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Neoliberal environmentalism will not work

Image: Curtis Perry

The solution to climate change, we are told, is via our collective purchasing power.  If, for example, we buy led lights, drive electric cars or contract with energy companies that supply 100% renewable electricity, our collective market power will force corporations to shift away from activities that produce greenhouse gases.

The corollary to this is that states can “nudge” our consumption habits by taxing those things that ought to be discouraged, while offering grants and subsidies on the things that should be encouraged.  Anyone in the UK thinking about buying a new car, for example, can get a £4,500 government grant toward the purchase of a new electric car.  Similarly, home owners who install rooftop solar panels enjoy a fixed feed-in tariff on the surplus electricity they feed into the grid (irrespective of whether there is demand for it).

On the other side of the equation, governments are looking at new taxes to discourage products and activities that produce excess greenhouse gases.  For example, the UK government is mulling the imposition of an additional pollution tax on new diesel vehicles.  At the same time, the European Union is examining the possibility of a “methane tax” to be levied on the meat industry.

Missing from these initiatives and proposals is any assessment of the disproportionate impact on the growing proportion of the population that has experienced falling wages for the best part of a decade.  The majority of the UK population lack the income to purchase a new electric car; but will still pay – in the form of taxes and public service cuts – so that relatively affluent motorists can enjoy a subsidy on an electric car.  In addition, the millions of households that are currently coping with “fuel poverty” are still obliged to contribute toward green energy subsidies that are added to their energy bills so that (among other things) affluent households can have solar power.  A tax on meat – if it were to become law – would have a similar impact.  To affluent households it would be a minor inconvenience that would not deter meat consumption; but to millions at the bottom (many of whom already depend upon food banks) a meat tax is likely to force them into giving up meat altogether.

The politics of this are all too clear once you consider that the one greenhouse gas producing activity that disproportionately benefits the affluent classes – commercial air travel – always somehow  gets overlooked when taxes and subsidies are up for grabs.  Governments that have proved adept at nudging the poor into even greater poverty always seem to decide that the “free market” alone must be the sole arbiter of whether people fly or not.

The political consequences of this should not be ignored.  Last year, economist Dieter Helm, who carried out the UK government’s energy policy review gave voice to the trouble that is likely to come if we remain on our current course:

“It is not particularly difficult to set out what an efficient energy system might look like which meets the twin objectives of the climate change targets and security of supply. There would, however, remain a binding constraint: the willingness and ability to pay for it. There have to be sufficient resources available, and there has in a democracy to be a majority who are both willing to pay and willing to force the population as a whole to pay. This constraint featured prominently in the last three general elections, and it has not gone away.” (My emphasis).

In Donald Trump, Brexit and the rise of AfD, we see what happens when too many people have their faces ground into the dirt by affluent classes that have been oblivious to their plight.  In the USA and the UK, those same affluent classes are seriously entertaining dispensing with democracy (removing Trump/reversing the “binding” Brexit result) rather than address the underlying socio-economic factors that have driven people to the extremes.  They should, of course, think very hard about removing the remaining democratic (peaceful) routes to change for fear of the alternatives.

Environmentalists, too, should be wary about imposing even more costs on already overburdened and politically fractious masses while simultaneously offering handouts to the affluent classes.  In the days before the Neoliberals persuaded us that “There is no alternative” there was, in fact, a very simply alternative: fund environmental improvement out of progressive taxes on wealth and income, and use the power of the state to deter all polluting activities; including those enjoyed by the affluent.

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