The Green Transition: From Port Talbot to Davos
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday from the Spotlight on Policy team. As ever, you can find our policy coverage on the New Statesman website here.
News in from the “just transition”: 3,000 steel workers in Port Talbot, South Wales, are to be made redundant. Mumbai-HQ’d Tata Steel rejected the overtures of trade unions to keep one of two coal-powered blast furnaces in use as the company moves to an electric arc furnace, a new, greener method of steel-making (helped by a £500m government subsidy).
This episode highlights the trade-offs every government will face when orienting entire economies, and particularly heavy industry, away from a two-century-long reliance on fossil fuels. Labour promises that green investments will create “a million green jobs in ten years”. Stephen Kinnock, the shadow immigration minister who represents Port Talbot, said that Tata Steel’s plans leave “Britain more dependent on imported steel from countries whose governments won't always have Britain's best interests at heart.”
Rhetorically, at least, Labour is committed to maintaining and even rebuilding domestic manufacturing and supply chains. The party’s net zero-themed mission implies a renaissance of high-skilled jobs and a green industrial revolution. All the talk will seem fatuous to those threatened with redundancy today, however. On the £28bn Green Prosperity Plan, Sharon Graham, Unite’s general secretary told The Green Transition towards the end of last year: “[I’ve seen] absolutely nothing - zilch”.
Long-time readers will remember that the GMB’s Gary Smith has said that “we’ve cut carbon emissions by decimating working-class communities”. GMB and Unite are two of the biggest Labour donors. These issues will not disappear if Labour enters No 10.
But first, analysis of goings-on in Switzerland this week, where the global elite of business and politics are hobnobbing at a ski resort for the World Economic Forum (WEF). On the agenda: not much, besides the future of capitalism and humanity.
Plus: We’ve also got an exclusive from the Carbon Trust.
Thank you for reading,
Davos-tating omission?
The World Economic Forum (WEF) in the Swiss ski resort of Davos always attracts attention, whether from the conspiratorially minded who see nefarious schemes in this annual meeting of the rich and powerful, or from those watching for signals on global trends.
Given the urgency of the climate crisis, you’d think global heating would be at the top of the agenda. In previous years it has been. But 2024’s get-together is more focused on artificial intelligence, the Red Sea crisis, and, for some reason, cryptocurrency.
The controversial (and carbon-heavy) blockchain technology is enjoying what’s been called a “Lazarus Year”, (or in the crypto-bro parlance, “Number Go Up! [rocket emoji]”). At Davos, the shadow chancellor, Rachel Reeves, even found time to pose for photos with crypto moguls. Reeves’s positive approach at Davos stands in contrast to some of her predecessors: in 2018, John McDonnell stopped by to tell attendees that they were “held in contempt”.
The fact that net zero seems off the agenda, and so soon after Cop28 in Dubai, did not go unnoticed by Brazil’s environment minister Marina Silva, who told Politico that “there needs to be more action, to build on the work of Cop28… Companies and governments need to do more.”
The omission seems all the more glaring given that the WEF has previously been seen as an originator of “green capitalism”. During the pandemic, Klaus Schwab, the WEF’s founder, said it was time to “move on from neoliberalism” and what he called “free market fundamentalism”, to confront the threat of climate change. At the time, this initiative for post-Covid recovery, labelled the “Great Reset”, attracted the ire of very online populists, who interpreted it as a move towards totalitarian government, adding to the long-standing charges that conspiracy theorists lay against the WEF.
The reality, of course, was more prosaic. Schwab, a mechanical engineer and business professor, originally established the WEF as a conference for European captains of industry, to introduce them to American-style management techniques. In the 1970s, heads of government thought it might be worth their while to attend too, in order to network with private sector figures. The conference’s remit expanded to covering the social and political issues of the day.
The move away from climate change discussions at Davos this year could be significant. Donald Trump, fresh from his Iowa caucus victory, leads against Joe Biden in virtually every US presidential poll, threatening the latter’s environmental agenda. Corporations have gone strangely quiet on their climate commitments after a flurry of green statements and policies in recent years. The UK is extending North Sea drilling, and the opposition is backtracking on net zero promises. Davos is only worth as much as the sum of its parts: if politicians and business are going cool on global heating, then the WEF will, too.
Exclusive: Carbon Trust podcast on the circular economy
The circular economy is a term one often hears in the discussion on net zero. Reusing and recycling will likely be essential to reducing carbon emissions. The problem is that the incentives to do this simply aren’t there.
So, what are the building blocks of a circular economy? And what needs to change to encourage more business to take heed of circularity? The latest episode of the Carbon Trust’s podcast, Net Zero: What’s innovation got to do with it?, which was shared exclusively with Spotlight, tackles this very issue. The episode features Andrew Morlet, the chief executive of the Ellen MacArthur Foundation, an organisation focused on the circular economy.
“You can’t have companies who are investing in very significant transformations being penalised because they are not able to match the economics of the extractors,” Morlet says.
He explains there are five universal policy goals which can help to “level the playing field” and allow those already using circular methods to “move further and faster”.
To find out what those five policies are, listen here.
In Brief
Cooling off on global heating? Data journalist at Energy Monitor Nick Ferris, has an exclusive about how, after a flurry of corporate climate statements and green pledges in the past couple of years, even climate-conscious companies have gone quiet on climate change: from green-washing to “green-hushing”, anyone?
Labouring under the delusion: New Statesman political correspondent, Freddie Hayward, has this excellent write-up of the world’s slowest U-turn: you guessed it, it’s Labour’s £28bn pledge £20bn “ambition” for new capital spending on climate.
Greening the Greenback: The Green Transition is late to the party on this long-read from Common Wealth research director, Adrienne Buller. She asks if, amid all the noise and hot air on green industrial policy, green financing, and the rhetoric on net zero, a green capitalism is even possible (the clue to her conclusion might be in the headline).
See you next week.
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Thank you for reading.
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