Policy Research in Macroeconomics

COP26: system change to sustain life on earth

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The UN’s conference takes place in November 2021and will be led by the British government. It is apparently committed to “uniting the world to tackle climate change”.

It needs to achieve far more. To tackle climate change and protect the ecosystem that sustains life on earth, we need to do more than just bring down emissions, and reimagine the economy.  We must transform the current globalised financial system. Why? Because the spigot of (largely) deregulated global credit fuels global economic expansion, rent-seeking and the constant impetus to capital accumulation by the already-rich. Production and consumption gorges in turn on fossil-fuel extraction, accelerating the growth of greenhouse gas emissions.

It is not rocket science.

The system has been designed and is maintained to prioritise the interests of the global 1% –  wealthy rentiers (‘masters of the universe’) –  over and above the interests of society (the rest of us) and the ecosystem.

Don’t be fooled. That is its intention and design.

If we are to save the planet and society, COP26 must be about first transforming this system, and subordinating the finance sector to the interests of the ecosystem.

Thanks to relentless campaigning efforts, we can now be confident the voices of David Attenborough, Greta Thunberg and other environmentalists will be heard at COP26. There will be informed debate on both the physics of climate breakdown and biodiversity collapse led by scientists and activists. Climate deniers will find their voice too.

But there will be few voices calling for the global economic transformation needed “to tackle climate change.”

That is why I am adding my voice. Will you add yours?

The British figures leading COP26 are deeply enmeshed in, and committed to, the existing globalised system of rentier capitalism.  

The grandiosely-named President of COP26 – Alok Sharma – was, before his election to Parliament, a corporate finance advisor to clients in the corporate and private-equity sector. Wikipedia tells us he advised his clients on crossborder mergers and acquisitions, listing and restructurings.

After the election of US President Joe Biden, Boris Johnson hastily upgraded Sharma to a full-time role at COP26. Before that, the UN’s Conference was not a priority – just one of his responsibilities as Secretary of State for Business, Energy and Industrial Strategy (BEIS).

The other prominent figure at COP26 is ex-Bank of England governor, Mark Carney. According to the COP26 website Boris Johnson introduced the governor with these words:  

“Mr Carney will help the UK Government to mobilise ambitious action from across the financial system ahead of the UK summit in November.”

In other words, Mr Carney is the British government’s envoy to Wall St and the City of London.

In the last of a recent series of prestigious Reith lectures broadcast by the BBC, Carney conceded this to Greta Thunberg:

The power of (her) message is how she drives home both the remorseless logic of climate physics and the fundamental unfairness of the climate crisis. And like many, I’m persuaded by the force of her argument and her demands for inter-generational justice.

But, he said…

We do diverge… on how to solve this immense problem. As these lectures have argued, the market is not the answer to everything, but it can play a critical role in solving many of humanity’s greatest challenges.

He went further “…we won’t devise all the necessary solutions or implement them with sufficient speed without market forces.”   (Emphasis added).

To put this in plain language: both the British government and its “key adviser” for COP26 are putting the market in globalised finance at the heart of COP26.

Unless environmentalists like Greta Thunberg are alert to this danger, we can be sure that while there’s a feint chance the world may be united, climate change will not be tackled at COP26.

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