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Zero Carbon, Closed Loop and Conservationist

Guest writer Charles Secrett, Co-founder Robertsbridge reflects on the epic challenges and opportunities facing an economy in desperate need of a comprehensive green revamp.

When David Attenborough, conservationist extraordinaire, and Mark Carney, Governor of the Bank of England, speak with one voice, warning of an imminent, existential threat to civilisation – climate chaos – and plead for humanity to fundamentally change course, it’s time to change.

Human civilisation is hurtling toward self-destruction. Reading that sentence again has the unreality of an out-of-body experience. But it is no dream. It is what the laws of climate science project. We know what needs to be done. To avoid disaster, we need to do everything.  We need to do it now.

The decisions taken at the 24th climate conference of the parties (COP 24) in December come nowhere close. Science states that within 12 short years the terrible, predictable social and ecological traumas of climate catastrophe will become unstoppable without unprecedented emission reductions. Even so, the fossil lobby, represented by the US, Russia, Saudi Arabia, and Australia, blocked actions to meet the IPCC’s imperative of limiting average atmospheric temperature increases to 1.5C above pre-industrial levels.

How then does UK society persuade its 60 million members to embed the solutions, and live life differently? To go very low carbon, very resource-efficient. To eat much less meat and dairy. To avoid flying. To cut conspicuous consumption. To renovate homes, offices, cars with new types of power.

How does government manage the transition out of a fossil-fueled, wasteful way of life and keep millions of companies, small and large, in business, tens of millions of workers in jobs, and enable low income families to meet their needs well?

The basic policy answers are targeted taxes, spending on ‘public goods’ infrastructure, products and services, regulation, education on complex systems behaviour and leading by example. And by delivering real economic and social benefits from those changes, now.

The UK, as other countries, must chop emissions, strengthen carbon sinks, maximise resource use, and roll out technologies to suck greenhouses gases from the air. It must be done in a socially and ecologically responsible manner in the buildings, energy, finance, land-use, manufacturing, and transport sectors. Public and private sector money must pour into strategically enforced priorities, or we will not meet science-determined safety.

The problem is not a lack of solutions, but achieving the overhaul of our destructive political economy in time and without resorting to a draconian authoritarianism that makes a hollow mockery of democracy.

Lifestyle preferences, and embedded capitalism, die hard. Particularly in this era of me-meme entitlement. Why should I change?! What about my business today?! To avoid a tragedy of the commons, we should ground the restructuring of our political economy in a life enhancing and regenerative world view, where people, nature and clean, efficient productivity matter most. And throw out the failed assumptions and irrelevant past performance of our failed development models. It’s an awesome, almost Biblical, prospect.

There are two tightly coupled imperatives: financing and regulating a zero carbon economy and a closed loop economy. Dirty wasteful energy and resource use feed off each other – and burn money. As do clean, efficient energy and resource use – sound investments which produce multiple benefits now and over time.

The circular economy is simple: it’s a regenerative production and consumption system, in which resource inputs and waste, emissions, and energy leakage are minimized by slowing and closing energy and material loops. Instead of taking, wasting and polluting, we redesign, reduce, recover, recycle, repair and reuse (the 6 Rs). Polluter pays taxation, using the money as reinforcing investments, grants and tax cuts, should drive smart decarbonised, decentralized, and distributed zero carbon-waste networks. Unless government ‘pushes and pulls’ every one of us with penalties and rewards, we won’t make it.

Paradigm-shifting AI, robotics, global internet connectivity, coding, and software are already forcing shock-wave disruptions through every sector, from banking to manufacturing to transportation. Old ways are disappearing fast. That is opportunity.

But workers, from executives to middle managers to assembly line men and women, are losing their jobs in troubling numbers. As the insecure, low pay gig economy grows, and traditional tax revenues fall, rebooting the economy means using new laws and fiscal priorities to drive zero carbon, closed loop productivity and growth – while stimulating a revitalised jobs market and social justice to match, where poorer citizens are enabled to prosper.

For people generally, and economic modellers specifically, past experience is their sure guide to the future. But stable, manageable, incremental climate change is not our future. Climate chaos will be abrupt, system upending, violent and soon. It’s the way complex systems work.

We need to be on a war footing. But this time there is no mustachioed hate figure lining up his panzer armies across the Channel. We face an invidious foe – ourselves – whose most vicious hurts (accelerated climate breakdown, nature’s collapse, economic calamity, food riots, massive migrations, resource scarcity, global wars) are still on their way. We have 12 years to avoid the worst.

So, where are the leaders inspiring a united coming together?

The Politics

To get the economy right, we have to get the politics right.

As we painfully know, Brexit has been stamped, not by facts, reason and solidarity, but criminality (by Leavers), dark money, doctrinaire ideology, electoral fraud, foreign disruption, internet-fuelled outrage, media propaganda, toxic insults, and a fizzing cocktail of austerity-driven despair, brazen lies and craven subterfuge.

If the nation’s most important political ‘debate’ over its economic and social future since 1939 can ignite bitter civil war between and within parties, regions, and generations, albeit led by two of the worst Prime Ministers in history, what chance a common good settlement to extinguish this far more explosive though still looming crisis?

Climate deniers like Presidents Trump in the US and Bolsonaro in Brazil, and many of the hard core Brexiteer MPs at home, pose formidable obstacles to the necessary restructuring. Only informed, compassionate electorates can overcome delusional political resistance to evidence, reason, and public wellbeing.

We must resurrect a cooperative international order, such as the EU imperfectly represents, to work in unison to multiply the increasingly effective responses emerging in every sector on every continent, like thousands of sparkling lights in a darkening world.

Hope saves, not kills. Citizens, and representative organisations like unions, churches and associations, have to be convinced that the transformation can be done – and simultaneously satisfy social, economic and ecological imperatives, now and over the future. We need political leaders in all parties to make the case convincingly – which very, very few are doing.

The government calculates that there are already 400,000 jobs in the low carbon economy, which can quadruple to around two million, generating up to £170bn of annual exports, by 2030. The TUC believe that there are some one million new manufacturing jobs from growing the high-tech, decarbonised economy.

That makes recent decisions to slash solar subsidies, block onshore wind (the cheapest form of renewable energy), prevent a closed loop 6 R sector emerging (as our northern European neighbours manage), support fracking, privatise the Green Investment Bank, and axe its own flagship energy efficiency programme and Zero Carbon Homes scheme not just economically incompetent but bordering on criminally negligent.

Business lobbies should be loudly resisting such stupidity, and getting their own act together. For most sectors that will require a massive reordering of their business-as-usual (BAU), regressive trade associations.  Almost two thirds of British companies have yet to set emission reduction targets, according to YouGov.

Net zero carbon is a long way off.  Figures from the Department for Business, Energy, and Industrial Strategy show that 80.1 per cent of the energy for heating, transport, and other sectors comes from fossil fuels, 8.52 per cent comes from bioenergy and waste, 7.8 per cent comes from nuclear, and just 3.1 per cent from wind, solar, and hydro. Currently, the Climate Change Committee (CCC) mandates that the 3rd carbon budget of 2,544 MtCO2 equivalent must be cut to 1,950MtCO2e by 2027 under the fourth carbon budget and to 1,725 MtCO2e by 2032 under the fifth – i.e. a reduction of 57 per cent on 1990 emission levels.

But even that will not deliver 1.5C. The CCC’s reduction targets need to be upped significantly.  That will be hugely controversial and politically destabilising, if not handled judiciously.  It is good that the Energy Minister has asked the CCC to review its current 80 per cent by 2050 target to assess how a net zero target could be met.

Local and national government procurement can accelerate the new economy by buying resource efficient, carbon-neutral goods and services: appliances, building renovations, energy, foods, materials, machinery, and vehicles. Leadership sets an example, and helps grow sustainable companies. Subsidies and tax breaks to high carbon and wasteful agriculture, energy and manufacturing must be phased out and redirected. Workers retrained and motivated.

The planet is already 1.1C above pre-industrial temperatures. To help stay within a 1.5C rise in average atmospheric temperatures, the UK must rush-cut its carbon and other greenhouse gases by 50 per cent on current levels within 10 years, and another 50 per cent in the decade following, to reach a zero carbon economy by 2045 or so.

Possible?  Yes.  Practical?  Yes.  Probable?  The next five years will tell.

The End of the Month V. The End of the Planet

In a market economy, it is price that matters above everything else. The single most effective driver toward a zero carbon, closed loop nation is to make carbon heavy, resource hungry services, products, and behaviours increasingly expensive; and very light carbon, resource efficient alternatives cheap, easy and mainstream. That is obvious. The argument is about who, what, where, how and when.

The most cost effective way is to introduce an economy-wide carbon and resource tax escalator, and redirect these revenues as supportive tax cuts, grants, investments and rebates. No other policy change matters as much. Given the propaganda potential of talking about tax increases, even when off-set by comparable spending, it’s both politic and more accurate to talk about carbon and resource budgeting.

The UK’s limited carbon tax incentivised electricity generators to phase out coal, carbon-rated VED helped encourage EVs, and the Landfill Levy reduced waste for burial. But they are not high enough nor extend sufficiently to decarbonise the entire economy nor create resource efficient sectors. They will not ramp up commercial and household investment in on-site renewables, energy efficiency, clean cars and lorries, waste minimisation and other technologies, like energy storage for buildings and estates, as prioritised in the government’s Clean Growth Strategy.

Additionally, they don’t cover financial markets as they must. For example, UK (and US) insurers have been the slowest to disbar coal operators worldwide. Lloyd’s of London does little to push its 50 members, running nearly 100 syndicates, to stop insuring coal plants or dump coal investments – despite suffering escalating losses from climate-induced extreme weather events like droughts, sea-level surges, storms and wildfires. Stupidly short-sighted, or what?

Market advocates argue that an emissions cap-and-trading (C+T) mechanism, driven by private sector competition, is preferable to a carbon tax. But C+T is: difficult to adjust or target effectively; depends on politically sensitive quota allocations susceptible to special interest lobbying; doesn’t incentivise personal behaviour change; and, doesn’t deliver the goods fast or well enough (viz. the EU experiment). Most critically, C+T covers too little of the total economy, nor incentivises economy-wide breakthrough innovations. But a focused cap-and-trade system can work for heavy industry where renewable electricity supply is not yet an option and until alternatives are found.

An inclusive, escalating Carbon-Resource Tax (C-RT) is flexible, and will spur companies, organisations and citizens to reduce all their carbon pollution and material waste. It effectively implements the polluter pays principle. It creates a level playing for all businesses in every sector. Most importantly, a differential C-RT makes essential zero carbon/waste technologies, now floundering at the pilot stage, commercially attractive for innovators and investors.

These include batteries and biofuels for aircraft; bio-energy/carbon capture and storage; geothermal energy; hydrogen fuels; negative emission carbon and GHG scrubber technologies; pumped storage; and, wave and other marine power supplies. Investment here both cleans up and modernises the economy, develops much needed goods for export, and creates large numbers of manual and skilled jobs.

A strategically mandated rollout of increasing C-RT rates, linked to science-revised, diminishing CCC quotas, will give business and consumers policy certainty, incentive and time to adapt. Similar models – through a new Resources Management Committee with equivalent powers – must be developed for resource efficiency gains and completing the circular eonomy. The government’s new Resource and Waste Management Strategy is a step forward. But its incrementalist deposit schemes and loading of packaging disposal costs on producers are insufficient to close the loops. That requires a CCC equivalent approach, with legally binding targets, taxes and re-spends to match.

Effectively incentivised and rewarded, human ingenuity and private motivation will keep forging new and better products, goods and services. C-RT polluter pays budgeting can drive the types of innovation needed to stabilise the climate and rebuild disrupted sectors.

Most critically, the revenues raised can be hypothecated so that the overall tax burden need not grow, living costs are cut for low income families and positive economic and social change pulled through. For example, Sweden has pulled VAT from repairs to a wide range of goods to boost its recycling-reuse market: a carbon cutting and jobs stimulus in one. Redirecting carbon and resource revenues to provide, for example, universally accessible public goods like decent, low fare public transport, household energy efficiency, subsidised pilot EV car pools in the poorest areas and free bus travel for low income workers, for example, will cut monthly bills for those most in need.

Without targeted hypothecation, blunt hikes, such as President Macron’s abandoned fuel taxes, will most likely spark furious ‘yellow vest’ style revolts against deeper social iniquities over here. We suffer from just such entrenched wealth, income and asset divisions between age groups, classes, races, and regions as France. The Joseph Roundtree Foundation calculates that four million UK workers live in poverty, unable to pay for decent food, clothing, and accommodation – and numbers are rising faster than employment rates. In our Facebook and WhatsApp fueled world, concerted rebellion swiftly spreads.

Macron’s was a stupid, elitist tax. It hit struggling low income and gig economy workers the hardest, alongside rural dwellers lacking decent urban public transport. Less than a quarter of the $40bn the move was projected to raise was earmarked to subsidise low pollution alternatives or help the less well off.

When Ken Livingstone introduced London’s expensive congestion charge, initial union and voter opposition turned into widespread support when all the revenues were funneled to improve public transport, cycling, and walking alternatives, and keep fares lower – investments that benefitted all Londoners, including drivers. There were no riots.

As the C-RT, and revised emission and resource budgets, are worked out, an immediate imperative is to lift the nine year freeze on the UK’s fuel duty escalator. But to avoid a poll tax revolt, the additional billions raised must be spent on helping people and business adapt.

This can be done, for example, by improving necessities like potholed roads, failing train and bus networks (nationalised, all the money would go to new services, clean vehicles and lower fares, not executive handouts or shareholder dividends), and walking and cycling facilities across the country – especially in the North, the Midlands and rural areas. And by resurrecting the old boiler and diesel car scrappage schemes, and extending electric (and soon hydrogen) vehicle grants.

That’s a start. Other essentials include: retraining and reskilling workers in carbon and resource intensive industries for redeployment in the alternatives; funding a national energy efficiency programme (buildings emit 40 per cent of UK carbon from mostly gas and electricity fired heating and cooling); and, supporting a similar national network of closed loop local economies. These renovation investments will lower household and business energy and waste bills, and create tens of thousands of new manufacturing, installation, repair and retail jobs in constituencies countrywide, as a series of reports from the UK Green New Deal group show.

This is growth that sustains. It is possible to square the circle of looking after the planet and people, and satisfy essential needs in the present and for the future.

Energy

Big data analytics will significantly improve the efficiencies of these programmes, and usefully direct public and private sector spending. ITC enabled smart system management, through the Internet of Things, linking users, providers and managers across the public, private and household sectors is a must for securing the huge productivity and carbon gains inherent in efficient demand management, the poor sister of the green energy and resource world.

The Energy Saving Trust has developed practical applications. Its Home Analytics service predicts property and energy efficiency characteristics for local authorities and the private sector for all 27 million households in Great Britain. Others include the Water Energy Check (measuring each room’s water use), Wind Speed Predictor (outlining which turbine type most suits a building) and Renewable Selector (highlighting best fit renewables).

Climate change is driving innovation here. A Wandsworth-based start-up, ‘Q-bot’ has developed a robotic device capable of scanning buildings and mapping out energy inefficiency hotspots. The device uses laser technology to create 3D maps, identifying where insulation should be installed and which kind of material should be used. Camden Council used the robot to retrofit social housing.  And the O-Wind turbine, invented by two MSc students at Lancaster University, overcomes the variable gusting problem of urban wind, making building-scale wind supply in cities practical.

With the right fiscal, regulatory, and planning support, smart connected battery storage, micro-renewables, combined-heat-power, district heating and cooling, heat pumps and compostable waste energy can form resilient, carbon-cost efficient local networks. They are much less susceptible to the disruption severe climate impacts cause to centralised national power grids; and, significantly reduce the energy lost in generation and transmission from large power plants.

Carbon-Resource Tax revenues can stimulate these markets, and the companies and jobs that follow. For example, by allowing local authorities to offer domestic and business rate discounts to property owners who, alongside energy efficiency, improve their properties like this.  While council tax rebates should be available to all who do so, targeted grants and social housing renovations can cut the monthly bills of poorer households. Millions of buildings have the potential to become mini-green electricity generators for home and office needs; and, also be able to charge owner and employee electrical vehicles on site, saving cash (and carbon) and relieving pressure on the national grid, especially as the national vehicle fleet goes electric.

Every local area is different. There is no one-size-fits-all energy network. Command and control from Westminster won’t work. Local authorities must be given the power to design their own mix of supply, storage and demand management to suit their unique estates of homes, offices, buildings, transport and renewable capacity.

This should run in conjunction with a similarly unified, whole system and locally determined framework covering the waste and resource economy. There are currently over 300 different recycling schemes operated by local authorities. Crazy, eh?

Transitioning out of gas is essential, and carbon capture and storage (CCS) is fundamental to that. In the medium-term, gas can kick-start a secondary hydrogen power sector for heavy industry, buildings and large vehicles, as the CCC notes, protecting jobs, income and VAT revenues. Either way, government must rapidly scale up CCS development and roll-out to meet emission targets.

A closed loop, biomass fueled sector is another practical though embryonic alternative. Drax plc’s innovative bioenergy-CCS (BE-CCS) pilot project is one of a limited number of viable negative emission technologies in development. The Energy Technology Institute estimates that BE-CCS can deliver up to 55 million tonnes of net negative emissions in the UK alone – or half our current 2050 target. Tax breaks for fossil plant operators to deploy the same can build a UK export industry the world needs as much as we do.

Government should incentivise North Sea oil producers to make good use of their empty reservoir fields as secure sinks for extracted carbon, and build up this urgently required transport, pipe and storage network. A carbon tax escalator will help make this transition out of oil profitable. That will drive further innovation and secure other valuable carbon neutral jobs.

Why is the government wasting tens of billions of pounds, and precious years, on new nuclear plants, when the private sector won’t touch them with a bad penny? Toshiba couldn’t fund its Cumbrian Moorside plant, nor Hitachi its £16 billion Wylfa plant in Anglesey.  Only Hinkley Point C, with its outdated technology, French state owned and massively subsidised by the UK, is lumbering slowly on.

Better to redeploy nuclear expertise and skilled workers for safe nuclear waste storage and decommissioning – another growth market globally – as Sellafield is doing, instead of using urgently needed public money on foreign owned plants exposed to impending sea-level rise.

Best to pull out, like the private sector, and use some of the money to accelerate R&D in nuclear fusion.  Stable base-load zero carbon power can be provided by accelerating geothermal (such as at Redruth’s new £18m deep bore facility), water-pumped storage, wave and sensitively sited tidal schemes, which an escalating carbon tax will make viable. In the short-term, completing the ‘Viking’ undersea, high-voltage interconnector cable between England and Denmark, and its equivalent between Scotland and Norway, will bring offshore wind and hydroelectric power to Britain as clean, back-up electricity supplies.

Land-Use

Seventy per cent of the carbon stored in soils since the Industrial Revolution has ended up in the air thanks to intensive farming. We need to eat less meat and dairy, cut food waste, increase the amount of food grown per hectare and hugely expand forest and soil carbon sinks to help meet 1.5C.

Farming is responsible for nine per cent of UK greenhouse gas (carbon, methane and nitrous oxide) emissions: from livestock, chemical fertilisers, energy use, soil disturbance and waste. A typical 100 ha. cereal farm emits as many greenhouse gases as 50 homes. Apart from using green fuels and on site renewables, farmers can sequester carbon with minimum and no tillage planting.  The Royal Society estimates that farmed soils can absorb another 10 million tonnes of CO2 p.a. by applying biochar on fields.

Sixty per cent of UK grasslands and 20 per cent of cropland is used for meat and dairy. A typical cow burps and farts between 160-320 litres of methane daily.  Methane is some 28 times more powerful a greenhouse gas than carbon.  Its good news that a third of Britons have stopped or reduced eating meat.

But many vegan and vegetarian alternatives similarly depend on the same industrial soya, maize and grains fed to animals.  All require high inputs of herbicides, fertiliser, fungicides, pesticides and release carbon. Ecologically and socially sustainable forms of cattle, as well as crop, farming are part of the solution, and will be demanded by meat eaters. Messianic veganism simply creates more warring tribes and less progress on common good breakthroughs.

Valuable and beautiful habitats, like grazing marshes and flower meadows, with wonderful, resident wild insects, birds and mammals, depend on animal grazing, as does a bountiful, caring way of life for farming communities. This wild nature won’t survive a carpet of carrots or cabbages. We should eat quality meat from the highest welfare, family-run farms as occasional not staple foods. And continue developing less gaseous animal diets at the same time.

The safest way to lock-in carbon, alongside restoring peatlands, is by planting trees. The regeneration benefits are multiple: for the rural economy and jobs, as closed loop biomass energy supplies, as offcuts and timber for paper (substitute plastic) and woodworking companies, and through increased flood protection and soil stabilisation.

The UK is only 20 per cent self-sufficient in timber, importing millions of tonnes from the US, Canada, and Europe by carbon heavy shipping. We need to grow domestic pulp and paper supplies to help the switch away from plastic. The CCC wants 1.5 million hectares of new forest (about eight times the size of Greater London) and 1.2 million hectares of biofuel crops by 2050, covering 17 per cent of cropland and 30 per cent of grassy uplands, alongside peatland and wetlands restoration. The Royal Society and Royal Academy of Engineering calculate that 1.2 million hectares of UK forest can extract 15 million tonnes of carbon annually from the air, with a further five million tonnes annually from restoring peat and wetlands.

Environment Secretary Michael Gove’s intention to shift farming subsidies from “land ownership” to “public goods” provision can fund ambitious forestry regeneration for production and protection purposes alongside high quality, nature beneficial food supplies, and assist working families over agribusiness’s output-only-subsidy-suckers. That’s another triple win sustainability gain.

Transport

This sector is one of the most disrupted by new technology, which has been heavily pushed by government.  But EVs and driverless vehicles will not only reduce emissions. They will upend transport tax revenues, and hundreds of thousands of blue-collar jobs in buses, haulage, taxis, and logistics. Here, as in other sectors, trade-offs between environmental, economic and social imperatives must be minimised and solutions found that simultaneously bring gains in all three areas. Fiscal policy is the key.

Given the incentives to decarbonise motoring, including carbon variable VED, the Road to Zero strategy, and the Automated and Electric Vehicles Act, the government needs to radically rethink transport taxes and spend. One priority will be to shift taxation from jobs to technology that displaces workers. Restarting the fuel duty escalator is a must.

To meet 1.5C, the UK needs to phase out fossil fuel vehicles by 2030.  As electric and low emission vehicles come to dominate, fuel duty revenues will fall significantly. But vehicle drivers and owners must continue to pay for their road use, particulate and other health harming emissions and congestion costs. For example, HGVs benefit from a £6bn annual subsidy, because fuel duty, HGV Levy, and VED taxes do not fully cover their environmental and social impact costs on society: air pollution, CO2 emissions, collisions, congestion charges, and road infrastructure damage. Social cost VED should be readjusted to cover vehicle ownership and use, whatever the propulsion system, and secure vehicle tax revenues for common good investments.

Polluter pays and vehicle use transport taxes should not only propel the uptake of clean vehicles and essential infrastructure. Rural drivers and those on low incomes will need help to cut transport costs, via tax breaks, rebates for exchanging dirty vehicles for clean alternatives and significantly improved public transport services.

Finance

Money shouts, then drives. Headed too fast and in the wrong direction a crash is inevitable. If we don’t get the money right, everything goes wrong.

Insurers, investors and pension funds managing $32tr in assets warned the COP24 Summit that society faces a prolonged financial meltdown many times worse than 2008 if climate chaos hits.  Economic losses estimated at $23tr every year will result from governments’ zombie-like failure to curb emissions and phase out coal and other fossil fuels.

According the reporting body CDP, the global oil and gas sector have reinvested just 1.3 per cent of their combined capital expenditure in low carbon projects. The IMF calculates that global subsidies for coal, gas and oil cost taxpayers $5tr annually. The City props up these disastrous investments. Yet, the clean economy represents a massive opportunity for jobs, pensions and sustainable growth.

Mr. Carney gets it.  He has warned bankers and insurers of the “catastrophic impact” of climate change unless firms disclose their vulnerabilities. He predicts an impending “climate Minsky moment” (the economist who showed how banks over-reached themselves before 2008), and emphasises that climate technology investments and infrastructure projects need financing at four time the current rate. The Aldersgate Group calculate that up to £693bn investment in UK low carbon infrastructure is needed by 2032.

Ridiculous then that the government has refused to mandate the same, as the Environment Audit Committee demanded. If banks, firms, insurers and large asset owners do not disclose vulnerabilities, how can the system work? A functioning market will price in those risks, and reward firms that mitigate them. But investors do not have the information to spread risk safely, allocate capital efficiently or grasp new opportunities.

Without deep risk identification and future proofed management – covering bonds, derivatives, insurance, investments, loans, pensions, shareholdings and purchases of carbon vulnerable companies – financiers will become fatally over-exposed to a range of stranded assets, whose value will quickly fall when governments scramble to keep carbon and methane in the ground. The sector will be forced into volatile readjustments, inevitably triggering steep losses. The global economy still hasn’t recovered from the systemic disruption of the 2008 eruption. It cannot cope with another tsunami of shocks.

Better news is that the global green bonds market grew by 78 per cent between 2016 and 2017, with national and institutional investors funnelling more than $150bn into low-carbon projects. But, despite claiming to be an international leader in green finance, the UK government has never issued a green bond.

The Prudential Regulation Authority – the finance and insurance supervision arm of the Bank of England – specifies how banks and insurers should account for climate risks. But a recent Bank survey found that nine in 10 banks don’t take a long-term strategic view of these material, fiduciary and reputational threats to their own assets and shareholders! British bankers don’t understand the climate as a system that can pivot into suddenly altered, destabilising states.

The UK market suffers other blocks too. The London Stock Exchange has launched a range of dedicated ‘green bond’ segments, offering issuers a flexible range of market models. But, although bond markets are guided by the ‘Climate Bond Standards’ and the ‘Green Bond Principles’, this green market is slowing.

Bond issuers and investors complain of the lack of clarity about the use of proceeds, asset performance and actual environmental impact; little or no tax driven pricing differential with plain bonds; the lack of clear principled regulation and information about additional investment benefit over BAU bonds; the disconnect between climate aware providers of capital and issuers who use the money to refinance existing projects or ones that would have been done anyway; and, boards’ fiduciary duty to maximise quarterly returns.

The Aldersgate Group and the business-led Green Finance Taskforce recommend key reforms to fulfill the potential of the Industrial and Clean Growth Strategies. They include: mandatory carbon reporting; a new fiduciary duty for company boards to account for financially material ESG (environment, social, governance) risks, including climate; embedded climate and sustainability requirements in public procurements; Clean Growth Regeneration Zones to guide finance towards new green industries; a dedicated public-private green venture capital fund (a Green Bank?!); a Green Investor Accelerator for early stage technology grant funding; and, a National Capital Raising Plan backed by government issued sovereign green bonds, alongside municipal green bonds and pension fund investment in low-zero carbon, resource-efficient infrastructure, including adaptation works like flood defences.

These measures are imperative for sufficient money to swing from BAU into clean growth. And here, as elsewhere, for public and private sector financing to propel the sustainable regeneration of the UK.

Conclusion

The solutions are out there. But only common good, nation uniting political leadership, coupled with inspired support from all sectors of society, will enable the economic and social transformation in time.

The connection between ecological disruption, social unrest and authoritarian government is as obvious these days as it has been throughout human history. The worse things get, the more dictatorial and trigger-happy government becomes, seeking out enemies at home and abroad. We have 12 years to resolve our current plight democratically and peacefully.

Whatever we do, we are the last generation for which there is hope. The last to be able to forestall a truly terrible near future, and manage the planet for a good life for all. We have entered the End Game.

Charles Secrett is co-founder of Robertsbridge