THE GOVERNMENT’S LOW CARBON TRANSITION PLAN AND THE TRADE UNIONS’ MILLION JOBS PLAN – WHAT’S THE DIFFERENCE?

Prof. Barbara Harris-White looks at the flaws in the government’s strategy. The briefing paper below is based on her talk.

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1. In July 2009, after more than a decade of policy instability, wavering and issuing many other plans and goals for Britain’s climate change response, the government published a Low Carbon Transition Plan (LCTP). If you know about this and want simply to know the answer to the question in the title, please fast track to section 7. For everyone else, this briefing tells you about the government’s plan, what the problems of the plan are, what the Tory alternative is, and then what the unions are doing.

The gist of the LCTP is this:

We will cut Greenhouse Gas (GHG) emissions by 34% on their 1990 levels – and by 18% on their 2008 levels by 2020. This will happen in five parts of the British economy – energy, transport, homes, workplaces, and agriculture/waste. By 2020 there will be 1.2 million green jobs.

Energy/ ‘Power’. Half of the total emissions cuts between 2010 and 2020 will come from shifting to green power. Three quarters of the drop will come from shifting to low carbon energy – renewables – and one quarter from shifting from oil and coal to nuclear power and ‘clean coal’. We will import half the gas we currently import and a ‘smart grid’ will link the many new energy sources with the national distribution network.

Transport. One fifth of the total drop between now and 2020 will be in transport (a 14% drop on 2008 levels). This will be achieved by cutting the emissions of the average new car by 40% (more on other vehicles below). Electrical charging points will be created in 6 urban areas. All air transport within Europe will have to join the EU’s Emissions Trading Scheme (more on this below).

Homes. 15% of the total drop will be in homes, achieved by means of improved energy efficiency (insulation, more efficient boilers, etc) together with the use of renewable energy technology (solar heating, etc) in 1.5 million houses. ‘Pay as you save’ schemes will help those who install renewable energy at home to pay for the costs as they save CO2 emissions.. Fifteen towns will champion innovations. 7 million homes will get whole-house make-overs to conserve energy. All this will reduce 2008 levels of CO2 emissions from homes by 29%.

Workplaces. A tenth of the planned drop will be at work (a fall of 13% on 2008 levels). More workplaces will be included in the EU’s Emissions Trading Scheme (discussed below) and there will be subsidies and support for UK based renewable energy manufacturing.

Agriculture and waste. These two sources will – contribute 5% of the total drop (6% on their 2008 levels). The efficiency of fertiliser, manure and livestock rearing will be improved, reducing their CO2 emissions. More woodland will blot up carbon that is already in the atmosphere, and new technology will convert waste into renewable energy.

2. There are many elements in the Labour government’s LCTP that trades unionists might want to SUPPORT:

a. The government recognises the seriousness of climate change.

b. This plan is a commitment – if they win the May election, the Conservative Party will find it hard to reduce the level of commitment in the plan.

c. Each sector knows what is expected and in the months following the publication of the Plan they have been getting on with developing detailed plans for each of their sectors.

From the government’s own documents let us look at some of this newly developing DETAIL.

Energy / Power: Planning is being simplified and speeded up (which increases the power of central government). The subsidies being mentioned are relatively small ones, compared with the enormous – and not publicly available – public resources still devoted to direct support for non renewable energy running to at the very least £2.6 bn – – £6m for the smart grid; £6m for geothermal energy; £60m for tidal and wave power , and £120 m for offshore wind (after the skilled and versatile labour force at Vestas (on-shore wind) was allowed to be laid off last summer). In the EU only Sweden gives lower subsidies to renewable energy. Those of Germany, Denmark, Italy, Austria, France and the Netherlands are 2-3 times greater than the UK’s per unit of output.

Transport: There are chicken and egg problems: plans for plug-ins but no direct planning of electric cars. (Our automobile industry is not a British one any more – and our governments have to offer ad hoc incentives for foreign firms to manufacture electric cars, as has been publicised in early 2010.) The freight sector has not yet even been ‘monitored’. Carbon efficiency in the freight sector has to be co-ordinated across Europe and will improve at the speed of the slowest EU member.

Homes: New buildings are now required to be energy efficient by 2015. But new building has been adding just 1 % per year to the total housing stock. The schemes for existing stock (e.g. roof and cavity-wall insulation, double glazing, efficient boilers and fluorescent lights) are small and voluntary ones.

Workplaces: 15% of our carbon emissions come from workplaces and they are supposed to contribute 10 % of the total cut between 2010 and 2020. This could mean up to a 25% drop on current levels The lead will be taken by public sector buildings (11% of workplace GHGs) with only advice and persuasion being applied to the private sector (89% of workplace GHGs).

Agriculture and waste (twinned for no apparent reason): It’s claimed that the Plan gives agriculture emissions reduction targets for the first time, but the targets are actually lower than current projections – agriculture has been reducing emissions for some time. A Trust will be created to help farmers become eligible for interest-free loans for carbon reduction. Woodlands will be ‘encouraged’. Anaerobic digestion (where micro-organisms break down organic waste without the help of oxygen to produce bio-gas and organic fertiliser) will also be ‘encouraged’. And the public will be ‘encouraged’ to reduce the waste going into landfill – although the organic waste produced from households provides the methane gas coming from landfill that is currently counted as a renewable form of energy – a slight problem there.

Green jobs: Claims about job creation are coming in – but wind power for instance is tagged to create only 4,000 jobs and already faces shortages of skilled labour. – An adequate expansion of wind power alone could easily create over 50,000 jobs.

The themes which emerge from the detail of the LCTP are:

i) Many initiatives are being taken – consistent with decentralising government responsibility wherever possible.

ii) Relatively small sums of public money are currently involved – consistent with an over-arching neo-liberal ideology.

iii) The emphasis is on voluntary schemes and persuasion – consistent with the idea that the individual consumer – and private firm – is sovereign.

3. WHAT IS WRONG WITH THIS?

There are five big problems with what the LCTP is trying to do.

1. Urgency and severity: There has to be a new industrial revolution that happens faster than the pace of development and adoption of mobile phones and the internet. From the base line of 1990, the UK’s emission of greenhouse gases has declined by 1% a year, from but from now on the official line is that they have to drop by 3%.

But this is an UNDERESTIMATE. There are 2 reasons why:

i) Until now, international transport and freight have been ignored, while both have vastly increased. Now they are included in the 2050 target but the plans for them are weak (see the discussion of the Emissions Trading Scheme below)

ii) The target level – limiting Carbon equivalent in the atmosphere to 450 parts per million is now known to be a dangerously high goal. NASA scientist James Hansen – the US’s own climate change supremo – now thinks that to avoid a very high likelihood of catastrophic climate change, the level should be 350 ppm. It is already 385 or more.

Since the goals of the LCTP are based on underestimates of the seriousness of the adjustments to be made, the plan itself needs to be far more ambitious from the start. Its goals and its funding are much too weak.

2.Who bears the costs: Wherever possible, the LCTP shifts the costs of adjustment onto individuals and firms but the money savings they trumpet on a range of changes we can make are far, far less than the capital costs of installation, for which little financial help is proposed. The costs are considerable, the ultimate benefits are collective, and they need major public sector investment.

3.The key policy instrument: In the LCTP, the key instrument is the EU’s Emissions Trading Scheme, also known as ‘Cap and Trade’. Under it, industries and other activities identified by the government as polluters (government departments, council offices, colleges etc) all are issued with permits to pollute to a fixed level. In theory, activities covered by the policy can be widened over time and the caps on pollution can be tightened by the government year after year. If activities exceed their permitted pollution levels, the polluters are fined and/or have to pay for further permits to clean up polluting activity in developing countries (where it is cheaper to clean up than here), as a substitute for reducing their own emissions (termed off-setting). Or it is hoped that they can innovate and reduce their pollution to under the levels of their cap.

There are three massive problems with this.

i) . It is justified as a market solution to a problem caused by markets. But it is a peculiar market, because it is run by states, or state-like bodies – in our case the EU. But apart from the difficulty of identifying schemes in developing countries which really would not have been set in motion without the carbon trading schemes, and apart from the fact that permits are only for CO2 and not for other dangerous gases like nitrous oxide and methane, and apart from routine corruption, the main problem is that special pleading by industry groups inside the EU results year after year in too many permits to pollute being handed out – at present free. As a result, the price of carbon emissions, which is supposed to act as an incentive to innovate and make efficiency savings, is so low and so unstable that it does the precise opposite. It is a disincentive to innovate and adapt. It advantages old firms and disadvantages new firms with more efficient technology.

ii) The UK’s LCTP consists of the plans for that part of the UK’s GHG emissions which does NOT come under the Emissions Trading Scheme. This is reckoned to be a mere 30% of our total emissions. Up to now, the UK’s climate change policy has never been other than stop-go; under-funded; subject to repeated delays (e.g. for renewables as well as for nuclear energy, for changes to the grid, and for combined heat and power generation in a single process). It has been vulnerable to local political opposition wherever responsibility has been given to local governments (notoriously for wind power). It has been repeatedly revealed to suffer from poor enforcement capacity (for example half of all new building flouts the energy efficiency laws). And there is no sign in the LCTP of how these features of ‘policy in practice’ will be changed.

iii) Most of the UK’s polluters – 70% of total GHG’s which has been identified in the plan as being produced under conditions making it eligible for the EU’s Emissions Trading Scheme – will find it easiest to buy ‘clean development permits’ for projects in developing countries and so dump their responsibility abroad. That is 70% of the low carbon transition plan. Developing countries have to meet all their own domestic targets and plans PLUS all the offsetting of the major polluting countries. No-one has the faintest idea how we/they will do this. Naturally, big developing countries are focussing on their own energy and development problems and ignoring ours.

Other aspects of the government’s LCTP have been noticed. The long term – after 2020 – seems not to be a cause for concern; the assumption is that British society will operate in much as it does at present. There is no concern for new forms of city design based on new public transport technologies. There is nothing in the plan about providing the safety net that we would need for a 5-10 year transition period during which UK agriculture could move to low carbon/organic farming, which has been shown to be capable of producing the food and high quality employment our population needs – given some dietary changes. The LCTP is ‘intensely relaxed’ about the third Heathrow runway, will not tax aviation fuel, displays an extraordinarily trusting faith in new ‘clean’ coal power stations that are to be built when the ‘carbon capture’ technology to make them clean does not yet exist – (it is supposed to be fitted retrospectively, once it has been invented). ‘Clean coal’ is not in fact clean energy. Neither is nuclear energy – it produces extremely toxic waste – and is non-renewable. Coal and nuclear energy are also bottomless private pits for the tax-payer.

4.HOW ROBUST AND BIPARTISAN IS THE LCTP?

While we might wish to celebrate the LCTP as at least a start of the comprehensive planning that industry and finance lobbies have been calling for, for over a decade – the Tories, if they win the coming election, will change the LCTP since they already have their own Emergency Plan.

The Emergency Plan points out quite correctly that UK energy policy is unstable (the only stable elements are really

i) competition to cut costs and

ii) the regulator, OFGEM, which monitors price rises – our current policy is in hard reality one for quick, cheap and dirty energy).

But all it offers in alternative is a plan for

i) ‘clean’ coal and a new nuclear building programme (i.e. more dirty energy);

ii) a £6,500 subsidy to each home for energy efficiency (a good idea if there is a skilled labour force and the right materials at the ready); and

iii) a concession to the popular argument that the revenue from taxes on wind farms’ profits should go to local councils rather than the Treasury.

5.HOW ABOUT THE TRADES UNIONS?

In view of the pervasive incoherence and instability of government policy, and watching the huge gap between plans and achievements, TUs have made a start in developing

i) Good practice within the union – at HQs; in travel etc;

ii). Good practice in the workplaces of union members with a campaign for the recognition of environmental reps everywhere;

iii). Campaigns – against a new generation of nuclear power stations; against the 3rd runway at Heathrow; for feed-in tariffs for renewable energy from small local sources, including households, which have been shown in Europe to be the most effective way of subsidising innovation – a subsidy that can later be phased out.

PLUS THE MILLION JOBS CAMPAIGN

6. THE ALTERNATIVE PLAN – ‘ONE MILLION CLIMATE JOBS NOW!’

OF THE COMMUNICATION WORKERS’ UNION (CWU),

THE PUBLIC AND COMMERCIAL SERVICES UNION (PCSU),

THE TRANSPORT SALARIED STAFF ASSOCIATION (TSSA),

THE UNIVERSITY AND COLLEGE UNION (UCU) ALONG WITH

THE CAMPAIGN AGAINST CLIMATE CHANGE (TRADE UNION GROUP)

http://www.pcs.org.uk/en/resources/green_workplaces/green_campaigns/one-million-climate-jobs-now.cfm

This is the trade unions’ plan for a million jobs – not by 2020, but now. The new industrial revolution needs to start now – deploying all the authority of the state that the East Asian ‘tigers’ put into their ultra-rapid industrialisation.

Energy / power: the rapid development of a coordinated renewable energy sector (without which other activity will not reduce CO2) – especially wind and tidal energy, along with corresponding changes to the national grid. High priority also therefore for research and development in energy storage.

Transport: the rapid development of sustainable public transport systems and networks, with co-ordination between new high-speed rail, buses, trams and rapid transit (designed for large loads carried by passengers) and electric cars and bikes. Safe networks for cycling. Such developments could easily cut emissions from transport by half and create a million jobs in this sector alone.

Homes: the immediate start on insulating all private homes (which currently account for a quarter of UK emissions), and tight regulation of home appliances.

Workplaces (12% of total emissions) : the redesign and renovation of offices, shops and factories so they are efficient environments – including for the production of the new efficient technologies, machinery and equipment that also need to be manufactured.

Agriculture: a background paper produced for the Million Jobs Plan summarises the argument that up to 200,000 good quality jobs could be generated in low carbon agriculture.

Last, but most importantly: ONE MILLION JOBS WHICH CUT CO2 NOW OR AS SOON AS POSSIBLE, which can only be done through a National Climate Service. Skills, training and continuous retraining need investment across the board, from climate awareness throughout industry through highly skilled engineering jobs to less skilled jobs in home insulation and maintenance and knowledge and skills at school.

7. DIFFERENCES BETWEEN THE GOVERNMENT’S LCTP AND THE TRADES UNIONS’ MILLION JOBS PLAN

There are at least TEN differences.

1.The Million Jobs plan has a tighter and clearer definition of green jobs than the LCTP.

The trade union researchers found that rather little work has been done worldwide on climate change and jobs. The Million Jobs plan gives justifications for well over a million jobs, for how they might be sequenced, organised and paid for. In sharp contrast, the LCTP has little detail on jobs and the phrase ‘green jobs’ can mean anything from jobs in the water industry or the national parks to flood control. We mean jobs that reduce CO2.

2.The Million Jobs plan has an immediate goal of a million jobs and has shown how many more than a million jobs could be created immediately – while the LCTP’s 1.2 million supposedly green jobs are to be created by 2020. The Million Jobs plan integrates the response to climate change with the need to give people decent jobs – jobs with the right to join Trades Unions. Unemployment is 2.5 million and rising. It is folly to cut jobs when there already is massive unemployment.

3.The Million Jobs plan accepts that many industrial jobs will be lost in the transition to a low carbon economy and demands integrated re-training. There is hardly anything on either possibility in the LCTP. The Million Jobs plan is also preparing the case for up to 200,000 good quality jobs in low carbon agriculture.

4.The Million Jobs plan sees a National Climate Service as fundamental to the changes ahead. With the private sector trying to save in response to the recession, only the public sector can spend now. Besides, a lot of coordination will be required which only the public sector can do. Also, only the public sector is publicly accountable, and the concerned British public will need to know what progress is being made. By contrast the LCTP sees its project as advisory, low-cost and beamed not at galvanising the whole of society but (with the exception of champion towns) largely at encouraging individuals and firms.

5.Energy.The Million Jobs plan would reduce CO2 reduction at least twice as fast as is planned by the LCTP. It would create at the minimum 250,000 jobs in the energy field. The Million Jobs project would go for feed-in tariffs for new renewable energy whereas the ‘renewables obligation’ favoured by the LCTP – setting firms renewable energy targets of ‘x %’ – has proved to suffer from lack of enforcement – as well as being unrealistic given the lack of funding.

The LCTP is for ‘clean coal’, while the Million Jobs project recognises that coal is not clean and that whether carbon capture and storage technology is a real possibility is controversial; so it favours an experimental approach to clinch the matter.

6.Transport. The Million Jobs plan has altogether a much more ambitious and co-ordinated vision for transport than the LCTP. It also argues for public ownership, while the LCTP does not envisage any change in the structure of ownership of the industries concerned.

7.Homes and workplaces. The Million Jobs plan would aim to make the entire housing stock (there are 22m houses in England alone) energy efficient. The LCTP envisages making only 7 million homes energy efficient by2020.

The Million Jobs plan would also add efficiency standards for appliances to their plan for energy efficiency in homes and workplaces.

8. Other greenhouse gases. The Million Jobs plan is concerned with nitrous oxide and methane – each 5% of the UK’s GHG emissions, whereas the LCTP plans in terms of CO2 alone.

9.Resources. The LCTP minimises and externalises its costs while the Million Jobs plan is concerned to tackle them head on. The capital costs – – the investment costs that would be incurred to develop the technology, machinery and equipment needed for the jobs – are at present unknown. Estimating the variable costs – the running costs including wages, employers’ national insurance and pension contributions, materials, fuel, rent and interest – is currently being done. This is work in progress because existing research doesn’t examine these questions. The little existing research that does look at capital costs varies in its estimates between £30k-50k per job (in energy efficiency) to £500k per job (on the frontiers of research in renewable energy). If an average of £100k per job were taken as a ball-park capital cost estimate, up to £100bn might be needed over ten years. To put that in perspective, in 2006 Sir Nicholas Stern called for 1% of GDP to be spent each year on the response to climate change (£14bn), and he is now calling for double that – 2% which amounts to £34bn in 2010. To put this in perspective, £850bn has just been spent on bailing out the banks and £200 bn more on quantitative easing. And in another perspective: the war in Iraq has been estimated at over $1tn for the US alone so far.

The variable costs for a million jobs might come to £50bn – but every person employed would generate tax revenue for the state and reduce the unemployment benefits the state would otherwise have to pay out. Similar win-win revenues would come from the additional employment created by every job in the National Climate Service. The net total of the variable costs might well be reduced from £50bn to £20bn. The details are in the pamphlet to be found at

http://www.pcs.org.uk/en/resources/green_workplaces/green_campaigns/one-million-climate-jobs-now.cfm

This Million Jobs pamphlet also shows how such sums could be raised – even in an era when the political debate is dominated by impossibly stretched public finances and the alleged need for job cuts and cuts in public spending – with tax increases treated as unthinkable. The means are as follows:

i) Borrowing – far higher public debt than we currently have has actually been normal until the era when the British economy has been dependent on the demands of City finance.

ii) Quantitative easing for the long-term public good – £20 bn is1% of the money printed for quantitative easing during the financial crisis. It can be done without wrecking the economy.

iii) Green bonds issued by central or local government or by banks at low interest for the Million Jobs project.

iv) Requirements that the repayments by banks of their loans from British taxpayers during the financial crisis be redirected to reducing CO2. 5. Tax reforms. The total tax take could be increased by at least 10% if a premium tax were levied on banks; a small transactions (‘Tobin’) tax were levied on financial transactions; if tax on the top 10% of the distribution of taxpayers were increased; if large tax avoidance loopholes were closed; and if taxes were imposed on the negative environmental externalities of companies producing them (estimated at $2.2 tn by just the top 3000 companies worldwide).

v) Cancelling Trident.

vi) Withdrawing from Afghanistan.

vii) Removing subsidies on fossil fuel (especially aviation fuel) and nuclear energy

10.Politics. In addition the more equal society that would result from the Million Jobs plan would be a more just and happy one than the one envisaged in the LCTP. It has recently been shown by statistical studies worldwide that the greater the inequality the greater the social dysfunctions throughout the entire income distribution, and GB is one of the most unequal societies.

While the LCTP relies on advisory quangoes and persuasion – out of fear of disrupting the foreign owners of Ukplc – the Million Jobs project would be a domestic project with at its heart the quarter of the workforce who, as trades unionists, are its most active and progressive component. .

While the LCTP is left to be developed by government departments, the Million Jobs campaign is up to us – in our workplaces, in the groups we all belong to – in ‘civil society’ – in engagement with the political parties. When John Redwood reaches out to Mark Serwotka on Newsnight there is certainly change in the air. More than ever in recent history we all need refreshed dialogue inside trades unions and the voice of trades unionists to be ever more loudly sounded in society.

By all means discuss the LCTP, but on scale, ambition, speed, coordination and the need for public monitoring and democratic accountability, the Million Jobs plan is the plan that trades unionists need to discuss, back and act on.

barbara.harriss-white@qeh.ox.ac.uk for the CACC/TU Conference on Climate Change and Jobs, Camden, March 13th 2010

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