Four key takeaways from Mark Carney’s Reith lecture on climate change

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Mark Carney was optimistic about our ability to tackle climate change when he delivered his final Reith lecture today. In his speech, from Climate Crisis to Real Prosperity, he outlined what he thinks needs to happen to avoid catastrophic global heating. These are, in my view, the main points he made.

1. We need new laws

Climate change has come about because businesses were able to pollute the planet without incurring any cost. We can solve the climate crisis by correcting this market failure with some regulatory changes. Carney described some specific new rules that need to come into play, including:

  • A carbon price
  • Compulsory disclosure by companies and investors of both their exposure to climate risk and the extent to which they’re contributing to rising emissions
  • Giving shareholders power to control companies’ carbon footprints. He implied that shareholders should be able to veto plans to reduce emissions if not in line with net zero 2050 target
  • New standards to drive investment and innovation, including energy efficiency standards and standards for fuel

2. Grassroots social movements have a lot of heavy lifting to do.

New regulations come about through new laws enacted by politicians. But how can politicians be motivated to make these laws when they’re focused on getting re-elected in a few years, not on hitting a target many decades in the future? The answer, Carney suggested, is social movements. Their role, he believes, is to change what is politically, morally, and socially acceptable.

He quoted Greta Thunberg and referenced the Fridays for Future campaign, saying: “In a number of societies, demands for sustainability are approaching tipping points, giving newfound urgency to national commitments to net zero. This is reinforcing the hierarchy of values, with net zero at its apex. [This] is a prerequisite to solving the climate crisis.”

3. Everyone must be an activist.

Carney urged everyone to challenge their employer, their government and whoever looks after their money over their climate plans. He said: “if you work for a company, find out whether it has a plan to transition to net zero. If so, great, how can it be made better? And if it doesn’t have a plan, why not?

He himself adopted a classic activist tactic of moral shaming during the lecture, saying: “Companies knowingly on the path inconsistent with net zero have echoes of tech companies, paying all the taxes due, while using complex offshore tax shelters to avoid there being any tax due at all.”

4. We don’t have to change our lifestyles

Carney believes we can solve the climate crisis within the existing social-political-economic paradigm. He said: “Continued growth isn’t a fairy tale, it’s a necessity.” This runs counter to some increasingly influential voices that believe we need to rethink the whole system. He did give a nod to degrowth/post-growth views when he said we need a new way to measure progress other than GDP, which was “devised a century ago when the earth seemed immortal”.

Fundamentally though, he sees humanity going on doing what it’s doing in terms of consumption, flying, driving, etc. He believes we need technological innovation to deliver green versions of these activities. I’m not sure he’s backed up by the science on this. For example, the Climate Change Committee says that to achieve net zero, we need to reduce our consumption of beef, lamb and dairy by 20% – which is a pretty big lifestyle change. They reckon we need to reduce the vehicle miles we drive by a similar amount.

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