A new report released by the World Bank has said something that many of us have been arguing for a long time – that dealing seriously with climate change will not damage the economy, as many sceptics claim, but will instead actually boost it. The Bank found that climate change mitigation and adaptation measures could contribute trillions of dollars to the world economy through new jobs, better productivity for farmers, and fewer public health problems.
Jobs could include research and development of new technologies, installing renewable energy projects or retrofitting houses to be more efficient, and a wide range of public transit jobs as car use is discouraged. Crops will be likely to grow more productively as soil quality improves and water is conserved. And public health will be benefited by cleaner water, more nutritious food, and fewer deaths from climate extremes such as heatstroke or freezing.
Of course, money will be needed for this, and a coordinated effort by governments and the public sector, and this is something that the report does not address. Due to the World Bank’s extreme capitalist ideology, they assume that all of the necessary measures can be taken by private companies through a mix of tax incentives (i.e. allowing ‘green’ companies to pay less tax) and new regulations (i.e. controlling what companies can legally do in order to force them to become ‘green’).
This would be very nice, and private companies should absolutely be encouraged to contribute to climate change mitigation and adaptation. But the idea that, in our current capitalist system, companies will take the strong steps that we need purely out of their own self-interest is misguided. The public sector will have to play a large role in bringing forward a ‘Green New Deal’. This means the government will have to be involved in large public infrastructure projects, job creation, designing and implementing new transit systems, and so on. And this means that money must be raised for such projects.
The World Bank report avoids mentioning this, but such revenues could easily be brought in by a tax on carbon. We have discussed this previously in this blog, arguing that rather than the current weak, market-led system for carbon pricing, governments need to simply begin taxing carbon emissions – this will bring in large amounts of revenue in the beginning, as well as quickly forcing companies to find efficiencies and alternatives to their current carbon emissions, essentially achieving two goals with one policy.
States can use the money from the carbon tax to implement Green New Deal policies like the ones suggested by the World Bank, thus further growing the economy and bringing in even more revenue, which in turn can be used to further improve other social systems, such as health, education, social security, and more.
If we are going to truly go green and make our economy sustainable and healthy, we need to approach things in a non-dogmatic way and accept that everyone must play a part – public sector, private sector, and individual citizens. All of us must work together, and we must use all the tools at our disposal if we are going to advance. The World Bank report is a start, although it ignores the important role of government spending – an ideological position that we need to get over if we are going to make real progress.