Article 4 of 20 – “Industrial Policy in the Context of Climate Emergency”

Not an article, this time, but a report-

Bailey, Daniel (2019) Industrial Policy in the Context of Climate Emergency: the case for a Green New Deal. Project Report. Future Economies UCRKE, Manchester Metropolitan University.

This is a clear and compelling report, written in plain English, written at a very very specific moment (any report is, obviously, but this more so) – during the election campaign of 2019, where Labour under Corbyn put forward in its manifesto the closest we will probably ever get to a vision of how the British State might behave to give “us” a snowball’s chance in hell of getting out of this mess, while the Conservatives… didn’t. And of course, a couple of months after that election, the COVID pandemic got going. For me, this really helped me get some dates straight in my head (The Industrial Strategy of November 2017 – note, pre-IPCC report on 1.5/Greta/XR) and so on.

The whole thing is quotable, but for my current purposes, these were the bits that caught my eye –

“Inspired by the success of Ocasio-Cortez and the Sunrise Movement, a collection of grassroots campaigners, trade unionists and politicians from the Green Party, Labour Party and Conservative Party sought to revive a British version of the idea after a decade of dormancy in the early months of 2019 (Satow 2019, Miliband et al. 2019). The agenda has brought together young greenminded activists, a selection of labour unions (such as the shipbuilders in Belfast demanding the docks be nationalised and utilised for renewable energy production), and those politicians seeking to address the economic failings of current growth strategies.” (Bailey, 2019: 7)

[see Cohen’s Garbage bin model – old ideas get grabbed, dusted off, rebadged, repurposed (or just brought back!]

“The industrial policy component of the Green New Deal proposals are designed to usher in the kind of structural transformation of national economies required by the climate science. These proposals entail vertically supporting the growth of low-carbon economic sectors through subsidies and tax incentives, financing the expansion of renewable energy production, improving energy efficiency through retrograding residential and commercial buildings, enforcing stronger regulations and tax disincentives on fossil fuel companies and the industries fuelled by them, and rolling out low-carbon public infrastructure. The industrial interventions comprising the Green New Deal will differ between countries, but in the UK it could include [page break] the electrification of cars produced by the automotive industry, upgrading production systems in manufacturing and chemical industries, financing the production of solar and wind power, and imposing stringent green regulations on the financial sector.” (Bailey, 2019: 7-8)

“The orchestration of a green industrial intervention by policymakers at the Treasury and the Department of Business, Energy and Industrial Strategy will not by itself be sufficient to accomplish the harmonisation of environmental sustainability and economic sustainability. This accomplishment may require numerous other forms of government intervention and economic transformation in addition to, or immediately following, the implementation of a Green New Deal. This may include stronger regulatory and tax disincentives imposed on the industries most closely associated with ecological degradation (not least to ensure the ‘multiplier effect’ is channelled elsewhere), a complementary “post-industrial strategy” that supports economic sectors not likely to add to GDP but crucial to social wellbeing, and a renewal of the welfare system. It may also include more radical forms of economic transformation that challenge some sacred cows of capitalist economic management that go far beyond the ‘win-win’ policy scenarios being presented by Green New Deal activists.” (Bailey, 2019: 9)

“The language of industrial policy was re-introduced to British Politics by Theresa May in 2016, after a long hiatus in which it was widely seen as a relic of a bygone era. Its re-introduction was seen as a recognition that political action was required to tackle the various economic [page 9] weaknesses and dysfunctions laid bare by the global financial crisis, as well as the disaffection with the status quo underlying the vote to leave the European Union.” (Bailey, 2019: 9-10)

In November 2017, the much-anticipated industrial strategy white paper identified four ‘grand challenges’ towards which the government’s industrial policies should be geared – one of which was the need for “clean growth” (HM Government 2017).

This turn towards ‘One Nation’ Conservative interventionism, however, proved to be shortlived. Progress on ‘cleaning’ Britain’s growth model was soon hindered by the Treasury and the political maelstrom created by Brexit. As Theresa May struggled to command the support of her party in the midst of the Brexit negotiations, reforms to existing government policy proved more limited than initially anticipated. The continued emphasis on the conventional priorities and instruments of industrial policy – capital spending on infrastructure and support for R&D – reflected the antipathy towards state-led macroeconomic change held by many senior figures in the Conservative Party.” (Bailey, 2019: 10)

And, spoilers! –

“Time is running out on our ability to mitigate the most catastrophic consequences of the climate crisis. The timeframe given by the IPCC demand that British economic statecraft in the 2020s – of which industrial policy is a key component – become cognisant of the environmental targets agreed by the 2015 Paris Accord. This requires the historical silos between the government’s economic and environmental objectives to be speedily dismantled.” (Bailey, 2019: 16)