The Green Transition: The state of nature
Weekly analysis of the shift towards a new economy.
Dear Readers,
We’ve got an early edition of the Green Transition this week, so happy Thursday from the Spotlight on Policy team. As ever, you can find our must-read policy coverage on our section of the New Statesman site.
Megan Kenyon has analysis of Ed Miliband's speech from earlier in the week below. And it's been a week of many speeches: not only did the shadow energy secretary make his first major outing since Labour’s £28bn pledge was scaled down, but the shadow chancellor, Rachel Reeves, delivered the prestigious Mais lecture in London.
Despite predictable criticism from sections of the Very Online Left, Reeves' speech was not a paean to Thatcherism and globalised free markets. In fact she come out in favour of more robust state intervention in markets, the return of industrial strategy, rebuilding manufacturing and domestic supply chains, and a kind of corporatist approach to labour relations. So what does that mean for the green transition?
Reeves claimed scaling back the Green Prosperity Plan was about striking “the necessary balance between the imperatives of the energy transition and the real economic constraints we face”. But in her ode to Bidenomics there was a crucial element missing: proper fiscal commitment.
“Public investment is one important lever available to governments,” Reeves said, “and it must be used judiciously.” The green-tinged National Wealth Fund plans, and Great British Energy, would function by unlocking private investment, she assured attendees. Reforms around pension funds would also unleash a pool of potential cash
Good luck forcing big pension fund investors to plough money into less favourable markets, though. It’s also not great for savers if their retirement pots are being funnelled into domestic assets with lower returns.
President Biden's success in attracting hundreds of billions of dollars in private capital for green manufacturing and energy rests on hundreds of billions in “de-risking” subsidies and guarantees by the US Treasury. If a future chancellor of the Exchequer isn't willing to match rhetoric with financial heft, there’s no guarantee a nervous private sector will agree to invest at a time of heightened geopolitical tensions and economic uncertainty.
If Reeves wants to emulate the global shift towards a new “productivist” model, she'll have to do more than name-check its proponents at the top of the economics profession, or recite its latest buzzwords. Let's see how the shadow chancellor’s big picture is translated into the detail of the Labour manifesto.
It’s in Ed’s nature
Ed Miliband is setting the scene. Speaking at an event hosted by the Green Alliance to launch the latest iteration of the think tank’s Net Zero Policy Tracker this week, the shadow energy secretary asked listeners to “imagine visiting 2024 from, say, 2014”. A lot has changed over the past ten years, he pointed out, in terms of the climate crisis.
Miliband is right. For starters, the Labour Party – which he led until 2015 – looks to be on the cusp of forming the next government. Global temperatures are rising; February 2024 was the warmest February on record. And renewable energy – solar and wind – is a lot cheaper than it was a decade ago. But despite some positives in the changing landscape of sustainability, the urgency of addressing the climate crisis remains.
It’s clear Labour is aware of this, even if the back-and-forth over its headline £28bn green investment pledge left some room for confusion. As that episode showed, however, the party is still grappling with squaring the shadow cabinet’s dogged determination to get elected with the economic situation Labour will inherit if it wins the election.
Indeed, Miliband summed this up himself: “Understandably, there has been much debate following the scaling back of our £28bn commitment, but people should be in no doubt about the ambition of our agenda.”
More interestingly, Miliband also alluded to work he is currently doing with the shadow environment secretary, Steve Reed, on how nature restoration might fit into the party’s Green Prosperity Plan. “There can be no solution to the climate crisis without action on nature,” Miliband said, “the threat to biodiversity is profound.”
One in six of the UK’s species are threatened by extinction, and across the country native species have declined by almost 20 per cent since 1970, according to last year’s State of Nature report. Restoring nature-rich habitats could improve the UK’s ability to meet its carbon reduction targets in areas such as agriculture.
Analysts at Green Alliance crunched the numbers last year and suggested that Labour could use £1bn of its £28bn pledge to invest in nature restoration, which would have an equally beneficial effect on climate action. The think tank suggested this money could be used for creation of woodlands, wetlands and other nature-rich habitats between 2024 and 2030.
But where would Labour find this funding now the pledge itself has been drastically cut back? It’s likely the party will have to rely on attracting private finance. But nature restoration has yet to be explicitly mentioned as part of the Green Prosperity Plan.
It could be very beneficial for Labour to carve out a space here. As Spotlight reported last year, robust policies on biodiversity could prove useful in persuading all-important swing voters.
Still, while Miliband was keen to talk about the work he is doing with Reed around this issue, his speech lacked detail of what that work will actually entail. Instead, he told attendees: “We will have more to say on nature in our manifesto.”
And in case anyone doubted his green credentials, the shadow secretary assured attendees that yes, he is installing a heat pump.
In Brief
Adaptation, Adaptation, Adaptation!: No, this isn’t the latest Labour slogan, but perhaps it should be? Megan Kenyon has this write-up of the Climate Change Committee’s report into how well the UK is doing on adapting to a rapidly changing climate.
The Iron Lady… is Rusting: George Eaton and Phil Tinline analyse Rachel Reeves’ Mais lecture: what did it say about Labour’s model of political economy?
And the winner is… Last week, we announced the winner of the Progress Policy Prize, in partnership with TxP and Civic Future. The winning entry by Rian Whitton is all about zero-carbon firm power and economic growth, with inspiration from Iceland.
Making the most of a COP-portunity: With Cop29 ministerials taking place in Copenhagen this week, the former executive secretary of the UNFCCC, Christiana Figueres, is urging the host Azerbaijan to rally the globe behind the green transition.
In Brief
Adaptation, Adaptation, Adaptation!: No, this isn’t the latest Labour slogan, but perhaps it should be? Megan Kenyon has this write-up of the Climate Change Committee’s report into how well the UK is doing on adapting to a rapidly changing climate.
The Iron Lady… is Rusting: George Eaton and Phil Tinline analyse Reeves’ Mais lecture: what did it say about Labour’s model of political economy?
And the winner is… Last week, we announced the winner of the Progress Policy Prize, in partnership with TxP and Civic Future. The entry by winner, Rian Whitton, is all about zero-carbon firm power and economic growth, with inspiration from Iceland.
Making the most of a COp-portunity: With Cop29 ministerials taking place in Copenhagen this week, the former executive secretary of the UNFCCC, Christiana Figueres, urges the host Azerbaijan to rally the globe behind the green transition.
***For more on how our advertising services can support your organisation, please visit our page on Spotlight Marketing Solutions or contact us at client.solutions@newstatesman.co.uk***
The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
Thank you for reading.
Please send any news or comments to: jonathan.ball@newstatesman.co.uk