SERA: We need a climate emergency spending review

Over the last fortnight, Extinction Rebellion climate protests have shut streets in central London. The BBC has aired its hard-hitting climate change documentary. Swedish student Greta Thunberg, who inspired thousands of school children to join her protest on climate change, met MPs last week to deliver her warning. The message: ‘Tell the truth – we face a climate emergency’. Some have criticised the tactics of Extinction Rebellion, but the protesters have made a stand. As one banner summed up: “The greatest threat the planet faces is the belief that someone else will save it.”

Labour has added its voice. Labour MPs including Jon Ashworth spoke at the XR protest. Labour councils have declared climate emergencies. This week, the party will table a parliamentary motion to force a vote on the climate emergency. The committee on climate change is also expected to recommend that ministers set a net zero target. The moment has to be seized and a red-green voice is needed more than ever to champion a sustained at scale, rapid change to a net zero emission economy. We also have to counter the inadequate media and political discourse regarding the urgency and scale of change needed.

The world is warming like never before. We’ve 11 years to make the changes to have a chance – not guarantee – of avoiding catastrophe. The more time we take, the more expensive the changes become and the smaller our chance of success. There are calls to recast economic orthodoxies and remake political systems, but that will take time. We must secure change as soon as possible by harnessing the tools available to us. There’s one that can be grasped now, and that can underpin the declaration of a climate emergency this week.

At the heart of UK policy-making is the Treasury. It tightly clasps the government purse strings, the tax system, and business and economic framework. In March, the Chancellor announced a spending review covering the next three years. All government spending, priorities and programmes are assessed, and the review sets the direction for further ahead. Little has been said as to how the review will support climate goals. It’s being used more as platform for the Treasury Chief Secretary, who’s leading the review, in her bid to be Prime Minister. Climate progress, not posturing, is needed.

Currently, the UK isn’t set to meet its fourth and fifth carbon budgets. The fourth begins in 2023 as the spending review period is due to end. At what point will a spending review underpin carbon budgets? The next one? We should have had a green spending review years ago. This is a huge test for the government. If it is ducked, to use a WWII analogy, it’s akin to not rearming as the war loomed. Labour must urge ministers to commit to a climate emergency spending review (CESR).

A CESR would mean reviewing all expenditure, projects and programmes, from tax to procurement, through the lens of reducing carbon, to cease investment in fossil fuels and carbon-intensive practices and support a rapid move to decarbonisation and a net zero carbon economy. Too little government spending has a climate change priority. In contrast, 25% of the proposed EU budget for 2021-2027 will be climate-related.

Detractors say the UK is doing better than other countries, so what’s the problem? Yes, emissions have dropped faster and fallen for the last six years, but this is almost entirely due to the phasing out of coal. Gas emissions are largely static; oil emissions have risen. Transport emissions haven’t reduced since the 1990s. The rate of reduction is also slowing, and last year’s fall was the smallest in six years. We face a climate complacency. Too many policies are still causing climate harm.

Export support is helping fossil fuels, such as funding an expansion of an oil refinery in Bahrain. Why is it not targeted towards renewables and the green transition, for example carbon storage and capture to assist in coal-dominant Eastern Europe? Today, special rules enable fossil fuel fracking while other policies prevent onshore wind, the cheapest energy. Businesses investing in solar panels can see increases in business rates, holding back a rapid take-up. There are countless similar examples. A CESR is about every assessing every area of government. The NHS, for instance, is the public sector’s largest carbon emitter and produces huge amounts of waste.

A second element of a laser-like green focus is doing things differently. Departmental carbon budgets are one idea. Shadow Treasury minister Clive Lewis has been devising these with Sir Bob Kerslake, former civil service chief. Shadow Transport Secretary Andy McDonald recently explained how he would introduce them for the Department of Transport.

Government must be able to think and act quicker. On Tuesday, I spoke to a Tees Valley business at a hydrogen showcase in parliament. Half of the country’s hydrogen production is in the Tees Valley. The business is hugely supportive of the potential from transport to industry to housing, and wants to rapidly move forward. Yet it’s taken 18 months for the government to agree that there is potential. Meanwhile, we’ve lost time tackling climate change, holding back investment and job creation.

The third pillar of a CESR brings us back to awareness. There’s got to be intensive public discussion of the challenges ahead. Change can’t be to people, but must be with people. We need to ensure that the greatest beneficiaries of the green transition are the ‘left behind’. As I’ve previously argued, climate action must not simply be a matter of obligation. There is a compelling positive case. Achieving net zero carbon means meeting carbon goals and bringing significant benefits – lower utility bills, affordable-to-run homes, cheaper travel, more mobility, improved health, saved lives, economic resilience, innovative new industries, skilled well-paid jobs and community investment. The journey isn’t easy but the prize means we can save ourselves and secure a place in which we want to live.