The only way to hit Net Zero targets is to raise living standards first
The Conservative Party’s unexpected victory in the Uxbridge by-election last week, perceived as a referendum on Sadiq Khan’s expanded Ulez zone, highlights a political law obvious to everyone but the London Mayor: in a democratic society, no one votes to make themselves poorer.
For Rishi Sunak, the result offers a means to recover electoral ground, by campaigning against the same Net Zero policies Boris Johnson airily introduced. For Keir Starmer, publicly dressing down Khan, the result may lead to a screeching halt on the ambitious Green Growth plans his party has floated (and already watered down). But beyond British politics, Labour’s panicked response to Uxbridge highlights the central, increasingly rancorous debate within climate politics: between pursuing green growth through massive investment in decarbonisation, or strangling consumption through eco-austerity.
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For Green Growth advocates, like the ecomodernists Matt Huber and Leigh Phillips, an economy decoupled from carbon consumption will lead to an era of mass abundance. As the economist Robert Pollin calculates, committing around 1.5% of global GDP towards decarbonisation will cut emissions by 40% within 20 years “while also supporting rising living standards and expanding job opportunities”, through total replacement of the world’s infrastructure. For degrowth enthusiasts, like the economists Jason Hickel and Giorgos Kallis, pursuing green GDP growth will accelerate resource depletion as consumption grows to match the newly unlocked energy resources — even if carbon-neutral infrastructure can be rolled out before catastrophic climate change.
Yet the heated debate obscures an essential similarity between the two opposing worldviews. Both require a colossal degree of investment in new, low-carbon infrastructure: they only diverge on how the economy is to be run once decarbonisation is achieved. The ironic result is that, in its initial decades, even planned degrowth would likely lead to an unintended GDP boom comparable to the Industrial Revolution.
The scale of the necessary investment is staggering. To decarbonise the EU’s economy by 2050, McKinsey suggests, would require €28 trillion spending, or €933 billion per year: to achieve this much industrial production without causing GDP growth stretches credulity. As the Green Keynesian economist J.W. Mason observes, “if we face a political conflict involving climate and growth, it is not because decarbonisation requires accepting a lower level of growth, but because it entails faster economic growth than existing institutions can handle.”
Achieving decarbonisation through massive economic growth is a vastly more appealing electoral strategy than Khan’s eco-austerity, and a targeted approach — like the Biden administration’s direction of investment towards Republican states — would help assuage voter fears. Climate sceptics would welcome the economic boom caused by total infrastructure replacement, even if they doubted the rationale. Yet as so often in Britain, we are offered all stick and no carrot: just as Johnson committed Britain to phasing out fossil fuels without bothering to build the necessary infrastructure, Khan’s adoption of rationing and direct taxation lowers living standards without first offering an improved alternative.
Instead, Starmer should ride the tiger, committing Britain to massive state-directed investment in decarbonisation, boosting individual prosperity and — for a while — consumption before phasing out fossil fuels. Rather than taxing petrol cars, Labour should heavily subsidise British-made electric vehicles, while rolling out expanded, cheap or even free public transport to wean Britons off the roads. British voters would experience a massive housebuilding programme of new, cosy homes heated by a nuclear-powered electric grid as a gift, rather than a penalty. The only plausible way to hit Net Zero targets is to dramatically raise living standards first, providing a smooth and comfortable off-ramp to the new economy. Instead of raiding ordinary voters’ wallets, Starmer should stuff their mouths with gold.