A NEW ENVIRONMENTAL CONTRACT FOR THE 21ST CENTURY?

An IPPR event with Rt. Hon Charles Clarke MP Thursday 30th November 2006

It has now become conventional wisdom that climate change is the biggest challenge facing our planet in the medium-term. The small number of ‘climate-change deniers’ were in any case in retreat and were then routed by the comprehensive and compelling report of Sir Nicholas Stern, which was commissioned by Gordon Brown.

The common sense proposition is that we as a country cannot live beyond our means. It is true for the planet, it is true for our country and it is true for the individual. The 21st Century environmental contract which we have to conclude is between ourselves and our children, between this generation and the generations yet to come.

In short we cannot continue indefinitely to consume more resources than we produce. If we consume energy that cannot be renewed, we will, sooner or later, no longer be able to consume energy. It is as simple as that. And whether that in fact happens sooner or later depends on how quickly we stop needing to consume energy which is not renewable.

David Cameron’s efforts to seize this agenda for the Conservatives fly in the face of their history of promoting untrammelled free markets, selfish individualism, and opposition to any form of collective action or regulation in the common interest.

The fact is that social democratic values offer the best approach. It was Aneurin Bevan’s phrase that ‘Socialism is the language of priorities’ and there can be no greater priority than protecting our planet and our way of life for our children.

About 20 years ago I heard Willy Brandt express this view in a wonderful speech in Germany where he said that ‘the future is red-green’. This remains as true today as it did then. We need a green agenda which needs to be embedded in the social democratic values which assert that through our common action we can deliver a better life for the individual, and better address the problems of the future.

To its credit this Government has since 1997 made greater progress than any in history towards meeting these challenges, both by our active international stance towards agreements such as Kyoto and in our domestic policy. And it should not be forgotten that even these limited achievements have often been opposed by those Conservatives who now preach green politics.

This stance has sown the seeds of the long-term red/green approach which we need but we now have to bring this thinking into the core of all of our policies and all of our politics. For the truth is that we have not done enough in the past and we need to do more in the future. As we develop the policies for the next generation of Labour in Government we really do have to put the principles of sustainability into living practice.

In many ways Sir Nicholas Stern’s most significant and optimistic conclusion is that if we take action right now we can deal with the problem. If we take the measures which are necessary, and difficult, we can make change fast enough, and at little enough relative cost, to avoid future disaster.

My intent today is to place emphasis upon the ‘we’. Too many of the proposed solutions do not acknowledge the possibility of significant changes in behaviour by the whole country and rely too much on the top-down imposition of particular approaches or techniques. There is too much emphasis upon national strategy and not enough upon local initiative and enterprise.

Some are sceptical about this and take people like Jeremy Clarkson at face value when he says that he doesn’t ‘give a shit’ about the Stern Report.

However I believe that the overwhelming majority of people and organisations in this country want to take the steps which are necessary for them to make their own contribution to meeting the challenge of creating a sustainable society. They are even ready to pay a small financial sacrifice to do so if they are convinced that their contribution would make a real difference in reducing the threats posed by climate change.

But most people do not have the confidence that they know how to make their contribution to sustainability and they are not convinced that any action they take would make a real difference. And that is the test.

That challenge is made more difficult by the self-indulgence of some green campaigners who have done their best to turn the green of environmental sustainability into the green of grudge and jealousy. And moreover some so-called green activists simply equate green thinking with opposition to change of any kind and rejection of scientific thinking and progress.

I do not accept that the single cyclist should be judged morally superior to the 4x4 driver with his family; nor is the hiker more honourable than the world traveller. We must make it clear that green politics must be the politics of science and the future, never the politics of envy or resentment. It must become the politics of the mainstream and not the margins.

Most people want to behave in a sustainable way and the main criticism I have of the otherwise comprehensive Department of Trade and Industry Energy Review Document, ‘The Energy Challenge’, is that it is not ambitious enough for the individual household, school or company in this country. Most of the measures that it recommends are to be carried out by others, when what is needed is for all of us to take steps ourselves.

The international commitment is certainly important, as Kyoto showed, and we need to continue to develop the European Union Emissions Trading Scheme and possibly to police the system through some institutional structure such as the Environmental Security Council which was discussed at the Climate Change Nairobi Conference earlier this month.

It is important to have the debates about international agreements and enforcement procedures, and about any statutory Climate Change Bill targets, which might be useful if properly calibrated. But we need to acknowledge that these important discussions do not in reality register with most people.

I said earlier that the 21st Century environmental contract which we have to conclude is between ourselves and our children, between this generation and the generations yet to come.

The role of Government is not to make the contract in the name of all of us, but it is to do all it can to help every individual, every organisation and every community in this country to make their own contracts for the future. The task of government should be to encourage and promote such sustainable behaviour by the wide range of techniques and policies at its disposal, including legislation and regulation, taxation and subsidy, carbon pricing and high-quality research and development.

But the test for all of these techniques and policies will be whether people believe that they are working and making a difference.

Take green taxation for example. Already the nay-sayers are coming out in strength with the argument that it would be just another ‘stealth tax’ and would simply be used as another trick to swell the Treasury’s bulging coffers.

The way to deal with that is straightforward. It is to point out that it is perfectly legitimate to use taxation to influence individual behaviour, for example in the way that Nigel Lawson’s higher tax on leaded petrol was designed to increase the use of unleaded petrol.

Similarly, the current proposals for ‘green taxation’ are based upon the fundamentally correct economic principle that it is right to increase taxes upon environmental ‘bads’ and to reduce taxation on environmental ‘goods’.

And the way to explain that green taxes will be of benefit to individuals and their communities is openly and transparently to hypothecate the revenues raised by green taxation, such as congestion charges and road pricing, to environmentally beneficial purposes such as higher quality and cheaper public transport.

I believe that the public will accept green taxation on this basis, provided that they can see that the benefits are genuine and will impact upon the lives of themselves and their families.

Similar arguments can be made in relation to other policy instruments, such as regulation, restructuring the energy market and subsidies for the use of renewable energy.

I take the view that there are two key policy areas where a particular focus is needed in encouraging all of us to make our own contracts with the future, and these are the fields of transport and energy.

Some of the issues in local transport have been relatively well discussed and the range of policy options is pretty well understood. However we have simply not set about implementing them energetically enough and a far higher and more committed level of real action is required.

I believe that the best way to do this is to concentrate on just two journeys – the journey from home to school, and the journey from home to work.

Every day almost everyone in the country makes one or other of these journeys and our goal should be quite simply to reduce the number of such journeys made by car, and to increase the number who walk, cycle or use public transport. For those who have to use the car to travel to work, car-sharing schemes can make some difference.

And we should attack this problem in the confidence that it is possible to make real progress. In Amsterdam and Zurich about 75% of people walk, cycle or use public transport rather than the car compared to 35-40% in Darlington or Peterborough. The physical design of many European cities puts these travellers higher in the transport hierarchy by giving priority to them in the way in which the cities are planned.. There are overall benefits for city life too. From the era of Jane Jacobs’ wonderful book, ‘The Death and Life of Great American Cities’ many planners have recognised the ways in which mixing uses and promoting local travel can stimulate urban vitality and creativity.

It is essential to create urban environments which make walking and cycling attractive and safe, particularly for children and young people. This is far too often not the case today. It is essential to promote cheap and reliable public transport, including buses, which make public transport a realistic option. A more integrated ‘yellow bus’ school transport service would make a big difference, particularly if reinforced by changes such as staggering the times of the school day.

And, as school travel plans, the ‘Legible London’ study for the Central London Partnership and the SUSTRANS project on Individualised Travel Marketing have shown, it is essential to focus upon high quality information to the public. Many families simply do not know the full range of their transport options and do not feel able to make really informed choices. And so they get back into their car.

In this field of urban transport we already know what we should be doing, but neither central nor local government have established a consistent enough policy framework nor given it a high enough priority.

A similarly consistent policy framework is needed as we seek to shift long-distance travel from road and air to rail. The Government has the duty to use the policy instruments at its disposal to influence the competition between these modes for these journeys

The true long-term cost of using roads needs to be fairly charged to the main road users, both passengers and freight. Congestion-charging should be spread far more widely, as should road-pricing and tolls for motorways. But as I argue above the revenues from such charges should be hypothecated to improving the rail and public transport system.

And for rail, the balance of capital investment needs to be changed towards the relatively congested South-East, South-West and East of the country where a step change in rail investment is needed.

For air the measures currently being considered by the European Union are necessary and should be implemented.

But the final transformation for transport will come when the massive investment and research into replacements for the internal combustion come to fruition and remove, or at least reduce dramatically, the need to use fossil fuels.

There are of course many different technical approaches to this, such as the development of biofuel, the use of hydrogen, the development of electric transportation and even just more efficient engines. None of these, interesting though they are, has yet reached the point of significant commercial exploitation. When I visited the Motor Show this year I was struck by how little, rather than how, much, the main car companies were committed to real development in this field. These are all areas where government can and should aggressively use a combination of taxes and subsidies to reward those drivers who use the most carbon-efficient vehicles and penalise those who don’t.

In the field of energy use, we need to focus on significantly improved energy conservation and increasing dramatically the proportion of energy which comes from renewable sources.

Both of these will be achieved far better if the system of energy production in this country rewards those who conserve energy and those who generate it from renewable sources.

Again, as with transport, it is entirely possible for an individual household, school, college or university, hospital, office, or factory to want to improve their performance in this area. And it is quite possible for an individual local authority to want to turn its community into one which is at least carbon neutral, and possibly even better. Indeed this would be a return to a historic role for local government. Some years ago I remember working in the old Shoreditch Town Hall, under the old Shoreditch coat of arms with its slogan ‘More Light more Power’ when the Victorian municipality was an electricity generating body.

But at the moment the energy pricing system does not encourage in any way any form of local initiative of that type.

That is why I think that the Government’s Energy review, ‘The Energy Challenge’ is so fundamentally pessimistic about the possibilities of reducing energy consumption and promoting renewables. I believe that pessimism to be fair on the basis of current practices but misplaced if we really were to set about releasing the energies of communities and organisations up and down the country.

The truth is that those individuals and organisations which want to reduce energy consumption or generate their own renewable energy, for example by using wind or solar power for their house school or local community are by no means clear how to set about doing this and often give up at an early stage.

The Energy Review rightly proposes making more information available, but this has to go to the core of our strategy. As with transport information is crucial and, properly informed, very many people would want to a great deal more. It is entirely feasible to make a city like

Norwich carbon neutral over a ten year period, for example by a ring of wind farms around the City and other measures, if there is the will to do it and I see no reason why such an experience could not be repeated across the country.

Of course, information needs to re-inforced by that same array of government power through regulation, tax and subsidy and other techniques.

There are plenty of examples such as reduction of planning constraints for those who are investing in renewable power, support for individual householders who invest in renewable energy, the application of the so-called ‘Merton principle’ where local authorities place renewable energy generation requirements on housing developers, differential tax rates for energy, according to renewable content and so on. There is certainly a strong case for a tax upon the windfall profits of oil companies, again with the product focused upon investing in renewable sources.

Moreover, this Government has built more new schools, new hospitals and new homes than ever before. Now is the time to make it an absolute requirement that these new buildings are the most energy-efficient possible. The building regulations which do increasingly reflect environmental priorities need to be enforced and carried through far more rigorously than appears now to be the case.

All such measures will significantly encourage the very rapidly growing amount of money which will be invested in new clean energy technology developments. For example in the United States investment in clean energy technology has increased from 30 billion dollars in 2004 to 63 billion dollars this year. And there are aspects of environmental clean technology where the United States is already ahead of Europe.

But probably the single most important step is to make the National Grid more accessible and to reform the energy-pricing market in a way which rewards those who generate energy from renewable sources and sell it into the National Grid and penalises those who consume energy from the grid. A variation in the pricing arrangements, perhaps along the lines of what Germany has been introducing over a number of years, could well accelerate the pace of introduction of renewable energy production from a wide variety of different sources.

At the level of new major systems of energy production we need properly and fairly to research and consider all options on an equal footing. The possibilities of nuclear fusion and Concentrated Solar Power, along the lines recommended to the German Government in a recent Report, need to be considered alongside major proposals to use wave and hydro-power, and their costs and benefits properly assessed.

Nuclear power stations need to be assessed in the same way and of course the environmental arguments around nuclear power are by no means one-way since nuclear power can make a major contribution to the reduction of carbon emissions and it is probably better to operate new and modern nuclear power stations rather than those nearing or past the end of their expected operating life.

But the central concerns of safe nuclear waste disposal, the probability that the state would eventually have to meet the costs of disposal, the remaining worries about safety with the immense consequences of any failure and the vulnerability to terrorism all remain serious concerns which do not apply in the same way to other solutions and mean that I remain highly doubtful that this remains the best option.

Let me summarise what I am saying in the following way:

1. Green politics is a matter for collective action and cannot be left to the so-called Green lobby or to a traditionally conservative approach. It needs to take place at the level of the individual, the community and of government.

2. The role of the individual matters particularly in this area. What will change things is an increasingly large number of individuals taking similar decisions about they're day-to-day life. In the area of transport I suggest we can expedite this by focusing on just two journeys: the journey to work and the journey to school. Beyond this, Governments should be pursuing an aggressive policy of researching new technologies.

3. In the area of Energy policy the key will be improved energy conservation and dramatically increasing the proportion of energy which comes from renewable sources. The single most important way to do this is to encourage creative local initiatives by opening up access to the National Grid. Transparency, for example, the hypothecation of some taxes and good information are at the heart of a sustainable strategy.

We should place green politics at the heart of our national life and I hope that next week’s Pre-Budget Report will begin the process of doing just that.

I repeat that for this country, sustainability is the only option. This has to be at the core of Government policies for the next decade. We should seize the apparent coincidence of attitudes, including from the other main political parties, which gives Labour the political chance to seize a historical moment, harness those attitudes and lead this country decisively to an environmentally sustainable future.

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