23 months and counting

This year’s almost mythic, defining task is to roll the boulder of a new climate agreement uphill to Paris. There’s a whole sack of new sustainable development goals to sign-off as well. Intended to allow the whole human population to thrive within planetary boundaries, these 17 principal goals were meant to be concise, global, limited in number, action-oriented and easy to communicate.

The big ones like ‘end poverty in all its forms everywhere’ are wonderful. But they are also hilariously out of alignment with the current direction of the economies that created the problems in the first place. Finance is still in the driving seat, with Goldman Sachs giving 121 of its UK traders and chief bankers an average pay packet of £3m. The latest data showed inequality rising in the UK, median incomes down and the net wealth of financial corporations up by 373%.

Crucially, if just the climate boulder doesn’t get up the hill of 2015, the impacts of irreversible global warming will kiss goodbye all the other sustainable development goals regardless, however great they sound.

Memories of the failure of the 2009 Copenhagen climate talks create fears that the challenge is a doomed, repetitive, Sisyphean labour. Worse still, in real life rather than mythology, King Sisyphus himself gets to skip the original rock-rolling punishment for being crafty, cruel, and hubristic, very like the heedless financial markets. The endless heave is left to other, lowlier subjects.

Pretty bleak, or is it? Smart policy makers could grab some unexpected opportunities to win two of the greatest prizes in green economics: to tackle the price of carbon and find the scale of resources needed to invest in transition. Both might set the scene positively to prevent the forthcoming drama of Paris from becoming a tragedy.

Things keep happening which suggest that there is more room for manoeuvre than previously thought. Few, for example, foresaw the recent fall in the price of oil. When it was comfortably above $100 (£65) per barrel, making the case for a carbon floor price – designed to raise the cost of pollution and make clean investment more attractive – was vulnerable to the argument that while the economy was still ticking over, the extra cost may be critically damaging. That’s a much harder case to make with the oil price now below $60 per barrel. It’s an ideal political moment now to set the tone for the year and implement a floor price. Industry has become accustomed to the higher price and should be able to adapt without missing a beat.

The other opportunity emerges from the logical gap in the UK, and in varying degrees across Europe, between official commitment to austerity in the name of deficit reduction, and the return to political favour of public investment in infrastructure. This matters for several reasons.

In the UK, austerity measures have failed to meet deficit reduction targets, while promoting labour policies that undermine the tax base, making meeting the targets even harder. Now, if there is to be spending on infrastructure, to support a modern economy it would have to be green and low carbon.

This would solve several problems at once like creating good jobs, generating tax receipts, lowering energy bills, insulating the economy from the geopolitics and price volatility of fossil fuels, and boldly striding toward Paris by tackling climate change. Massively expanding the Green Collar sector, starting with the renovation of homes, could be funded by new, targeted quantitative easing – an innovative spending tool that avoids conventional government borrowing and holds no technical barriers to implementation according to Mark Carney, governor of the Bank of England.

Wim Boonstra, chief economist of the huge Dutch Rabobank and professor of economic policy at VU University, Amsterdam, recently argued for a huge €1tn programme of public investment funded by ‘monetary expansion’ from the European Central Bank (ECB), in other words Europe-wide quantitative easing, to avoid deflation across Europe. Investment at this scale in the low carbon transition of Europe’s infrastructure might finally send a global message that rich countries are serious about climate targets.

Of course, any such programme needs to be well-targeted – think of it being about ‘lifeboat’ rather than ‘helicopter money’, intended for making a more comfortable, well-employed and climate-proof economic boat, rather than just loading more random consumption onto the leaky, low-in-the-water one we already have. And it would need watching hawkishly to avoid unintended consequences, but the need is there and the potential is enormous.

Elsewhere, good news comes from recent research at the University of California-Berkeley. It gives welcome academic support to the season’s enduring celebration of the possibility of new beginnings, and a really good excuse to stay in bed. Things that make us happy, it seems, also help us get off the treadmill of rising energy consumption.

Echoing other studies, it found a strong link between behaviour shifts that add to our life satisfaction and lower our consumption of energy. Activities like volunteering, sleeping more, spending more time with friends and exercising, have little to do with the classic vision of consumers buying more stuff to fuel an economic recovery, but they have a lot to do with the human recovery needed if we are to find a better way to be in the world. And it might just stop that big rock rolling down the hill again.