How fresh economics can tackle coronavirus and climate change.
Measures to ease the impact of coronavirus hold lessons for how we can fight the battle against climate change, argue Colin Hines and Rosamund Aubrey, while Carl Gardner looks at the future of our financial centres.
Larry Elliott correctly identifies the wartime scale of responses to the coronavirus as signalling the jettisoning of obsolete economic theory (The coronavirus is leading to a whole new way of economic thinking, 22 March). It already involves bypassing deficit handwringing as well as massive Bank of England spending using quantitative easing, with its first-step e-printing of £200bn. Once QE and government spending are – hopefully – providing adequate resources for the health service, and the necessary financial cushion for businesses and workers, it will be time to urgently consider what lessons can be learned to tackle the other all-pervasive threat to our future – the climate emergency.
Central bankers used “bankers’ QE” to help tackle the 2008 financial crisis and are now turning to “coronavirus QE”. While working to bring this latest threat to human health under some degree of control, it is time to also plan for “green QE” to fund a global green new deal to transform the health of the planet. In the UK this would involve the Bank of England e-printing hundreds of billions of pounds. A new national investment bank would issue bonds that would be bought using QE and the money used to fund a green and decentralised infrastructure programme. This could include a decades-long, multi-skilled initiative involving energy refits of all 30 million UK buildings, a shift to localised renewable energy and food production, and the building of local transport and flood defence systems. The last war led to the NHS; this one must result in a green new deal.
Convener, UK Green New Deal Group
In his excellent opinion column on how the coronavirus crisis will transform our current economic and social models, William Davies says: “It may end up devaluing urban centres, as it becomes clear how much ‘knowledge-based work’ can be done online” (The last global crisis didn’t change the world. But this one could, 24 March).
I live close to the City of London. The usually congested streets there are almost deserted; most financial buildings stand empty. If the financial system can apparently carry on with a large proportion of its workforce working from home, we must ask whether we actually need the massive conglomeration of mainly ugly, expensive, energy-guzzling buildings that I can see from my window.
It seems more and more evident that these glassy towers, still being built and rebuilt even as I write, now mainly serve as the vanity projects of corporate bosses. Perhaps this outdated model of financial centralisation is already redundant? Without great loss, couldn’t they be turned over, at least to a large extent, to housing for the UK’s homeless – or other socially useful projects?
• William Davies and others are suggesting that the Covid-19 crisis is the sort of world-making event that allows for new economic and intellectual thinking. If we take the response to the climate crisis as an example, we may be overly optimistic. Many of us have been campaigning for many years, but only now has the world paid attention when teenage activists have spoken truth to power. Yet governments and corporations are still dragging their feet or are in denial.
One crisis is due to carelessness, the second to misfortune; who knows if there will be a third. Covid-19 has motivated community action and, while we are in lockdown, we could bring together disparate thinkers and activists to form online citizens’ assemblies. We need the reach to be as wide as possible; this can’t be just an academic exercise. There are many with the experience to lead and coordinate, and crowdfunding would finance a long-term initiative. Unless we speak truth to power and can coherently argue our case with policy, strategic and practical solutions, it will be business as near usual as possible.
St Ishmaels, Haverfordwest
24 March 2020