Way back in 1992, political consultant James Carville, one of president Bill Clinton’s advisers, eloquently hit the nail on its head when coining the iconic phrase “it’s the economy, stupid!”, in testimony of the way that the pursuit of economic growth has driven politics since World War II. But with climate change increasingly shaping economic outcomes, we may soon be revising the mantra into “it’s the climate, stupid!”
The concept that climate changes pervades every aspect of human society has been creeping up behind the scenes over the years. Small island nation leaders, especially those from Pacific Ocean ones, have been exhorting the international community for years to turn their gaze to the dramatic way that climate change has uprooted their lives, from healthcare to schooling.
We had been warned way before that too. For instance, Simon Kuznets, the Nobel Prize-winning brain behind the GDP concept, had warned in the 1960s that “distinctions must be kept in mind between quantity and quality of growth, between its costs and returns”.
We finally seem to have crossed the Rubicon, since government officials, corporate bosses and civil society leaders in the US, the EU and even, up to a certain extent, in China, are waking up to the simple concept which has come of age: climate is everything. This momentous juncture has been acknowledged by former US vice-president Al Gore, who was bestowed with the Nobel Peace Prize in 2007 for his climate activism – “We are seeing the beginning of a new era”.
Enter the era of ‘climatisation’, a neologism which essentially stands for the process by which climate change will transform society and which is expected to garner momentum in the years to come. Climatisation is already a reality in the EU, through the multi-billion pandemic-recovery plan known as the Green Deal, which seeks to make the European continent the first carbon-neutral one by 2050.
Given its cross-cutting ambition, the Green Deal has been dubbed “the climate union” by Jeppe Kofod, Denmark’s foreign minister, as well as the “new economy of the 21st century” by Maros Sevcovic, but also in the US, where President Joe Biden’s $2.65 trillion economic recovery plan is suffused in climate change policies. For instance, a $400 billion budget has been allocated for clean-energy tax credits for households and businesses, $100 billion for the advancement of clean energy on the grid and $35 billion for climate-related research and development.
Even apparently ‘climate-unrelated’ components of the recovery plan, such as housing and broadband, roads and bridges, have an implicit climate angle to them. For instance, a pledge has been made to build transportation infrastructure with climate risk resilience in mind, as well as energy-efficient new homes. The consolidation of broadband will favour low-carbon industries, such as those which rely mostly on office-based or even remote work.
The Green Deal has been dubbed the ‘new economy of the 21st century’- Alan Deidun
The renewed priority afforded to climate-related issues within the US Capitol is evident through the soundbites emerging from leading exponents of the US administration. For instance, Gina McCarthy, US president Joe Biden’s national climate adviser, placed the need to address climate change with the one to address the affordable housing shortage in the same breath. Her office is essentially tasked with the mammoth objective of infusing climate considerations into every aspect of the new administration’s modus operandi, looking into, for example, the ways climate change is a hazard to national security and the risk it poses to the financial system.
The introduction of climate-oriented policies can be even more subtle. For instance, financial regulators in the US have begun peddling new rules to require companies to disclose climate risk. Even more bold is the move by the new US administration in formulating new calculations which represent the economic cost of each ton of greenhouse-gas emissions so as to inform government spending, requiring the rejection of some programmes in which the climate costs outweigh economic benefits.
This much-needed shift in mindset has been long in coming. For instance, human civilisation’s reliance on agriculture hinges on the establishment of a stable climate regime, which became a reality soon after the end of the last Glacial Maximum (Ice Age) 10-12,000 years ago.
Security of food supply triggered an exponential increase in the global human population, although our GDP-driven economic system fails to account for the role a stable climate played in creating it in the first place. So much so that current nations’ emission-cutting commitments would only slash one per cent of global emissions by 2030, as highlighted in a UN report published last February.
Where does the current pandemic feature in all this? At the onset of the pandemic, climate concerns took the back seat as public health concerns understandably trumped. However, the realisation that ignoring science and the world’s inter-connectedness would place human societies in jeopardy slowly creeped in, with the need to invest in new technologies being seen as an essential component of any economic recovery to the pandemic.
“Climate change suddenly has become a vehicle of green recovery,” Achim Steiner, UNDP (United Nations Development Programme) head, said.
Way back in 2006, Nicholas Stern, the World Bank’s chief economist and lead author of the seminal Stern Review, commissioned by the UK, prophesised that “climate action is the growth story of the 21st century”. This has well and truly turned out to be an incredible fragment of audacious foresight!
This article is an abridged adaptation of the Force of Nature article penned by Justin Worland in Time magazine.