Would it be wishful thinking to hope that that there is a silver lining to the Covid-19 cloud hanging over the world? Every event that brings about change also brings about opportunities.
Sustainability, such a difficult word, yet one that encroaches on all forms of human endeavour, usually we end up casting sustainability aside on the grounds of cost but, our perception of cost is mainly an accounting construction that fails to tell the ‘whole’ truth.. If somehow we made sustainability the forefront of all Government’s environmental and economic policy we would surely make the world a better place for future generations.
I don’t profess to understand all the arguments on climate change, but I can understand that simply adding more carbon to the atmosphere than can be absorbed by our oceans and plant life is not sustainable and that at some point we will reach a tipping point from which there is little chance of recovery. If I know that I must surely ask myself “Why do it at all?”
We glibly talk of finding technological solutions, yet we ignore those that have been staring us in the face for the last few decades. The primary source of energy throughout the universe is hydrogen, we know we can get almost unlimited power from offshore wind, why are we not using the excess to hydrolise sea water releasing oxygen into the atmosphere and storing the hydrogen? Technologically it is relatively easy to store the hydrogen, pump it into our gas networks and convert our boilers to use hydrogen instead of natural gas, again not a major change, run our motor vehicles and power plants on hydrogen and instead of CO2 as a byproduct we have water or H2O! And guess what, we could even repatriate or restart our smoke stack industries while keeping our air quality better than even during the Covid-19 lock-down. Yes the changes might prove expensive, but they are all engineering things which do not require external technologies or equipment so the cost is not a true cost to the economy but a case of moving money from a left pocket to a right pocket!
In the words of Rishi Sanak “Our economy is based on consumption, and we have to get the people spending”. While no economy can exist if people don’t consume, we need to recognize that growth through consumption is not really sustainable. When we look at private debt within the UK economy we see that on average people are indeed spending more than their incomes, this probably applies mainly to those earning less than 125% of median income or around 70% of the population. This only seems sustainable if we have ever increasing property prices when in the long run the capital gain in the property will outweigh the income deficit, or so the belief goes. Sooner or later there will be a property price crash and the ‘misery’ Mr Micawber spoke of will come home to roost. (Charles Dickens in David Copperfield “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”).
There are two more reasons I have questions about the sustainability of ‘consumption’, one relates to our climate change debate. Who is responsible for the CO2 emissions, the emitter or the consumer of the output?
The second question is probably more to the point as it questions the very basis of conservative economic thought. In an economy that is consumption based, where imports represent 35% of the economy, increased consumption can only lead to an increase in the current account deficit, As explained in my piece on the world monetary system, payment is only completed by, the seller country, redeeming our promissory notes either with goods or assets, and we no longer have gold to offer.
Sustainability needs to be the guiding light for both political thought and economic policy. Both the Labour Party and the Conservative Party need to take careful stock of their policies as neither are sustainable in the long run, and both, are simply leading the voter ‘up the garden path’.
I will continue with more detail to some of the ideas thrown out in these articles.