Green New Deal

Rebuild the local economy: prioritise labour-intensive sectors, difficult to automate, impossible to relocate abroad

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Colin Hines, co-founder of LWM and convenor of the UK Green New Deal Group, comments on the Guardian’s recent editorial on productivity and robots which ‘repeated the cliché that automation does cost jobs, but more are created’.

He says that the problem with this is that the new jobs are frequently in different places from where they are lost and require very different skills, hence exacerbating the problems for the “left behind”.

Also unmentioned was that just as automation is starting to really bite, the world faces a strong possibility of another serious credit-induced economic downturn, from China to the UK and a perfect storm of domestic unemployment soaring and export markets falling, as happened after the 2008 economic slump.

The answer to these problems has to be a shift of emphasis to rebuilding the local economy by prioritising labour-intensive sectors that are difficult to automate and impossible to relocate abroad.

Two sectors are key:

  • face-to-face caring from medicine, education and elderly care
  • carbon-reducing national infrastructural renewal.

This should range from making the UK’s 30m buildings energy efficient, constructing new low-carbon dwellings and rebuilding local public transport links.

Funding could come from fairer taxes, local authority bonds in which all could invest, green ISAs and a massive new green infrastructure QE programme.

This approach should become central to all political parties, set out in their next election manifestos because “jobs in absolutely every constituency” is the crucial vote-winning mantra.

 

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Corbyn focusses on decentralisation: localising energy and transport

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corbyn-eee-manifestoJeremy Corbyn has launched an environmental manifesto that outlines plans for the UK to achieve 65% of energy from renewable sources by 2030 – without fracking.

Corbyn proposes to put cities, councils, devolved governments and communities at the heart of an efficient, decentralised energy system by promoting a shift to electric and hydrogen buses and cars; a network of low-emission zones and cycling with safe cycle lanes and hire schemes in every town and city.

The manifesto places social enterprises, including not-for-profits and co-ops at the heart of Corbyn’s plans for a “publicly run, locally accountable energy system”.

A “publicly run, locally accountable energy system”.

In a speech in Nottingham, the Labour leader said, “We want Britain to be the world’s leading producer of renewable technology. To achieve this, we will accelerate the transition to a low-carbon economy, and drive the expansion of the green industries and jobs of the future, using our National Investment Bank to invest in public and community-owned renewable energy. This will deliver clean energy and curb energy bill rises for households; an energy policy for the 60 million, not the Big 6 energy companies.”

He has promised to promote over a thousand local energy companies in the next parliament and legislate to give community energy co-operatives the right to sell energy directly to the communities they serve.

Housing

It would launch a National Home Insulation plan to insulate at least 4 million homes and phase out coal-fired power by 2025. The Labour leader estimates over 300,000 jobs would be created in the renewables sector as a result of these measures.

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Labour would reinstate the department for energy and climate change in its first month of going back into government, as part of its plan to rebuild and transform Britain, “so that no-one and no community is left behind,” he said at the event in Nottingham.

Jeremy Corbyn also encourages the British public to take action as individuals to help to meet the Paris climate agreement. He proposes to use the precautionary principle to protect the environment and people from harm – not a pay-to-pollute approach allowing the richest corporations and individuals to wreck our planet.

 

 

 

Quantitative easing to fund climate change programmes?

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Colin Hines, co-founder of Localise West Midlands and Richard Murphy, Professor of Practice in International Political Economy, City University, London, warn that the Paris Climate talks are facing an enormous funding problem to which there is only one viable solution.

In a new report published by Finance for the Future, entitled ‘Climate QE For Paree’, they suggest that the measures to be put on the table in Paris will not go far enough to halt a disastrous global temperature rises of more than 2 degrees because no one has suggested how the enormous cost of tackling this issue is to be addressed, particularly at a time of global economic slowdown.

The paper offers a solution to this problem, using a variation on the idea of People’s Quantitative Easing that has received much attention during 2015:

‘The world has or is intending to print €7 trillion of quantitative easing to keep the financial system afloat​. In that case, why not use this mechanism in the form of Climate QE to save the planet?

The European Central Bank is already e-printing €60 billion a month under its QE [programme and is committed to doing so till September 2016.

If it allocated say €10 billion a month either from this QE programme, or from an additional QE commitment, it could use it to buy climate change bonds from the European Investment Bank. The EIB could then direct these funds to climate change programmes in both Europe and developing countries.

This could have a galvanising effect on other rich countries, putting pressure on them to introduce their own Climate QE initiatives and thus further bolster global funds towards the many hundreds of billions eventually needed to keep temperature rises at 2oC.

Importantly, since Climate QE involves one arm of the EU, the ECB, creating e-money and using it to buy assets from another arm of EU, the European Investment Bank (EIB), this will not increase Europe’s repayable debt levels. This would also hold true for countries like the United States and the UK, something that is crucial to making involvement in ‘Climate QE’ post Paris politically acceptable to all rich countries.

How the European Investment Bank Could Spend Climate QE

The EIB already invests around 10% of its funds in developing countries and prioritises climate change mitigation and adaptation (e.g. renewable energy, energy efficiency, urban transport and other projects that reduce CO2 emissions).

To achieve the goals likely to be set in Paris, Climate QE funding should be used by developing countries to fund low carbon emitting industrial and agricultural infrastructure and energy efficient buildings in cities. Such projects face difficulty attracting private finance, since the returns are harder to identify and the process of capturing and sharing them are more complex than normal investment programmes.

Rich Countries would benefit too

Colin Hines said:

‘Climate QE is not just for poorer countries. The economic and employment advantages of investing in energy efficiency and renewables is not only a way to generate economic activity in every city, town, canton and hamlet across Europe, but will also ensure our continent’s significant contribution to helping solve the biggest threat facing humanity, which is climate change.’

For further details contact:

Richard Murphy, Director of Finance for the Future LLP and Professor of Practice in International Political Economy, City University, London

Tel +44 (0) 1366 383500

Mobile +44 (0) 7775 521 797

And

Colin Hines, Convenor Green New Deal Group

Tel +44 (0) 20 8892 5051

Mobile +44 (0) 7738 164 304

Globalisation – the open trading system – is fragmenting

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Philip Stephens, an associate editor, in the Financial Times: “Globalisation – the open trading system – is fragmenting; it needs an enforcer – a hegemon, a concert of powers or global governance arrangements”.

Evidence: the collapse of the Doha, the demise of global free-trade agreements, and the emergence of regional coalitions and deals. The emerging economies are building south-south relationships and the Brics nations are setting up their own financial institutions.

Colin Hines, co-founder of LWM goes further – and deeper. He advocates the rebuilding and rediversifying of economies by limiting the entry of finance, goods and people from other countries, ensuring local provision of goods, finance and services and weaning themselves off export dependence. Depending on the context, ‘local’ goods would come from the nearest source, the region, the nation state or even a regional grouping of nation states – eg oranges from EU/Spain.

Domestic businesses and funding sources would then meet the needs of the majority in society in all countries. The prospect of such increasing economic security for the majority could gain widespread political support ranging from those on the left, the centre and the greens through to small ‘c’ conservatives.

In 2008, just before the economic collapse, as GND convenor, he presented a mechanism which would have enabled the Green New Deal to prosper. ‘Green Quantitative Easing’ would have made every building in the country energy efficient, and built hundreds of thousands of new, affordable and energy-efficient homes. A massive boost would have been given to economic activity, providing jobs on a living wage in every community in the UK, whilst reducing its environmental impact.

Later this month he will be speaking in Italy at a conference of left economists to float the progressive protectionism agenda and criticise the left, centre and greens for their support of open borders, leaving the extreme right in an ever more powerful position.

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Should QE now be used for the common good – extending and adapting the work of Birmingham Energy Savers?

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Quantitative Easing currently benefits the non-bank financial sector, commercial banks and the Treasury

HansardUnder QE, Hansard evidence informs us, the Bank of England’s Asset Purchase Facility purchase of just under £375bn of government bonds from the non-bank financial sector has led to a lowering of long term interest rates. The non-bank financial sector and commercial banks now hold more liquid assets in the form of interest-bearing reserves.

The consequent reduction of borrowing costs for the government means that debt issued or re-financed since 2009 has been substantially cheaper, saving some £50bn in immediate funding costs.

But QE could be used directly for the common good: MP Caroline Lucas:

Caroline Lucas 3“There is huge, and as yet untapped, potential in renewable energy, energy and resource-use efficiency and the transformation of our transport system that would create high-quality jobs across the country and reduce the UK’s overall ecological impact.

“If we are serious about staying below 2C warming, as we have legal obligations to do, then to invest in a destructive Dash for Gas when there is a Green New Deal on the table borders on criminal negligence by my parliamentary colleagues.”

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GND logo

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This is the National Plan advocated by the Green New Deal Group: Larry Elliott of the Guardian, Tony Juniper, formerly FOE’s director, Jeremy Leggett of Solarcentury, Richard Murphy – Tax Justice Network, Ann Pettifor of NEF and Debtonation, Charles Secrett, currently working with ELF, Triodos Bank and London’s Development Agency and Wildlife Trust, MP Caroline Lucas, Andrew Simms director of NEF, and the convenor Colin Hines, LWM co-founder and Co-Director of Finance for the Future.

Birmingham Energy Savers

birmingham energy saversEarly beneficiaries of Birmingham Energy Savers’ (BES) activities gave testimony of the positive impact the innovative scheme is having on their lives at its official launch event at The Council House in February.

It was attended by local people helped out of long-term unemployment, residents that are now enjoying warmer homes plus lower energy bills joined representatives of Birmingham City Council, who originated the scheme, and its delivery partner Carillion Services.

If such schemes could be more widely implemented and adapted for use all over the country, welcome social, economic and environmental benefits would be offered to most people – but minimal ‘rich pickings’ for the few.

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STOP PRESS

In similar vein, Fran, Ben, Andrew, Mira and rest of the team at Positive Money urge:

“Get the Bank of England to create new money instead. This new money would be granted to the government, who would spend it into the real economy where it can create jobs and support businesses”.

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If the solution is not a Green New Deal then what is it?

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Colin Hines, co-founder of Localise West Midlands, sends news of a report advancing a much-needed debate about how to move the UK out of the counterproductive politics of austerity and into the age of the Green New Deal.

GND anniversary cover 13He sees this as a matter of the utmost urgency and thinks that if it isn’t introduced rapidly, we are likely to enter another economic slump, adding:

“A Green New Deal could be implemented now if the political will existed. It calls initially for a £50 billion a year investment programme to boost economic activity, in a way which provides jobs on a living wage in every community in the UK, while reducing our ecological impact”.

The latest Green New Deal Group report published on September 10th proposes funding through the following measures:

  • tackling tax evasion and avoidance;
  • a programme of Green Quantitative Easing (QE), where the Bank of England ‘creates’ tens of billions of pounds to be used in a targeted fashion to fund a Green New Deal, generating jobs and economic activity that also transform the economy for the future. This is very different from any previous round of QE;
  • controls to ensure that banks that were bailed out by the taxpayer also invest in such a programme at low, sustainable rates of interest;
  • encouragement for pension funds and other institutional investors to invest in the Green New Deal;
  • buying out the private finance initiative (PFI) debt using Green QE and redirecting some of the otherwise huge repayments into funding green infrastructure.

This real Green New Deal would create employment, generating wages, salaries, profits and tax revenues – from both the public and private sectors. Tax revenues could then be used eventually to finance the economic deficit and pay down the national debt.

More than that, insulating every home and building in the UK, transforming our transport system for a low carbon future and ensuring maximum efficiency in the use and reuse of raw materials would create jobs across the country.

Investment in renewable energy could be targeted so that it would help to rebalance the economy away from London, while also providing reliable sources of clean energy and enabling the UK to show global leadership on climate change.

Larry Elliott of the Guardian ends his article by addressing the first reaction of many:

“In one sense, the timing could hardly have been worse for the new GND report. The economy is growing again. Memories are short. But ask the following questions. Do you think a recovery that currently requires households to get deeper into debt is for real? If it isn’t, how long before the age-old problems of the UK economy reassert themselves? Are we any closer to grappling with the triple crunch than we were five years ago? If the solution is not a GND then what is it?”

GND summary

An article on the subject by the economics editor of the Guardian may be read here.

 

“Humanity is conducting a huge, uncontrolled and almost certainly irreversible climate experiment with the only home it is likely to have”: Financial Times

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We summarise the thoughts of Martin Wolf, the FT’s chief economics commentator here, because Localise West Midlands’ aims and policies are designed with his ‘politically sellable vision of a prosperous low-carbon economy’ in mind. He wrote, yesterday:

“Last week the concentration of carbon dioxide in the atmosphere was reported to have passed 400 parts per million for the first time in 4.5m years. It is also continuing to rise at a rate of about 2 parts per million every year. On the present course, it could be 800 parts per million by the end of the century. Thus, all the discussions of mitigating the risks of catastrophic climate change  have turned out to be empty words.

“Collectively, humanity has yawned and decided to let the dangers mount . . . clutching at straws “

“(H)umanity is conducting a huge, uncontrolled and almost certainly irreversible climate experiment  with the only home it is likely to have. Moreover, if one judges by the basic science and the opinions of the vast majority of qualified scientists, risk of calamitous change is large . . . ”

Meanwhile, Wolf notes, ‘deniers’ clutch at straws: “It is noted, for example, that average global temperatures have not risen recently, though they are far higher than a century ago. Yet periods of falling temperature within a rising trend have occurred before”.

Bequeathing a planet in climatic chaos is a rather bigger concern than leaving a burden of public debt

“What makes the inaction more remarkable is that we have been hearing so much hysteria about the dire consequences of piling up a big burden of public debt on our children and grandchildren. But all that is being bequeathed is financial claims of some people on other people. If the worst comes to the worst, a default will occur. Some people will be unhappy. But life will go on. Bequeathing a planet in climatic chaos is a rather bigger concern. There is nowhere else for people to go and no way to reset the planet’s climate system”

So why are we behaving like this?

  • The first reason is that, as the civilisation of ancient Rome was built on slaves, ours is built on fossil fuels.
  • A second reason is opposition to any interventions in the free market. . . to admit that a free economy generates a vast global external cost is to admit that the large-scale government regulation so often proposed by hated environmentalists is justified. For many libertarians or classical liberals, the very idea is unsupportable. It is far easier to deny the relevance of the science.
  • A third reason may be the pressure of responding to immediate crises that has consumed almost all the attention of policy makers in the high-income countries since 2007.
  • A fourth is a touching confidence that, should the worst comes to the worst, human ingenuity will find some clever ways of managing the worst results of climate change.
  • A fifth is the complexity of reaching effective and enforceable global agreements on the control of emissions among so many countries.
  • A sixth is indifference to the interests of people to be born in a relatively distant future. As the old line goes: “Why should I care about future generations? What have they ever done for me?”
  • A final (and related) reason is the need to strike a just balance between poor countries and rich ones and between those who emitted most of the greenhouse gases in the past and those who will emit in the future.

What might shift such a course?

Wolf: “My view is, increasingly, that there is no point in making moral demands. People will not do something on this scale because they care about others, even including their own more remote descendants. They mostly care rather too much about themselves for that . . .

“A necessary, albeit not sufficient condition, then, is a politically sellable vision of a prosperous low-carbon economy. That is not what people now see. Substantial resources must be invested in the technologies that would credibly deliver such a future . . .

Institutions must also be developed that can deliver it

Neither the technological nor the institutional conditions exist at present. In their absence, there is no political will to do anything real about the process driving our experiment with the climate.

Yes, there is talk and wringing of hands. But there is, predictably, no effective action. If that is to change, we must start by offering humanity a far better future. Fear of distant horror is not enough.

martin.wolf@ft.com

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Read the whole article here (free registration):  

http://www.ft.com/cms/s/0/c926f6e8-bbf9-11e2-a4b4-00144feab7de.html#ixzz2TLKEQjvu

Note also news of the sea-levels forecast submitted to the IPCC from ICE2Sea, a four-year programme of study by scientists from 24 leading EU institutions.

 

 

West Midlands MEP advocates the ‘Green Deal’ for social housing

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phillip bennion2In a newsletter this week (not yet available on his website) Local Euro MP Phil Bennion expresses the hope that the government’s ‘Green Deal’ will be more widely extended to help people in rented social housing:

“Millions of homes in the UK do not have full double-glazing. More than half do not have enough insulation or an efficient condensing boiler. Most do not even have proper thermostats. The Green Deal will make a difference . . . The next step is to help tenants in social housing cut their bills too, using a similar approach”.

green deal defra logoPhil Bennion pointed out that not only could tenants facing growing fuel poverty be made more comfortable and enabled to cut their bills, but that there would be increased employment opportunities for those carrying out energy efficiency upgrades. He continued:

“In the European Parliament’s Employment committee, I’m working on a report on the financial pressure facing tenants in social housing. The big worry is fuel poverty, with soaring energy bills squeezing budgets for food and other basic essentials.

“Rolling out the Green Deal approach to social housing would be tricky, but it would help tackle fuel poverty where the need is greatest. In the West Midlands, many housing associations are already making the most of similar schemes (Ed. see Tipton and Walsall).

“I want to see the EU keep up the pressure so governments and local authorities are given the tools to help tenants in social housing to cut their bills too. The process needs to be as practical and accessible as possible.”

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encraft logoOn the website of Encraft, the environmental engineering firm which prepared a full feasibility study for the city, working in partnership with Localise West Midlands, we read that the eventual aim of Birmingham’s Green Deal project is to retrofit over 14,000 private homes, small businesses and social housing units across Birmingham with the full range of energy efficiency and microgeneration technologies.

birmingham energy savers3An LWM consultant hopes that Birmingham Energy Savers* will indeed be given ‘the tools’ it needs to engage social housing providers with the Green Deal and to make it financially viable for them to improve their housing stock and reduce fuel poverty.

 

* website currently ‘under development’

 

 

 

 

 

 

Compass calls for a National Plan: “The moment demands nothing less”.

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Compass, an ideas and action based pressure group, is discussing alternatives to the Government’s economic ‘Plan A’, which isn’t working, with over 50,000 members and supporters around the country.

Its original Plan B, one page summary here, includes elements advocated in the last post by LWM’s co-founder Colin Hines: “infrastructure programmes, such as more housing, making every building energy tight, diverse and locally orientated transport systems etc” – see a snapshot of the first section below:

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compass plan b

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Plan B was a response to a seminar question posed by MP Jesse Norman, whose book Compassionate Conservatism has been described as “the guide book to Cameronism“: “Where is the left on the economy?” The Observer records:

“Stirred by the chiding of the Tory MP for Hereford and South Herefordshire, Neal Lawson brought together an umbrella group of non-affiliated university-based academics, economists, political thinkers and experts. After six months of work – often conducted in a cafe opposite the TUC building on London’s Great Russell Street – Plan B was formulated”.

A year later, Compass launched its new publication, Plan B+1, which cites the work of Birmingham Energy Savers and can be downloaded here . It is seeking signatures for its petition (text below) which can be seen here:

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compass petition text

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Compass calls for a National Plan

“The moment demands nothing less”.

 

 

Face-to-face caring and infrastructural renewal will provide the backbone for a labour-intensive future

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colin hines 6A Guardian article by LWM’s co-founder and convenor of the Green New Deal Group, Colin Hines, is summarised here.

The neoliberal export-led growth model, the increasingly discredited single currency and the utterly unchallenged single market are wrecking Europe which is facing a real nightmare: a shrinking full-time job market and hence lack of demand to keep the economy soldiering on.

The EU single market countries must reject the impossible dream of export-led growth and concentrate on their domestic economies. The much lauded “single market” is 20 years old and its emphasis on the free movement of goods, money and people is rarely recognised as being at the heart of the present European crisis.

It allowed German banks to lend to Greeks to import German cars they couldn’t afford, and the national debts that resulted are being dealt with by taking money from pensioners and the less well-off.

Meanwhile, the flow of migration and the inability of countries to control their borders under the single market are increasing tensions across the continent.

It is time for the rest of us to ask the fundamental question: what will all these European countries, newly invigorated with lower social conditions and declining domestic demand, be able to export, and to whom?

An alternative?

Transform the EU into a co-operative grouping of countries that provides a secure future for its people. Cross-border issues like climate change, pollution and crime require intra-European co-operation, but the flow of goods, money and people must be slowed dramatically to enable nations to take back control of their future and protect their citizens.

It’s time for Europe to reject the single market and prioritise the domestic market, ditching austerity in favour of encouraging activity within the member states to rekindle demand, generate jobs and allow an eventual level of taxation to reduce national debt.

Europe must reject the impossible dream of export-led growth and concentrate on domestic-led growth. Face-to-face caring and infrastructural renewal will provide the backbone for a labour-intensive future for most countries. The former can be paid for by the state, particularly once domestic and international tax dodging are tackled.

With some modest state pump priming, most of the funding for infrastructure programmes, such as more housing, making every building energy tight, diverse and locally orientated transport systems etc, can be provided by pension and insurance funds and from personal savings via bonds and ISAs.

The secure returns that can be earned from such investments are just what such funding sources need. The local jobs and business opportunities provided will help to rebuild the tax base and allow, at last, for a sustainable revitalisation of Europe’s economy.

 

Read the whole article here.