We’re about to spend billions of pounds on restoring our economy out of the Covid-19 pandemic, and if we do it right, we can solve the climate crisis and live in a golden future. Imagine a world where the roar of traffic is replaced by the song of birds, where flower petals not plastic bags float in the wind, where people in cities can breathe, and the countryside comes to life once more. Our problem is simple: we still use coal, oil and gas, and it must stop. All of it. Since I began teaching enterprise law, and the finance and governance of regulated industries, I’ve learned how hard and complex the details of decarbonisation can be. But the principle is easy. Stopping climate damage is a moral imperative. We owe it to ourselves and each other to build back better, and create a golden future for our children.
With the think tank Common Wealth we’ve written a complete Green Recovery Act that gets us to zero carbon as fast as technologically possible, not to wait till 2050 or 2030. Its price tag is zero, but the whole machinery of government and all businesses will have new duties to replace vehicles, energy sources, and investments that use coal, oil and gas. The Bank of England will have a new monetary policy based on clean investment. The UK Treasury will replace “Gross Domestic Product” with an objective indicator of economic success, that doesn’t go up when companies profit from pollution or privatise health care. The Act empowers our local authorities to be the new laboratories of environmental innovation, and it requires our Foreign Minister to negotiate for the same principles abroad as at home in all international agreements. The Act will put fossil fuel companies into a swift and orderly liquidation procedure, and it will guarantee full employment, incomes and training for everyone.
This lays the foundation for a Green New Deal, but it goes far further than the plans we’ve seen from the EU, or even from the declaration of US Congressional Democrats. We do need money, but the key element that’s been missing is we need to change what got us here in the first place. In law and economics we often talk about ‘market failures’, like pollution as an ‘externality’ (when companies unjustly pass the costs of production onto others) or the status quo bias (we stick with what we know, even if it’s harming us). But these phenomena only matter because our social institutions – above all our laws – are failing.
