A letter to Starmer from the United States: abandoning your £28bn environmental strategy is not only cowardly, but also detrimental to your political career | Kate Aronoff
It is challenging to feel reassured about the state of our climate policies in the US. While the Inflation Reduction Act, a significant achievement for the Biden administration, focused on green investments, the country is still setting records for fossil fuel production and export. In fact, last year saw the highest extraction of oil and gas in US history. The upcoming presidential election in November adds to the unease, as current polls show Donald Trump leading Joe Biden.
Unfortunately, the Biden administration has only established a minimum level for the amount of investment in green initiatives that center-left parties should aim for. The same cannot be said for the Labour party, as they have apparently abandoned their commendable promise of £28 billion towards green spending in favor of blindly adhering to their leader’s questionable notion of fiscal responsibility. So, what lessons can Labour take from the strategies employed by the Democratic president?
Biden deserves recognition for taking seriously the importance of winning over progressive supporters who backed his main opponent in the 2020 Democratic primary, Bernie Sanders. Sanders was an early advocate for the climate movement’s push for a “green new deal”, presenting a comprehensive $16 trillion plan to address both global warming and inequality. While Biden’s $3.5 trillion Build Back Better plan, developed in collaboration with Sanders and his supporters, was not explicitly a green new deal, it did incorporate many of its key elements, emphasizing the potential for climate action to create jobs and drive economic growth in the 21st century. This approach demonstrated a willingness to invest significant funds quickly in areas of critical importance.
Shortly after Biden’s inauguration, environmental supporters in the US witnessed the White House’s initially insufficient plan for job creation and addressing climate change being reduced to the final version of the Inflation Reduction Act, which only includes approximately $400 billion in new expenditures for climate and environmental initiatives. It is disappointing that this program is so meager, considering the wealth of the US and its significant role in causing the climate crisis. However, given the strong influence of the fossil fuel industry on the Republican party and influential Democrats like Senator Joe Manchin from West Virginia, this may have been the best outcome we could have expected.
Why are some members of the Labour party willing to negotiate against their own interests, despite the weakened US climate policy? The party has abandoned their £28bn annual green prosperity plan due to political cowardice, exemplified by shadow chancellor Rachel Reeves distancing herself from the policy and veteran Ed Balls urging a “U-turn” to avoid attacks from the right. This move shows that the party establishment is afraid of rightwing criticism.
The US can teach us a lesson on how to handle right-wing groups who criticize green policies for allegedly harming regular citizens and promote harsh austerity measures. Giving in to their ideas will not be acknowledged or appreciated. In addition, voters will not support such actions. The consequences of the climate crisis are severe and far outweigh any costs associated with taking action. According to current policies, the UK could lose 3.3% of its GDP per year by 2050 due to the climate crisis. This number jumps to 7.4% by 2100, which would equate to approximately £168 billion in today’s currency.
There is no need for the Labour party to focus on the future when making a clear argument for increasing investment in environmentally-friendly initiatives. The long-standing opposition of the Conservative party to effective climate policies has already resulted in higher costs for the working-class citizens of Britain. In 2013, David Cameron’s attempt to reduce spending on environmental efforts led to the discontinuation of a successful home insulation program. Additionally, the average household could potentially save up to £400 on gas bills if the Conservatives had not eliminated the energy price guarantee scheme.
The Labour party’s plan for promoting environmental prosperity was originally created in accordance with the Inflation Reduction Act. However, there was an opportunity for Starmer to enhance the plan by highlighting its short-term advantages, such as the potential savings for households through national home insulation projects. While the act has gained attention among policy experts in the US, UK, and other parts of Europe, it remains largely unknown to the general public. As of last August, 71% of US residents reported having little to no knowledge about it, even though it has been in effect for a year. This lack of awareness can be attributed to factors such as the fact that a significant portion of the act’s funds, $216 billion out of $394 billion, will go towards corporations according to consulting firm McKinsey. Additionally, many benefits, such as tax incentives for expensive items like electric vehicles and solar panels, are not accessible to lower-income individuals and renters who make up 36% of US households.
Encouraging investment in environmentally-friendly energy and technologies is highly beneficial, as shown by the fact that green industries in Britain grew at a rate four times faster than the rest of the economy in 2020-2021. However, prioritizing private-sector investment in these industries, as criticized by the Inflation Reduction Act, could potentially leave voters unaware of the financial advantages of taking action against climate change. A successful green industrial strategy should also involve an increase in public resources, services, and planning capabilities. Improving public transportation infrastructure and ensuring affordable access to low-carbon energy will be crucial for the success of these emerging industries. More importantly, these efforts could form the basis for Labour to establish a shared prosperity and gain support for stronger climate policies in the future.
The recent years of climate policy development in the United States have led to a clear conclusion: those who opposed Labour’s commitment to green spending, including Reeves, were incorrect. Labour should spare no expense in reducing emissions and improving quality of life; in fact, £28bn per year is not nearly enough. If the party leadership can find the political courage, they should backtrack from outdated economic principles and revive their more ambitious climate plans. This will allow voters to see the choice before them – to live a sustainable, green life under Labour or to continue letting the Tories take more of their hard-earned money. Otherwise, the differences between Tory and Labour leadership will become increasingly difficult to distinguish.
Kate Aronoff works as a writer for the New Republic and is a fellow at the Roosevelt Institute. She is also the author of Overheated: How Capitalism Broke the Planet – And How We Fight Back.