Our campaign to fight climate catastrophe must focus on one thing above all others – possibly even to the exclusion of all others. We must push to make fossil fuels much more expensive and leave markets and businesses to drive the change to a more sustainable global economy.
I have reached this conclusion reluctantly, after 30 years of campaigning for more enlightened business practices. My belief that businesses can harness humanity’s deeper motivations and work collectively for the common good culminated in Riverford becoming employee owned in 2018.
I still long to live in a world which is not dominated by greed, mediated through markets; I hope others will follow our lead, choose more imaginative ownership structures, and work to benefit people and the planet as much as for profit. But the urgency of the climate crisis means that we must fight it in the world as we find it now. A world where greed and selfishness are deeply embedded in our institutions, culture, and governance.
I have spent my working life trying to demonstrate that farming and business can be both sustainable and fair, but progress is painfully, heart-wrenchingly slow. The fundamental, world-shaping truth is that businesses exist to extract profits for their shareholders. That is more or less enshrined in law, and no amount of Corporate Social Responsibility window-dressing is going to change it.
Despite spending my life railing against unregulated neo-liberal capitalism, I cannot dispute its extraordinary power to drive innovation and funnel resources towards solutions, as long as those solutions are profitable. It offers us the only realistic hope of addressing climate change in the time available.
Fossil fuels currently cause 89 per cent of global warming. Reducing their use as quickly and effectively as possible is all that matters in the urgent fight to prevent climate catastrophe. Only one thing will mobilise the action needed to achieve that: making fossil fuels much more expensive. That can be done either simply and directly, through taxation on their sale – or, with much more complexity, through a carbon tax.
The International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) estimate that the appropriate taxation of fossil fuels, at rates rising to the equivalent of $75 per tCO2e (tonnes of CO2 equivalent), would reduce global carbon emissions by at least 40 per cent by 2030. This is probably not enough to stay within 1.5 degrees of global warming, but it is much better than any other proposal.
Given that this is the view of the IMF and the OECD, and given that virtually all leading economists have called for fast and substantial taxing of fossil fuels or carbon, it is very hard to understand why the world is moving so painfully slowly from subsidising fossil fuels to taxing them.
Where fossil fuels are currently taxed, the global average stands at under £2 per tCO2e – at a time when carbon is trading at over £30 per tCO2e, and rising rapidly. I would argue for even higher rates of taxation than the IMF and OECD suggest. My personal experience at Riverford (when deciding whether to plant trees, electrify vehicles, compost flammable waste, and so on) has been that around £50 to £100 per tCO2e is the level at which many green investments, previously justified by ethics or marketing, suddenly become driven by hard-nosed economics, and likely to be adopted at scale.
My argument and plea is that all campaigning forces should unite behind this one urgent call to tax fossil fuels. Although campaigns around plastic, food waste, methane emissions from livestock, food miles, and so on are all very important, I am concerned that they are diverting attention from the one action that may yet avert disaster.
Campaigns which focus on individual people’s behaviours (mediated through markets) also risk encouraging the disturbingly prevalent myth that informed citizens making good buying choices can drive businesses to find the solutions we need. Nothing other than government-imposed taxation will bring about the necessary scale and speed of change.
I am staggered that any thinking person could suggest that the purchasing choices of conscientious individuals will be anything more than peripheral in solving our environmental problems; we are surrounded by the evidence of this. I have an uncomfortable feeling that an excessive belief in the power of consumers to drive change is being used as an excuse for systemic inaction.
Don’t let the noble actions of a committed minority of individuals and businesses be a fig leaf to cover our government’s inadequacy. We desperately need them to provide a framework that financially incentivises a drastic reduction in the burning of fossil fuels by the less committed.
Of course, fossil fuel interests will lobby furiously against this – and history tells us that our governments are pathetically susceptible to their influence. There will be cries that taxing fossil fuels is regressive, that it will impact the poor unfairly, that energy-intensive industries will be driven to less regulated countries.
So we must be prepared to respond, with plans to use the funds raised by the tax to support emerging green technology, and critically, to support those worst affected by the transition. This is thoughtfully addressed in the IMF report; read it online here. A large body of leading (mostly US-based) economists argue for a ‘fee and dividend’ policy, under which the entirety of the funds raised by a carbon tax would be distributed in a universal payment to ensure that the least wealthy 70 per cent of people are actually better off.
Business can be part of the solution to the climate crisis; indeed, it can be the biggest part. But only if we are honest about the purpose of business, and provide a clear, firm, and ethically justified taxation framework whereby the polluter pays. However obvious and well supported by mainstream economists this conclusion is, our governments will only resist the interests of the fossil fuel industry under unified, focused, and relentless pressure from the electorate for one single goal: make fossil fuels expensive.
P.S. Those who know me may be surprised by my line of argument. I have not previously been an advocate of market-based solutions to complex environmental and social problems. My core values remain unchanged, but a number of factors have led me to believe that we face a specific and urgent challenge which can only be addressed, in the time available, by working with the world as we find it; namely through market forces and the clear signal of taxation. This is what has changed my mind:
- Capitalism is brilliant at solving simple, clearly defined problems efficiently and fast, but very poor at addressing complexity. Few problems could be simpler than the need to burn less fossil fuel, or have a more straightforward market mechanism for achieving it than taxation.
- Riverford is not a repeatable example of how businesses can carve a path to sustainability in the absence of government action. We are unique and privileged in so many ways: we are employee owned, largely free of debt, and not beholden to impatient investors. Many of our customers have the financial freedom to make choices denied to some – and even more importantly, they are extraordinarily interested, educated, and supportive of our ethical choices. All these factors have enabled us to follow a path not open to most businesses.
- I have been very impressed by the pace of decarbonisation of the National Grid, using well-engineered contracts and competition to drive down the cost of renewable energy and grid balancing. The companies providing these solutions are typically concerned only by returns on capital, but have done more to address climate change than any values-driven business or individual.
- Reluctantly, we must acknowledge how resistant to making real lifestyle sacrifices even many relatively thoughtful people can be. Despite being disappointed by their inaction as individuals, I am confident that the same people would be happy to collectively support much stronger government action on climate change. People are far more likely to support and adhere to a system that all are obliged to follow, than to adopt these actions independently while those around them carry on as usual.
- The already inadequate pressure from individual people’s patterns of investment and consumption is further dissipated by misleading greenwash, making it almost impossible for concerned citizens and investors to make informed choices even when they do have sufficient willpower.
- Likewise, values-driven investment will have little impact. I suggest reading Robert Armstrong’s commentary in the Financial Times on the words of Tariq Fancy (once a fan, now a critic of the power of sustainable investment). Or listen to similar arguments on BBC Radio here.
- The argument for ‘fee and dividend’ can be read here. And here is the impressive list of economists who support it (the largest collection of economists in history to make a single statement): historyismade.org.
None of this should detract from the importance of, and the intrinsic rewards reaped from, good citizens making good decisions and living good lives. There are also occasions when committed individuals can be important in supporting unproven or radical green initiatives before they are picked up and supported by the market. We must, however, deny our politicians and corporate PR the crass fantasy that any individual’s actions can come close to solving the climate problem.