Queen’s Conference outlines alternative approach to climate action

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The Queen’s Global Summer — an interdisciplinary summer program at Queen’s University — held its culminating lecture in the Enduring Freedom Lecture Series on Thursday afternoon.

The program hosted Daniela Gabor, Professor of Economics and Macro-Finance at the University of the West of England, Bristol, who presented the progressive and financialised approach of states to tackle the climate crisis.

With the need for immediate climate action increasingly clear in the face of heat waves, devastating fires, increasing floods, Drought and rapidly melting Arctic, Gabor says the government’s climate policy aims to make climate investments less risky rather than tackling the problem directly.

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She describes this approach as “green incrementalism,” in which governments at all levels focus on leveraging private investment through deregulation but do not involve public investment in direct solutions to problems.

“We live in a time of green incrementalism, which is an understanding that we can see a low-carbon transition without radical institutional change,” she explained during her lecture.

As it stands, Gabor argues that climate policy is focused on “de-risking” climate-friendly businesses.

“The idea is that markets fail to generate the kind of risk-return profile for green projects that would attract private investment,” she explained. “Either these risks are too high or the returns are too low, so financial institutions have no incentive to invest in a new green hydrogen project or green infrastructure in India. These projects are neither bankable nor investable, and the logic of the risk reduction state is to say: “Yes, there is a glut of capital that wants to find new housing, that wants to find investable projects”. This is not the case, due to the risk-reward profile, so we will intervene to either reduce risk or increase returns and thereby create more attractive investment opportunities.

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This “de-risking” approach is at the heart of climate policy through programs such as carbon pricing, ESG (Environment Social Governance) policies, subsidizing climate-friendly investments and regulating certain investments.

For Gabor, the problem with this approach is that it leaves climate action in the hands of private companies – institutions that are accountable to shareholders, not citizens.

“In high-income countries, the green state of de-risking devolves the pace and nature of decarbonization to private (corporations)… without disciplining industries and financial institutions,” she said.

Within this policy framework, Gabor emphasizes that continued environmental destruction, however frowned upon, is still permitted.

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“Risk reduction, while having green ambitions, condones and adapts to the continued destruction of the planet,” she added.

Effective climate policy, she argues, would be led by governments, which are accountable to citizens, not investors. This would include coordination of public funds to invest in non-market solutions to ensure that effective policies are implemented to address and mitigate the causes and consequences of the climate crisis, whether these policies or approaches are cost effective or not. Such an approach would also involve the discipline of carbon-intensive industries to ensure that private companies do not derail meaningful climate action.

Gabor paints a critical picture of current politics, and his thoughtful and comprehensive argument shows an alternative path to climate action.

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Angela C. Hale