Submission for the Labour Green Industrial Revolution consultation.

I recently submitted some ideas to the consultation being undertaken by the Labour Party for a kind of "Green New Deal" for Britain. Unfortunately, my submission was lost due to a server error and I had to resubmit. It did allow me to revisit some of my ideas, and record them here.

Opportunities in the low carbon economy

Please describe any industries, sectors, or projects that you think are well suited to your region, city or town, that would help to reduce the UK’s greenhouse gas emissions.

Greenhouse Gas emissions are not limited to any one sector but are spread across all aspects of our society. From land use to transport, from construction to energy production. Each sector contributes a share.
Reducing any one sector to 0% net emissions would only return our emissions to start of the 21st century levels.

There are many ways that each sector can be addressed, and experts should be consulted on any possibility.

Just one example that springs to mind is the project being undertaken by the Canadian organization Unbuilders (https://unbuilders.com/)
Rather than demolishing old buildings and sending the rubble to landfill, this company is reusing the materials from old houses to make new ones.

A quote from their social media site claims:
"Job creation - 74,000 new jobs nationally; $1.7B added to the economy!! This is what the shift from demolition to deconstruction looks like in Canada. Focusing on our local region, you’re looking at roughly 13,300 new jobs and $300M added to the Lower Mainland economy!!"

The Labour manifesto already aims to build many new houses, as part of a drive to lower the cost of housing. Requiring that the production process implements the unbuilding method to make the best use of materials where possible could help to offset GHG production in this policy.

I don't know if any comparable businesses are operating in the UK, I couldn't find any mention of them. It might be necessary to help seed companies of this sort through government initiatives.

Experience with the low carbon economy

Can you describe any low carbon industries, sectors or projects that are already established in your region, city or town?

Although I am British, I've lived in the Republic of Korea for the last ten years.
I would say that one of the best examples of pro environment activities here is the household waste handling system, especially the way that food trash is dealt with.

In the UK, food waste is mixed directly with general waste, and goes to landfill where it decomposes and releases methane, a GHG which is more potent than CO2.

In Korea, food waste is separated before collection, with a well developed system for making sure that most organic waste stays out of general waste collection.

The organic waste can then be used to produce fertilizer, or incinerated, or used in bioreactors to generate electricity or whatever is deemed appropriate.

The key to doing this effectively is a system of pay-as-you-throw waste collection.

Trash that is to be recycled is collected freely, though it must be separated.
Food trash can be disposed of using special buckets or community bins on large apartment buildings. There is a small fee.
General waste for landfill has to be disposed of in special bags, which have a moderate fee. The less you send to the landfill, the less you pay.

Why is this system important?
Since the year 2000, recycling rates in the UK have increased nearly 400%. This wasn't due to any special public awareness campaign, or feelings of individual responsibility. It was almost all down to the institution of roadside collection of recycling in 2003. There was no change in recycling rates before or after that policy change.

Before that, anyone who wanted to recycle had to visit a recycling center, and lack of a car, or ability to transport bulky household waste meant that only a few people were prepared to do that.

Organizing waste collection from the doorstep is the most efficient way to proceed towards lower GHG emissions from trash. It can also work out cheaper, as people who have to pay for trash by volume tend to try and produce less of it. Here we could also talk about the possibility of shifting the cost of recycling to producers with an upfront recycling tax, to be reclaimed by consumers through a recycling dividend.

The point is, once this kind of organization is achieved, it opens the door to systematic solutions to our problems, instead of relying on individual initiative.

Risks from decarbonisation

Can you identify significant industries or sectors in your region, city or town that could be negatively impacted by policies to decarbonise the economy or other environmental policies?

The biggest economic risks from a green economy come from competing with other countries that refuse to institute change. Dogmatic adherence to "free" trade issues mean that things like carbon taxes are difficult to impose. There are changes that could be made to taxation as well as banking regulations, but as long as the UK is tied to requirements to abide by weak international standards, it's hard for those changes to be implemented without putting local businesses at a disadvantage to international companies.

One example could be the replacement of VAT with a carbon based consumption tax. Products or services which didn't adhere to best practices for reduced carbon production and distribution would be charged a higher rate of CAT (Carbon Added TAX). Over time, consumers would switch to low carbon alternatives, and companies would change their production processes to meet best practices.

One way to organize this on an international level would be to approach an organization like the ISO (International Organization for Standardization) to establish a set of best practices for low carbon operation. Companies from the UK or abroad which adhered to these standards would enjoy the lower rate of CAT.

Another option for reducing carbon output would be through the way that banks measure the risk of loans. At the moment, banks use Risk Weighted Assets to balance their books. Risky loans like Credit card debt can weigh heavily on a bank's spreadsheets, while "safe" loans like household mortgages are much easier to bear. Interest rates on different types of loans vary accordingly. A bank which focuses on credit cards can't loan as much as one that is dedicated to mortgages, but it uses higher interest rates to make up the difference.

Unfortunately this system takes little account of systematic risk (like that which led to the 2008 financial crisis). It also has no interest in modeling risk from climate change.

But what if GHG emissions were included as part of the risk weighting criteria? Loans to fossil fuel companies would be much riskier, and therefore more of a burden, requiring high interest rates. Loans for low carbon infrastructure, for example houses produced according to ISO standards for low carbon emissions, would be much less risky. The banks themselves would help to make the low carbon economy more profitable than a high carbon one.

These kind of structural changes would help to finally apply a price to things which in the past have been seen as externalities. The price of carbon would be baked in to the economy, right from the point of money creation. Production and consumption would be forced to account for the hidden price of climate change.

Personal Final thoughts.
Some people might feel that my suggestions don't go far enough, and they they are still rooted in neo-liberal capitalist structures which are, to be honest, the cause of the problem we face. However, there needs to be some first steps we can take to move towards a better way of living. Any kind of revolutionary change still looks a long way off, so unless we want to wait forever, it's important to think of small, practical changes which could be made right now, operating within the confines of our existing system.