Why addressing climate change requires new power systems

New Economic Foundation’s Chaitanya Kumar leads work on the think tank’s Green New Deal, just transition and other environmental programmes. Here he talks about the role of incumbents and the vital role of fairness in addressing climate change.

The views expressed in this viewpoint are those of Chaitanya Kumar, not Sustainability First 

We have long known about the challenges of climate change and the specific need to adopt clean, renewable energy. Despite this, action has been painfully slow and resistance considerable. The question is why? How can we adapt to this crisis and make the necessary changes? Moreover, what opportunities are there?

Kumar started by explaining that at NEF, challenging the power system and moving away from the current economic model is integral to the change needed, and at the heart of NEF’s philosophy “There are two reasons we consistently go back to” he explained, speaking online from Margate. 

“Firstly is the political economy of energy, we need to understand the role of incumbency. Change is slow because of the power incumbents hold.” Reluctance to change is due in part because those in power have their own interests, he said. In order to address climate change we need to address who has power.

“This wasn’t such an acceptable argument a few years ago” he says. But the exposé that oil firms including BP, Shell [and Exxon], internally knew a lot about climate change (and had in fact commissioned their own internal research on the topic) but refused to do anything because it was “a threat to their business model” has added currency to this view. We saw the exposure of what these firms knew, (but denied). Because it wasn’t in their interest to do so.

Secondly, we have the economic system, and what he describes as the “endless pursuit of economic growth at all costs without weighing trade-offs. Even if you understand trade-offs, failing to think about the ‘other side of the ledger’ - all those who have not benefitted as much or have suffered while richer nations, individuals, and businesses have benefitted, is important”.He recognises that as someone who has come from India, “it would be folly to say all economic growth is a bad thing. But how can we mitigate those impacts? We need significant change and cannot rely on them [happening].”

The term ‘fair transition’ is bandied around says Kumar, but “what does it mean?”. How can we move faster than where we are now? “We need to really think about the balance of power. Technology, while important is not going to answer all our needs”, he posits. “It isn’t going to be a route to salvation and we cannot put all our eggs in the tech basket”. “So we need to change where power lies and we need to change the economic system. But we also need behaviour change, he adds. And crucially we need a deeper understanding of the situation we are in.” And this comes down partly to framing: “Climate change is a predicament not just a technological problem. We need a broader perspective.”

Holistic thinking

“The thing that keeps NEF busy and the thing that I fear, is the new hegemony of carbon, that we must cut [carbon] at all costs. But the entire notion of a fair transition is just as important”. These issues play out – we see environmental groups calling for heat pumps, alongside energy reduction, and insulation. But the risk is that we [focus on] carbon or climate change.” 

What is needed he counters, is systemic thinking. “We need to think of comfort, health, the wider picture.” In other words, it is not just about numbers but about “how life is experienced. Part of that is jobs, skills, local economic development”. We need a “dedicated industrial strategy”, not what we have now. “The USA inflation reduction act, which has given tax credits to the US economy, is causing a flight of capital from Europe to USA. This has revealed how fragile geopolitics are. It has also shown the huge power of the state, in this case the [United] States, which can wield where money is spent.”

“While there is a temptation to always consider the least cost approach [to change] we need to weigh up long term costs and specifically the huge cost of inaction, he says. Lots of costs could be redistributed”. He warns that we should not be (just) picking winners, in terms of companies [because this again would be exclusive]. 
There is an emphasis on what he calls “high liberalisation, the state saying ‘these are things we will bet on’, as part of an industrial strategy”. “But this shows a lack of understanding of the predicament. We had the classic example of MP Grant Shapps, saying we could have our cake and eat it guilt-free with ideas such as “sustainable aviation.” People have convinced themselves that we have a bunch of solutions, but this a way to disengage. “There is an arrogance that tech will get us there, [just as the industrial Revolution got us to where we are today].”Despite everything I have said about technology, and despite public protests and ongoing individual concerns about paying bills, the role of individuals is as important and useful as collective action. There is “also immense power in individual agency, sparked by behaviour change. It is also a strong antidote to the occasional defeatist and fatalist tone that some experts assume when it comes to talking about climate change”. 

Basic services

A question is: “how to break down the current system if it [stems from] the same place and set of principles that promoted the fossil fuel system? The acceleration [of change] is inextricably linked to changes in the power system.” For example urban planners can identify challenges. It is not all about electrification. The automobile association, the SSMT for example, holds a lot of power.”

“Many people I know are running to be MPs and all are very concerned and work on climate change. We will see a crop of new leaders, with a different approach”. How much will they be able to challenge incumbents is less clear. “We need a shift from the current situation, where we are in a crisis economy. There is inertia from the day-to-day politics, factional politics, impacts of Brexit etc.”

 In order to achieve a ‘fair transition’, NEF is focusing on three projects: 

  1. How to distribute the costs of net zero fairly, and a universal basic energy allowance 
  2. Giving a fair deal to workers in Yorkshire/Humberside region, a traditionally carbon intensive region
  3. How to develop and launch a national, joined up approach to retrofitting homes to make them efficient

The idea of a universal basic energy allowance, he explains, is that if the most vulnerable have access to energy as a basic service, they will be able to participate in society more fully, which overall is a benefit and cheaper than any alternative. We have seen this notion apply to the NHS and most recently to child care where the government is gradually coming around to the idea of providing it universally. There is no reason why such a principle cannot apply to energy. Once again, this ties in with the notion that this clean energy transition that we must inevitably make to address climate change, must be fair.

Ultimately, Kumar argues that addressing climate change or clean energy cannot be done alone by climate organisations. To achieve real change, we also need to think of “economies of scale” in the supply chain, he argues. Councils, community groups, and suppliers all need involvement to ensure “delivery [of clean energy] is beneficial to local economies”.

“Tackling climate change and the current inertia we find ourselves in will require an all-hands-on-deck approach from an individual to a community and also at a nation state level. The prize of a healthy, habitable planet should be won.”