E3G

Confidence in a low-carbon economy: John Ashton interview

By Chris Littlecott

What do you think Europeans need to be prepared to do without in order to build a low-carbon economy?

It’s never very good politics to say to people that they should give things up, but we’re now beginning to understand the picture of low-carbon economy in a lot more detail. The conclusion of the recent review by my colleague, Sir Nicholas Stern, was very clear: There will be some cost, but it won’t be overwhelming. The political problems of that cost will be disproportionately great because there will be distributional issues, and distributional politics is always very difficult. But, against the background of a healthy and attractive prospect of welfare and prosperity, I do not think this is predominantly about cost and sacrifice – I think it’s much more about opportunity. There are huge opportunities in building a low-carbon economy.

Let’s be very specific. We’ve had a fairly substantial increase over the last two years in the cost of electricity, and even more in the cost of natural gas [in the UK], for structural and investment reasons which we are now overcoming. So the costs of natural gas and electricity are now falling or about to fall. At the beginning of that process people said: “This is terrible, this is going to ruin the economy.” Energy-intensive industries in particular were saying that. But actually, the effect on the economy has not been significant. We’ve been able to adsorb higher energy prices, and that is very revealing because the concern about climate change is largely a concern over higher energy prices – the impact of climate change on competitiveness.

What is very important is to make sure that we move as quickly as possible from debating these issues on the basis of rhetoric to doing it on the basis of analysis. This is why the Stern review was so important. It started to give us an analytical base about these very difficult political debates about competitiveness, jobs and growth that we are going to have as part of this transition. But the dominant feature of that process will be about opportunities, rather than about sacrifices. And my opinion is analytical, rather than instinctively optimistic.

The Independent ran on its front page a list of “50 reasons to love the EU” – and reason number 16 is: “Europe is helping to save the planet with regulatory cuts of CO2.” With prosperity, the common market and consumer rights ranked third through fifth, doesn’t it seem that there needs to be a bit more love for addressing climate change?

The language of this question is very revealing – let’s deconstruct it. To “save the planet” is an environmental proposition. I think the most fundamental thing about a successful response to climate change is building a sense that this is not primarily about the environment. This is about prosperity and security.

We won’t be secure, and we won’t be prosperous unless we are effective in responding to climate change. It’s not about the planet – it’s about us. There is a kind of assumption – as soon as you say “environment” – that this is separate from the economy. This is about the fundamentals of the economy. If you want a healthy economy, you have to address climate change, which is what the Spring Council was saying. So I don’t think that talking about saving the planet takes you to the heart of the matter.