E3G

Confidence in a low-carbon economy: John Ashton interview

By Chris Littlecott

What is the biggest obstacle to building a low-carbon economy?

Lack of self-confidence. Let’s take China. We have a debate about China in Europe, which is actually very one-dimensional, and it’s driven entirely by concern about disinvestment, competition and losing jobs. We probably both fail to understand the interdependence between our two economies. We will only capture the opportunities that arise from that interdependence if we make an effort to understand the complexity. And we’ll only make that effort if we are confident to do so – if we’re confident enough to lift ourselves above the debate just about competition about the labour productivity of capital.

There are quite a few salient features of that interdependence. For my generation of Europeans it’s very important that China continues to flourish. I need European pension funds to invest in a rapidly growing Chinese economy, to get the necessary returns, to pay me a pension. The same applies to you [in CEE].

Furthermore, not only is China growing rapidly, it’s creating new capacity to innovate faster than any other economy in the world. That’s an asset not only for China, but in order to realise its value you have to engage with it. For example, if you want to bring low carbon technology into rapid deployment, the fastest and cheapest place to bring them to maturity – so that you can bring down the unit cost – is China. So we have to ask, on the basis of where we got in the spring Council: How do we reflect this in our economic relationships with our major partners? What are the trade and investment frameworks between Europe and China that will accelerate a low-carbon transition in both our economies?

We need to look right across the economic relationship with China and with our other major partners, and to say how we can use these relationships to amplify the signal that we initiated at the Spring Council. That will make us and our partners able to build low-carbon societies faster than we otherwise would.

At the moment, there’s a real question of whether we have that confidence to do that. So, those of us who want to see the transition need to be asking ourselves how to build that confidence. How can we build a vocation which is outward-looking and self-confident, and therefore capable of bearing the weight of these policy structures that we need to build to drive the transition?

What do you believe is the first step to be made?

One thing I would focus very much on is the European budget. We know we have to modernise the budget anyway, and we’ve agreed to have a review of it next year. Part of that review should explain how we can have a budget for energy and climate security in the same way that we had a budget for food security 60 years ago. We need a budget for today’s problems, rather than a budget for yesterday’s problems.

This interview was inspired by E3G’s “Europe in the World: Political choices for security and prosperity” pamphlet, which can be found at www.europeintheworld.eu.