Climate Action

Our economic model is broken. So how can we fix it?

Children play beneath power lines in Khayelitsha township, near Cape Town November 15, 2005.

"There are no jobs on a dead planet," says Sharan Burrow. Image: REUTERS/Mike Hutchings

Sharan Burrow
Visiting Professor in Practice, Grantham Research Institute on Climate Change and the Environment
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Sustainable Development

2015 marked a turning point in global ambitions. World leaders took two major decisions with the Sustainable Development Goals (now called Agenda 30) and the Paris Agreement on climate. Together these chart a course for a zero-poverty, zero-carbon world.

However, the systems change required is massive - an industrial transformation that must be faster and deeper than at any time in our history.

The New Climate Economy's flagship report Better Growth: Better Climate showed that at the very least carbon neutrality is achievable with the technologies we have right now, but the next 15 years is critical. Together, governments and businesses can drive economic growth and development and achieve as much as 96% of the greenhouse gas emissions reductions needed by 2030 to keep global warming under 2°C, according to the Global Commission on the Economy and Climate. However, in a race against time, when many nations have barely left the starting blocks and many others are not even limbering up, the winning post is tragically not in sight.

A view of the Kuala Lumpur city centre covered by haze in Kuala Lumpur March 3, 2014. Thick haze blanketing parts of Indonesia's Riau province continued to ground helicopters and obstruct water bombing efforts, while Malaysia saw a return to hazy conditions on Sunday.
Image: REUTERS/Samsul Said

And for workers and their families historic levels of unemployment, inequality and precarious work is their reality with one in two working families hit by loss of jobs or reduction of working hours, is it any wonder our people have lost trust in governments?

And with 40% of the global labour force trapped in the desperation of the informal economy without rights, minimum wages or social protection and around 30 million of our brothers and sisters in modern slavery, it is an economic reality that a global wages slump means a global slump in demand.

Rising inequality is now recognized as a global risk, austerity has failed and as the Prime Minister of Sweden, Stefan Lofven, says we need a new global deal.

2016 opened with three reports that depict a broken economic model.

Oxfam exposed the fact that 1% of the world population now own equivalent wealth to the other 99%.

The ITUC exposed the fact that 50 of our largest multinationals have a hidden workforce of 94%, the majority of whom work in intolerable conditions for poverty wages.

And Amnesty International depicted the depravity of the abuse of children in the supply chains of the extractive industry from the Congo.

This is inequality by design. Wealth is being generated off the back of oppression and abuse.

To realize Agenda 30, as the Irish saying goes 'you wouldn't start from here'.

 A general view of the low-income neighborhood known as Boca la Caja next to the business district in Panama City September 17, 2013.
Image: REUTERS/Carlos Jasso

For a world where 90% of disasters are climate related and contributing to even greater poverty and inequality the lack of urgency in public discourse, yet alone action, is frightening. The collaboration within and across nations to share technology, the reduction of fossil fuel subsidies, a realistic carbon price and the consequent funding to invest in enabling green infrastructure and just transition measures is minimal. Outside of a few national exceptions; Germany with its national energy plan, France with a legislative frame, USA with EPA regulations now under legal challenge and Senegal unique with National Multi-stakeholder Committee on climate - the national social dialogue is minimal.

For the unions it is simple. There are no jobs on a dead planet. This is much more than a slogan for us. We are already witnessing the loss of lives and livelihoods.

Climate impacts hit working people first and with extreme weather events, changing seasons and rising sea levels, whole communities stand on the frontlines.

The challenge of industrial transformation is both an imperative and an opportunity.

We know there are jobs in action on climate, millions of jobs. With infrastructure investment projected to be $90 trillion in the next 15 years to 2030. This means jobs.

There are more jobs in construction, manufacturing, transport and services as we green every industry and build the mega cities that will accommodate population growth. There are more jobs in agriculture and reforestation.

Already the U.S. solar industry is creating jobs twenty times faster than the overall economy while the world's largest renewable energy job market is in China, with 3.4 million working in the industry. And in Germany, 370,000 people are employed in renewable energy, the largest number in Europe.

Wind turbines are seen in front of a coal power plant of German utility RWE Power near the western town of Neurath February 28, 2014. German utility RWE is set to report a net loss of almost 3 billion euros ($4 billion), the digital edition of German newspaper Handelsblatt said on Thursday, citing supervisory board sources.
Image: REUTERS/Ina Fassbender

Right here in London, Candidates in the race to be the next London Mayor are being asked to pledge that London, a city of nearly 9 million people, will be a 100% renewable city, run on clean energy by 2050 with investment in jobs in retrofitting offices, homes and mass transit.

And Chile is about to open the largest solar plant in Latin America, Uruguay is introducing electric taxis. Costa Rica is ahead of the game - when you take a hot shower in Costa Rica, you don't use fossil fuels. And this is also where entrepreneurs are exploring generating power from pineapples and creating a circular pineapple economy. These are good examples of projects and activism but what we need is comprehensive national and industry planning and instead the US takes India to the WTO trade disputes panel for supporting their solar industry and - worse - the tribunal agrees with the U.S. - this is an example of short term corporate interests, not common interest in the planet we all share.

For unions, our members are involved in every aspect of this challenge - the activists campaigning for action on climate of whom we are proud, the workers in renewable energy who we are organizing and the workers in fossil fuel production and energy distribution. These workers have brought us the prosperity of today and we demand they be treated with respect and that the transition be a just transition.

A just transition requires;

  • Investment in jobs - decent work opportunities in sectors which reduce emissions and help communities adapt to climate change;
  • Respect for the contribution that workers in fossil-fuel industries have made to today’s prosperity and provide them with income support, retraining and redeployment opportunities, as well as secure pensions for older workers;
  • The guarantee of social protection and human rights;
  • Support for community renewal to gain the hope and trust of regions and townships at the forefront of the energy transition, industrial transformation or climate impacts;
  • Enabling innovation and technology sharing to drive a rapid transformation of energy and manufacturing companies along with all other economic sectors and the involvement of workers and communities in the sectoral plans for transforming megacities;
  • Capacity to formalise jobs associated with rescue, restoring communities and building resilience to climate disasters;
  • And be based on social dialogue with all relevant parties, collective bargaining with workers and their unions for workplace change, resource productivity and skills development with the monitoring of agreements which are public and legally enforceable.
A man walks inside a factory at Keihin industrial zone in Kawasaki, south of Tokyo June 28, 2013. Industrial output rose 2.0 percent in May from April and the outlook is for slight net growth in coming months, data from the Ministry of Economy, Trade and Industry showed.
Image: REUTERS/Yuya Shino

Agenda 30, supplemented by the Paris Agreement, charts a course for a socially just and environmentally sustainable world but the public debate here is the isolationist flag of Brexit.

In Europe it is 'fortress Europe', the xenophobia and the unacceptable plan that the EU has been discussing with Turkey. We demand safe haven and the right to work with equal treatment for all workers.

Caring is what makes us human and with a refugee crisis that is greater than at any time since World War II we turn our backs on people fleeing conflict or economic desperation. And we haven't seen the fist wave of climate refugees yet.

So stopping the bombs, seeing dictators off the stage - yes. But seeing desperate people as less than human, as requiring military solutions, walls or paper billions to keep them out will lead to the festering of greater unrest.

The environment, stabilizing the climate, needs urgent attention from all of us.

Reducing inequality and stabilizing the global economy requires us to raise wages, restore social protection and eliminate inequality for and barriers to women's participation in the labour market but to realise both inclusive growth and a stable climate integrated systems change is urgent.

The real potential for progress lies in the momentum being generated by increasing numbers of business leaders and investors, union and civil society. Over 1,000 major companies have signaled their support for carbon pricing. Policymakers have no excuse not to move forward on adopting a realistic price and a percentage could be directed to a 'just transition' fund to build trust in vulnerable communities.

Indeed over 450 businesses already use an internal carbon price to guide investment decisions, including Shell, BP, Exxon-Mobil, and ConocoPhillips. The price is typically around $40/t CO2 for oil companies. But some of the same companies still lobby against such measures and major investors are still blind to both the risk of stranded assets and their responsibility to demand transition plans for decarbonisation and jobs from all companies. Tragically to date the speed and the global reach of renewable energy, industrial transformation and greenhouse gas emissions, with a shift to a circular economy that gives us a fighting chance to stay within planetary boundaries, is still lagging.

Image: Reuters

The global surface temperatures across land and ocean in February were 1.35°C warmer than the average temperature for the month, from the baseline period of 1951-1980.

The global record was set just one month earlier, with January already beating the average for that month by 1.15°C above the average for the baseline period.

If we don't pick up the pace, we could lose the battle against poverty and inequality and face increased social division that is already eating at the heart of stable democracies and our communities. We could lose the fight against climate change with even more horrendous consequences for the human species.

Economic and environmental sustainability is without any doubt now a question of what future we want for humanity.

This text is taken from a speech given by Sharan Burrow in London on 15 March 2016. It's published here as part of our series, Beyond GDP.

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