Pat Kane: How much should we be spending on climate crisis?

Keir Starmer and Rachel Reeves rubbed out their £28 billion a year commitment to climate investment and infrastructure. On the same day, we learned – from the EU – that global warming had gone above 1.5C for a whole year (Feb 2023 – Feb 2024).

This is not a happy conjunction of numbers. Blaming Liz Truss and the damage of her fiscal chaos, StarmLab claimed their “green prosperity” plan was only being cheese-pared, not junked.

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Policies like millions of newly insulated homes; a publicly owned Great British Energy company and National Investment Bank; support for private investment in green hydrogen; carbon capture; clean steel; renewable-ready ports and gigafactories – all these seemed to be retained, but with much lower levels (more than half) of public investment.

Lurking behind all this, it’s extraordinary to me how fearful and traumatised the Starmerites believe their target voter is. Even the mild Keynesianism of a green new deal – one that will actively create jobs, with a precedent set by the green spending programmes of the US and the EU – is seen to be susceptible to Tory attacks.

I have my suspicions about where this belief is sourced. The current state of play in neuroscience, as represented by figures like Anil Seth, Lisa Feldman Barrett and Andy Clark, assumes the human animal is a deeply “conservative” creature.

The dominant “predictive processing” school in neuroscience makes this core assumption. That the primary, nearly panic-stricken goal of any human (or complex organism) is to anticipate and avoid risk – indeed, any event that might threaten one’s capacity to survive, let alone thrive. The Conservatives, with their recent line of frothing, swivel-eyed extremists, have blown their reputation for stability, their role as the “conservers” of tradition.

They look like a threat to the “homeostasis” or “allostasis”, the internal balance and anticipation, of the voting organism. An entity jangled and challenged by cost of living, debt, pandemics, culture wars.

With the internal spectacle of Jeremy Corbyn (to my mind never justified) rendered as an “extremist”, cautioning their every step, StarmLab are neurotically “de-risking” everything about their prospectus. That’s the deep pulse in the muscle of Reeves “securonomics”. There’s a great irony here, of course. Such a “securonomics” cancel those crucial green expenditures which will strengthen us against the largest existential risk of all.

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I’ve been scouting around comrades, compatriots and colleagues for their take on all this. The political opportunities are already noticeable. The mantle of “security” – who’s going to protect you best from the buffeting and shocks of the age? –could easily be borne by the current Scottish Government.

Child payments, free prescriptions, free tuition and other measures are clear buffers against an increasing burden of basic living. They’re also policy distinctions that sit to the left of the current offers from StarmLab. Meaning they could be easily be made to count in Scotland during a General Election.

There are the usual limits, though. In Scotland, it’s impossible to make the kind of “3% of GDP” green spending commitments (for the UK, meaning £77bn a year), suggested by the London School of Economics’ Joe Ward – a percentage that could catch us up with China or Europe. Scotland only has a partial and minor grip on the necessary macroeconomic levers.

A few years ago, my friends and colleagues at the think-and-do tank Common Weal showed how high the bar for green investment ambition could be placed in Scotland.

Their Common Home Plan from 2019, assuming an independent Scotland, calculated a Scottish green new deal as spending £170bn spread over 25 years, (and paid back over 50 years). The job of work included radical reform in laws and institutions around building, heating, electricity, transport, food, land, resources, trade, learning and lifestyle/culture.

I caught up with Common Weal’s head of policy Dr Craig Dalzell the other day. Craig says the problem with Labour’s £28bn climate pledge “wasn’t that it was too large but that it was far, far too small”. “The bill Common Weal might project now will be higher thanks to Conservative mismanagement of the economy, as well as the additional damage and time lost by delay,” he told me.

"Also, we need to deal with the fact that we’re losing the ‘first mover’ advantage as other countries build up their supply chains ahead of us. If we buy our transition from them, they keep the profits and we subsidise their transition instead of bootstrapping our own.”

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Starmer should not have dropped this pledge because he didn’t want to upset Middle England voters, continued Dr Dalzell, “He should have doubled, tripled, quadrupled down on it and told people how it would have benefited them.”

“Instead, they (and the rest of us) will have to put up with cold homes, high energy prices, car-clogged roads, rising seas, choking air and all of the other costs that will come with failing to tackle the climate emergency”, concluded Craig. “Costs that will far, far outstrip the £28bn cost Starmer is evidently not willing to pay to prevent even some of it.”

Another dispiriting element of the StarmLab retreat was the use of the metaphor that the “UK Government has maxed out its credit card”, compelling a reduction in eco-spending.

Don’t we know by now that sovereign nations, possessing their own currencies, do not work like personal accounts or home economics?

Doesn’t the sheer scale of cash produced by national exchequers to cover the emergency costs of the pandemic – hundreds of billions for scores of months – show how powerful national economic sovereignty can be? And, given the urgency of the climate emergency, can’t we do better than 1% of total UK Government spending and under 0.5 % of GDP?

The modern monetary and economics theorist William Thomson, founder of Scotonomics, objects mightily to the notion that “fiscal rules” (as cited by Starmer and Reeves), should be a brake on us devoting resources to ecological improvement and resilience.

“Fiscal rules hamper not only our climate response but also our actions on poverty, food security and inequality”, William told me. “Economist Stephanie Kelton calls this ‘learned helplessness’ as we sit idly by, worrying about the national debt’ which is nothing more than a score count of pounds in circulation, yet to be taxed back.”

“Governments across the globe must adopt what economist Mariana Mazzucato calls a Mission Economy”, concluded Thompson, “where we identify the climate problem and resource up to fight it.”

For the Scots indy case, the real challenge is to establish a bridge between two forces.

Those who see “green prosperity” as the means and pathway towards a deep transformation of Scottish life and society. And those who worry about a sovereign Scotland surviving in the shark-infested world of financial speculators and corporate energy lobbies.

It’s fair to say that such a bridge is currently wobbly and badly built in places. Scottish Green politicians are finding the compromises of government as tricky as expected – pictures of Green leaders ensconced with commercial interests don’t run too well with their base.

There’s also a degree of embarrassment that the Starmerites, however benighted, are nevertheless running with a national energy company, able to bid for and benefit from renewable franchises. This is an idea hatched by Common Weal up here – but it’s still not on the horizon for the next round of Scottish energy licences. Erk.

It’s a mighty tumult, this development of our systems to cope with climate emergency – and it’s all too easy to get lost in the detail. The indy-minded can hardly deny they have their own tray of fizzy wine to get across the slippery dancefloor (for example: do we deride Reeves and her “fiscal rules”, while accepting such rules as a condition of EU membership?).

But all reasonable parties should remember that this ballroom is probably on the Titanic, just as the iceberg looms. Some policy spillage may be required, if disaster is to be avoided.