Social Europe

politics, economy and employment & labour

  • Projects
    • Corporate Taxation in a Globalised Era
    • US Election 2020
    • The Transformation of Work
    • The Coronavirus Crisis and the Welfare State
    • Just Transition
    • Artificial intelligence, work and society
    • What is inequality?
    • Europe 2025
    • The Crisis Of Globalisation
  • Audiovisual
    • Audio Podcast
    • Video Podcasts
    • Social Europe Talk Videos
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Shop
  • Membership
  • Ads
  • Newsletter

Avoiding a climate lockdown

by Mariana Mazzucato on 30th September 2020 @MazzucatoM

Share on TwitterShare on FacebookShare on LinkedIn

The world is approaching a tipping point on climate change, when protecting the future of civilisation will require dramatic interventions.

climate lockdown, green transformation, green economic transformation
Mariana Mazzucato

As Covid-19 spread earlier this year, governments introduced lockdowns to prevent a public-health emergency from spinning out of control. In the near future, the world may need to resort to lockdowns again—this time to tackle a climate emergency.

Shifting Arctic ice, raging wildfires in western US states and elsewhere, and methane leaks in the North Sea are all warning signs that we are approaching a tipping point on climate change, when protecting the future of civilisation will require dramatic interventions.

Under a ‘climate lockdown’, governments would limit private-vehicle use, ban consumption of red meat and impose extreme energy-saving measures, while fossil-fuel companies would have to stop drilling. To avoid such a scenario, we must overhaul our economic structures and do capitalism differently.

Interconnected crises

Many think of the climate crisis as distinct from the health and economic crises caused by the pandemic. But the three crises—and their solutions—are interconnected.

Covid-19 is itself a consequence of environmental degradation: one recent study dubbed it ‘the disease of the Anthropocene’. Moreover, climate change will exacerbate the social and economic problems highlighted by the pandemic. These include governments’ diminishing capacity to address public-health crises, the private sector’s limited ability to withstand sustained economic disruption and pervasive social inequality. 

Join our growing community newsletter!

"Social Europe publishes thought-provoking articles on the big political and economic issues of our time analysed from a European viewpoint. Indispensable reading!"

Polly Toynbee

Columnist for The Guardian

Thank you very much for your interest! Now please check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

Powered by ConvertKit

These shortcomings reflect the distorted values underlying our priorities. For example, we demand the most from ‘essential workers’ (including nurses, supermarket workers and delivery drivers) while paying them the least. Without fundamental change, climate change will worsen such problems.

The climate crisis is also a public-health crisis. Global warming will cause drinking water to degrade and enable pollution-linked respiratory diseases to thrive. According to some projections, 3.5 billion people globally will live in unbearable heat by 2070.

Green transformation

Addressing this triple crisis requires reorienting corporate governance, finance, policy and energy systems toward a green economic transformation. To achieve this, three obstacles must be removed: business that is shareholder-driven instead of stakeholder-driven, finance that is used in inadequate and inappropriate ways and government that is based on outdated economic thinking and faulty assumptions.

Corporate governance must now reflect stakeholders’ needs instead of shareholders’ whims. Building an inclusive, sustainable economy depends on productive co-operation among the public and private sectors and civil society. This means firms need to listen to trade unions and workers’ collectives, community groups, consumer advocates and others.


We need your help! Please join our mission to improve public policy debates.


As you may know, Social Europe is an independent publisher. We aren't backed by a large publishing house or big advertising partners. For the longevity of Social Europe we depend on our loyal readers - we depend on you. You can support us by becoming a Social Europe member for less than 5 Euro per month.

Thank you very much for your support!

Become a Social Europe Member

Likewise, government assistance to business must be less about subsidies, guarantees and bailouts, and more about building partnerships. This means attaching strict conditions to any corporate bailouts to ensure that taxpayer money is put to productive use and generates long-term public value, not short-term private profits.

Conditioned bailouts

In the current crisis, for example, the French government conditioned its bailouts for Renault and Air France-KLM on emission-reduction commitments. France, Belgium, Denmark and Poland denied state aid to any company domiciled in an EU-designated tax haven, and barred large recipients from paying dividends or buying back their own shares until 2021. Likewise, US corporations receiving government loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act were prohibited from using the funds for share buybacks.

These conditions are a start, but are not ambitious enough, either from a climate perspective or in economic terms. The magnitude of government assistance packages does not match firms’ requirements, and the conditions are not always legally binding: for example, the Air France emissions policy applies only to short domestic flights.

Far more is needed to achieve a green and sustainable recovery. For example, governments might use the tax code to discourage firms from using certain materials. They might also introduce job guarantees at company or national level so that human capital is not wasted or eroded. This would help the youngest and oldest workers, who have disproportionately suffered job losses owing to the pandemic, and reduce the likely economic shocks in disadvantaged regions already suffering industrial decline.

Fixing finance

Finance needs fixing, too. During the 2008 global financial crisis, governments flooded markets with liquidity. But, because they did not direct it toward good investment opportunities, much of that funding ended up back in a financial sector unfit for purpose.

The current crisis presents an opportunity to harness finance in productive ways to drive long-term growth. Patient long-term finance is key, because a 3-5-year investment cycle doesn’t match the long lifespan of a wind turbine (more than 25 years) or encourage the innovation needed in e-mobility, natural-capital development (such as rewilding programmes) and green infrastructure.

Some governments have already launched sustainable growth initiatives. New Zealand has developed a budget based on ‘wellbeing’ metrics, rather than gross domestic product, to align public spending with broader objectives, while Scotland has established the mission-oriented Scottish National Investment Bank.

Along with steering finance toward a green transition, we need to hold the financial sector accountable for its often-destructive environmental impact. The Dutch central bank estimates that Dutch financial institutions’ biodiversity footprint represents a loss of over 58,000 square kilometres of pristine nature—an area 1.4 times larger than the Netherlands.

Entrepreneurial state

Because markets will not lead a green revolution on their own, government policy must steer them in that direction. This will require an entrepreneurial state that innovates, takes risks and invests alongside the private sector. Policy-makers should therefore redesign procurement contracts to move away from low-cost investments by incumbent suppliers, and create mechanisms that ‘crowd in’ innovation from multiple actors to achieve public green goals. 

Governments should also take a portfolio approach to innovation and investment. In the United Kingdom and the United States, wider industrial policy continues to support the information-technology revolution. Similarly, the EU’s recently launched European Green Deal, industrial strategy and Just Transition mechanism are acting as the motor and compass for the €750 billion Next Generation EU recovery fund.

The window for launching a climate revolution—and achieving an inclusive recovery from Covid-19 in the process—is rapidly closing. We need to move quickly if we want to transform the future of work, transport and energy use, and make the concept of a ‘green good life‘ a reality for generations to come. One way or the other, radical change is inevitable; our task is to ensure that we achieve the change we want—while we still have the choice.

Republication forbidden: copyright Project Syndicate 2020, ‘Avoiding a climate lockdown’

Share on TwitterShare on FacebookShare on LinkedIn
Home ・ Avoiding a climate lockdown

Filed Under: Economy

About Mariana Mazzucato

Mariana Mazzucato is professor of the economics of innovation and public value and director of the University College London Institute for Innovation and Public Purpose. She is the author of The Value of Everything: Making and Taking in the Global Economy (Penguin Random House).

Partner Ads

Most Popular Posts

Thomas Piketty,capital Capital and ideology: interview with Thomas Piketty Thomas Piketty
sovereignty Brexit and the misunderstanding of sovereignty Peter Verovšek
China,cold war The first global event in the history of humankind Branko Milanovic
centre-left, Democratic Party The Biden victory and the future of the centre-left EJ Dionne Jr
Covid 19 vaccine Designing vaccines for people, not profits Mariana Mazzucato, Henry Lishi Li and Els Torreele

Most Recent Posts

European Pillar of Social Rights,social pillar EU credibility as a people’s union rests on the social pillar Liina Carr
vaccine nationalism,Big Pharma Vaccine nationalism won’t defeat the pandemic Sharan Burrow
Can we change the climate on climate change? Karin Pettersson
adaptation strategy Managing the unavoidable impact of climate change Ludovic Voet
platform,crowdworker Germany adds to recognition of platform workers Roman Kormann

Other Social Europe Publications

US election 2020
Corporate taxation in a globalised era
The transformation of work
The coronavirus crisis and the welfare state
Whither Social Rights in (Post-)Brexit Europe?

Foundation for European Progressive Studies Advertisement

FEPS Progressive Yearbook

Twenty-twenty has been an extraordinary year. The Covid-19 pandemic and the multidimensional crisis that it triggered have boosted existing trends and put forward new challenges. But they have also created unexpected opportunities to set a new course of action for the European Union and—hopefully—make a remarkable leap forward in European integration.

The second edition of the Progressive Yearbook, the yearly publication of the Foundation for European Progressive studies, revolves around the exceptional events of 2020 and looks at the social, economic and political impact they will have in 2021. It is a unique publication, which aims to be an instrument for the progressive family to reflect on the recent past and look ahead to our next future.


CLICK HERE

Social Europe Publishing book

With a pandemic raging, for those countries most affected by Brexit the end of the transition could not come at a worse time. Yet, might the UK's withdrawal be a blessing in disguise? With its biggest veto player gone, might the European Pillar of Social Rights take centre stage? This book brings together leading experts in European politics and policy to examine social citizenship rights across the European continent in the wake of Brexit. Will member states see an enhanced social Europe or a race to the bottom?

'This book correctly emphasises the need to place the future of social rights in Europe front and centre in the post-Brexit debate, to move on from the economistic bias that has obscured our vision of a progressive social Europe.' Michael D Higgins, president of Ireland


MORE INFO

Hans Böckler Stiftung Advertisement

Renewing labour relations in the German meat industry: an end to 'organised irresponsibility'?

Over the course of 2020, repeated outbreaks of Covid-19 in a number of large German meat-processing plants led to renewed public concern about the longstanding labour abuses in this industry. New legislation providing for enhanced inspection on health and safety, together with a ban on contract work and limitations on the use of temporary agency employees, holds out the prospect of a profound change in employment practices and labour relations in the meat industry. Changes in the law are not sufficient, on their own, to ensure decent working conditions, however. There is also a need to re-establish the previously high level of collective-bargaining coverage in the industry, underpinned by an industry-wide collective agreement extended by law to cover the entire sector.


FREE DOWNLOAD

ETUI advertisement

ETUI/ETUC (online) conference Towards a new socio-ecological contract 3-5 February 2021

The need to effectively tackle global warming puts under pressure the existing industrial relations models in Europe. A viable world of labour requires a new sustainability paradigm: economic, social and environmental.

The required paradigm shift implies large-scale economic and societal change and serious deliberation. All workers need to be actively involved and nobody should be left behind. Massive societal coalitions will have to be built for a shared vision to emerge and for a just transition, with fairly distributed costs, to be supported. But this is also an opportunity to redefine our societal goals and how they relate to the current focus on (green) growth.


REPLAY ALL SESSIONS

To access the videos, click on the chosen day then click on the ‘video’ button of your chosen session (plenary or panel). It will bring you immediately to the corresponding video. To access the available presentations, click on the chosen day then click on the ‘information’ button. Check the links to the available presentations.

Eurofound advertisement

Industrial relations: developments 2015-2019

Eurofound has monitored and analysed developments in industrial relations systems at EU level and in EU member states for over 40 years. This new flagship report provides an overview of developments in industrial relations and social dialogue in the years immediately prior to the Covid-19 outbreak. Findings are placed in the context of the key developments in EU policy affecting employment, working conditions and social policy, and linked to the work done by social partners—as well as public authorities—at European and national levels.


CLICK FOR MORE INFO

About Social Europe

Our Mission

Article Submission

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Find Social Europe Content

Search Social Europe

Project Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

.EU Web Awards