such thing as ‘green austerity’. Poverty and a poor environment always go together.
So where do we go from here? Surely it must be in the direction of an agreement across the world for huge increases in support for green investment and associated research projects to get towards a more benign pattern of growth. Nothing will, of course, solve at one stroke the deadlock of the preparatory work for Rio+20. But significant support funds are required to promote green structural change towards a zero carbon cycle in forestry or desalination and other areas of possible low carbon development.
The EU has provided global leadership through the UN’s negotiations to agree a new climate change treaty. But the UN’s credibility as a whole will soon diminish if the USA and the emerging economies of Brazil, Russia, India, China and South Africa (the so-called BRICS) were not as committed. That is still the position. Nevertheless, China has become the largest investor in renewable energy projects (£130bn in 2010). The country still faces grave cases of pollution despite progress in cutting down on the number of new coal-burning power stations during the last five years. It is now the world’s largest CO2 emitter, yet has recently announced seven pilot emissions trading schemes for carbon in different parts of the country.
On the domestic front I think it is fair to say that the creation of the Trade Union Sustainable Development Advisory Committee (TUSDAC) can be judged a success. It is now some approaching 20 years old, having been set up very soon after Rio. The agenda has ranged widely across the green skills and jobs agenda. From early on, TUSDAC has promoted the notion of Greening the Workplace, including the development of innovative pilot projects and environmental training for union reps and their members. The TUC is now working with the ETUC to help spread the idea of green workplaces and green bargaining. Hopefully this will encourage UK unions to look to European Works Councils and other consultative bodies to carry out such functions in a more systematic way
I pointed out in the committee stage of the eventual Climate Change Act 2008 that we have to be very careful not to load all the costs of climate change policies in a regressive way onto the average worker. It is essential to ensure that carbon taxation is introduced in a way that is understood and accepted by people in industry, both as producers and consumers. The following table indicates the effect of CO2 taxes on households.
Effect of Carbon Tax on Households (Income Deciles)
|Decile||Annual Charge (£)||% of Income||% losing||% losing >£2pw|
During the debate on the CCA I moved an amendment for the creation of a new forum with representatives from government, employers, trade unions and consumer organisations to advise government on the impact of its climate change targets. There should be impact assessments on each sector – transport, manufacturing and services – of carbon taxes and other measures to meet carbon budget for that period, including suggestions to ameliorate the impacts identified. The government wasn’t willing to set up such a forum.
There are various ways to solve the regressive problem sometimes associated with environmental taxes and charges, through the way the tariffs are designed, compensation schemes, or hypothecating green taxes to support investments in domestic energy efficiency and home insulation schemes, targeted at households in fuel poverty. For whatever reason, when that dire word ‘hypothecation’ is mentioned, every politician I have ever met gives a dismissive knee jerk reaction without even attempting to address the arguments for and against. Why? It is anathema to the Treasury to allow any exceptions to the rule that all taxation at national level must go into one big pot.
But although much taxation is generally not raised for a specific purpose, a number of tax measures have been implemented primarily with environmental objectives in mind – the London congestion charge, taxes on waste going to landfill sites, taxes on industrial energy use (the Climate Change Levy) and the extraction of aggregates. So a major question is how to design proportionate compensation measures – for example, greater expenditure on local bus services, which are ‘progressive’ in their uptake but also help for other local services; neighbourhood shops and post offices.
A good analogy is the congestion charge in London which raises about £150m a year and ensures that the proceeds (from what undoubtedly are people of above average income driving cars in London) go into public transport, buses in particular. This has been one of the factors in Londoners generally accepting the congestion charge – a sustainable policy not just in terms of amelioration of congestion but also in terms of public opinion.
All of these issues came out of Rio 20 years ago: the need for government, unions, employers and community organisations to work together for a sustainable future; the risks of loading the cost of environmental policies onto the shoulders of those least able to bear them; the vital importance of investing in a green economy and green jobs, not just in the UK but global as pathways out of poverty. Governments must understand that austerity measures alone cannot be the basis of a successful Rio+20 vision this week.