Central bankers should stay out of the climate debate

Politicians have handed over too much power to unelected technocrats.

The claim that climate change is the most important issue facing humanity has become an article of faith for the political class. Yet at the same time, politicians seem strangely happy for unelected technocrats to make pronouncements and even to form policy in this area. Central bankers once did little more than act as behind-the-scenes advisers to governments on technical matters of monetary policy. So it is striking that they have now become prominent figures in the climate debate.

After almost seven years as governor of the Bank of England, Mark Carney is about to become the United Nations’ special envoy on climate action and finance. From the early days of his time at Britain’s central bank, he played a key role in making climate change an area for central-bank policy. More recently, his counterparts at other central banks, including the European Central Bank (ECB) and the US Federal Reserve, have followed his lead. Although their arguments are usually framed in terms of finance, they generally have far wider implications for policymaking.

Carney took up his role at the Bank of England in 2013 after occupying the equivalent position for five years at the Bank of Canada. In parallel with his two stints as a central bank governor, he was chair of the Financial Stability Board (FSB) – an international organisation set up by finance ministers and central-bank governors – from 2011 to 2018. He has been active in the policymaking debate on climate change for several years.

Carney’s interventions were low key at first, but not for long. Back in 2014, he got into a correspondence with the House of Commons environmental audit committee on the subject of ‘stranded assets’. The concept was introduced by the financial think-tank Carbon Tracker to warn about assets that would be unusable as a result of either climate change itself or of climate-change policy. In 2015, Carney warned publicly that investors could face ‘potentially huge’ losses due to climate change. The thrust of Carney’s argument was that tougher rules to curb climate change could make vast reserves of oil, coal and natural gas ‘literally unburnable’.

Carney’s statements are not detached observations. On the contrary, they are designed as a direct threat to energy companies in the here and now. They put pressure on investors, such as pension funds, to withdraw money from fossil-fuel firms or at least to threaten to do so. Carney’s threat had far-reaching economic consequences. And yet it was made by an unelected state functionary.

In 2015, Carney’s FSB was asked by finance ministers representing the world’s 20 largest economies to set up the Task Force on Climate-Related Disclosures (TFCD). The goal of the committee was to develop climate-related financial risk disclosures for use by companies. Michael Bloomberg, the billionaire US media mogul, was made its chair. Although its work was framed in technical terms, it was another initiative designed to pressure businesses to behave in particular ways.

Not long before the TFCD was officially established, the Bank of England governor outlined the role it could play. In a speech at Lloyds of London, Carney emphasised what he saw as a narrowing window of opportunity to tackle the threat of climate change. Again, this was coming from a technocrat with no democratic mandate.

As it happens, Carney has no scientific expertise in this area, either. Nevertheless, he returned to the theme several times during his time as governor. For example, in December 2019 he gave an interview to Radio 4’s Today programme in which he argued that the world will face irreversible heating unless companies shift their priorities soon. The episode was guest-edited by climate campaigner Greta Thunberg.

Carney now views climate change as an organising principle of finance. As a prelude to the United Nations Climate Change Conference in Glasgow in November (COP26), he made a speech declaring as a goal that ‘every financial decision takes climate change into account’. In practice, taking account of climate change will mostly mean curbs on economic activity, driving down living standards. Of course, politicians and campaigners should be free to argue for eco-austerity if they think it is necessary. But they should not be leaving it to technocrats to encourage cuts to investment without any public debate.

Where Carney leads, other central bankers are following. Christine Lagarde, the former IMF chief who now heads the ECB, has argued that climate change should be central to her new organisation’s role. Even the Federal Reserve, the US central bank, which has until recently shied away from the climate initiatives pushed by its peers, has accepted that it has a role to play in combating climate change. The chair, Jerome Powell, says it is only a matter of time before the Fed joins the Network for Greening the Financial System, an organisation of several central banks and financial supervisors dedicated to understanding climate change. The Federal Reserve Bank of San Francisco, one of the Fed’s 12 regional branches, held a major research conference on climate change in November last year.

Of course, climate change is not the only important area of public policy in which unelected central bankers have come to play an important role. Perhaps most notorious were Mark Carney’s claims around Brexit. In May 2016, before the referendum, he warned that a Leave vote could spark a recession. In 2019, he said a No Deal Brexit would result in an instant shock for the British economy. Carney would no doubt claim he was only giving his neutral view as a technical expert. But in both cases, whatever his intention, he was intervening in an important public debate.

In many respects, the growing role of central bankers in policymaking parallels developments with the judiciary. As spiked has argued elsewhere, judges have become increasingly involved in making the law rather than simply implementing it. In the case of central bankers, their role has moved beyond even economic policy. Until the 1990s, the key role of setting interest rates was the responsibility of the chancellor of the exchequer, with the Bank of England providing technical advice. Since then, the bank’s role has expanded beyond setting interest rates and economic policy to contentious topics like climate change and Brexit.

The broadening role of central banking and the judiciary can be seen as an extension of the phenomenon of ‘constrained’ or ‘insulated’ democracy. The defining characteristic of constrained democracy is that limits are placed on the decision-making power of elected representatives. Usually, as in the case of central banks, the main driving force is politicians who are happy to relinquish important areas of responsibility. The relinquishing of power even extends to climate change, despite the fact that politicians themselves define it as being of existential importance to the world.

For the sake of democracy, it is time to kick central bankers out of politics.

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The green war on roads

Campaigners are determined to use the courts to crush new infrastructure projects.

On Monday, The Times reported that a major new plan to upgrade the UK’s road network has been put on hold, largely thanks to the Court of Appeal’s judgement in February on the government’s national airports plan. As expected, the court’s ruling that the airports plan must take into consideration the 2015 Paris Agreement on climate change, to which the UK is a signatory, has given green campaigners ammunition to stop any major infrastructure project that requires planning permission.

In their ruling, the three appeal judges argued:

‘We have not decided, and could not decide, that there will be no third runway at Heathrow. We have not found that a national policy statement supporting this project is necessarily incompatible with the United Kingdom’s commitment to reducing carbon emissions and mitigating climate change under the Paris Agreement, or with any other policy the government may adopt or international obligation it may undertake. The consequence of our decision is that the government will now have the opportunity to reconsider the ANPS [Airports National Policy Statement] in accordance with the clear statutory requirements that parliament has imposed.’

But despite their protestations, the judges were clearly deciding to give precedence to one decision of parliament – to ratify the general aim of reducing emissions contained in the Paris Agreement – over another – to give the go-ahead to Heathrow’s third runway.

Now that this pecking order has been established, any new government planning policy must take into consideration climate change. The Paris Agreement, says the court, trumps all other laws. That doesn’t mean that governments can’t approve a new runway or build a new motorway, but they must be seen to have considered the effect of those new developments on that overarching climate-change policy.

Which brings us to the second Roads Investment Strategy (RIS2). The plan was to expand over 100 major roads between 1 April 2020 and 31 March 2025. However, the Department for Transport has now pulled the document and is reconsidering it, all in the light of these climate-change commitments. Indeed, the government’s long-term infrastructure strategy, which includes not just transport but also housing and much more, has already been delayed for the same reason.

All this confirms that parliament’s climate-change virtue-signalling is starting to have a real impact. Politicians airily vote for plans to cut greenhouse-gas emissions but with little sense of what those plans actually entail. Then they vote to approve new infrastructure projects that will clearly blow those limits. It turns out – surprise, surprise – that ‘net zero’ and economic development are incompatible.

Building a new runway at Heathrow will clearly increase the amount of flights. Building new roads, in the absence of a fleet of electric vehicles, will tend to make driving easier and encourage more journeys. All of these projects now must be set against the goal of slashing emissions. Either this becomes a purely paper exercise, where planning strategy is ‘green washed’, or many projects will be under threat.

Yesterday’s announcement of more money for road-building and maintenance by the chancellor of the exchequer, Rishi Sunak, is very welcome. But if the process of approving those roads is delayed due to endless court cases brought by green campaigners, we could end up with gridlock in the planning system as well as on our roads.

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The rise of green conspiracy theories

Environmentalists’ opposition to modern farming techniques is based on junk science and madcap theories.

‘Farming looks mighty easy when your plough is a pencil, and you’re a thousand miles from the cornfield.’ Those were the prescient words of US president Dwight Eisenhower. Today, debate about farming has been colonised by environmental activists with little regard for the realities of farming.

In January, the 11th Oxford Real Farming Conference was held just a few days after the Oxford Farming Conference. Ironically, while the Oxford Farming Conference features actual professionals from the farming, biotech and retail sectors, the Real Farming Conference objects to this approach. The ‘Real’ conference was established to fight against ‘industrial’ agriculture. Instead of ‘big business’, it hosts farmers alongside eco-alarmists and the likes of Extinction Rebellion. Extinction Rebellion also protested outside the regular Oxford Farming Conference, dressed in bright red, accusing the attendees of killing the planet.

Many eco-warriors take issue with any farming that is non-organic and, in particular, with the use of pesticides and herbicides. Farmers are using herbicides not to upset activists but in an effort to increase crop yields. These products are necessary and safe. They have been approved by medical agencies, food-safety authorities and governments around the globe.

What’s more, the kind of organic farming favoured by environmentalists is actually bad for the environment. As Chris Bullivant explains on CapX, organic farming produces more greenhouse gases than conventional farming – up to 58 per cent more, in fact.

Nevertheless, the Real Farming Conference promoted an ‘organic transition’ away from the use of copper, plastics and ‘other contentious inputs’. Instead of industrial farming, the conference promotes ‘agroecology’ and ‘peasant farming’ – a back-to-basics approach without synthetic fertilisers, pesticides, GMOs and herbicides.

An agroecological approach would be a disaster for our food supply. Agroecology researchers themselves admit that this form of agriculture would decrease agricultural production by 35 per cent. But no matter. The activists’ goal is the complete annihilation of conventional intensive farming at any cost.

Modern intensive farming techniques have successfully rid most of our farmland of invasive species and other pests. In the face of this obvious success, the opponents of modern farming have had to stoop to questionable science.

At an agroecology conference in Kenya last June, one of the featured speakers was conspiracy theorist Tyrone Hayes. His research gave rise to the conspiracy-monger Alex Jones’s infamous claim that atrazine, a widely used herbicide, ‘turns frogs gay’.

Also promoted as a top-tier speaker was Gilles-Eric Séralini, a French biologist and science correspondent for Le Monde (though he was, in the end, a no-show). Séralini is one of the world’s best-known opponents of genetically modified organisms (GMOs). A major anti-GMO study he authored in 2012 has since been retracted and debunked by four government-funded studies (three by the EU and one by France). The scandal became known as the ‘Seralini Affair’. The case against GMOs is based on pseudoscience, but this does not trouble the agroecology movement.

The unfortunate truth is that these agroecology activists are influential. For instance, the head of the UK Soil Association, Gareth Morgan, is regularly quoted in national newspapers. He is agitating for a ban on all pesticides and fertilisers and wants the government to endorse agroecology. Parliament already has an All-Party Parliamentary Group on Agroecology. In 2018, Michael Gove, when he was environment secretary, spoke at the Real Farming Conference.

Farming and our food supply are far too important to be sacrificed to the pet projects of conspiracy theorists and radical environmentalists.

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Crazy Joe to Fight Coronavirus by Rejoining Paris Climate Treaty

Former Vice President Joe Biden proposed his plan to combat the coronavirus outbreak on Thursday by rejoining the Paris climate treaty, contending that there is a “well-documented” link between climate change and public health risks.

Biden released his plan to fight the Wuhan virus outbreak and “prepare for future global health threats.” He added that climate change is a “driver of health threats.”

In his proposal, the former vice president promised to rejoin the Paris climate treaty “on day one” of his presidential administration” and “lead an effort to get every major country to ramp up the ambition of their domestic climate targets.”

However, it remains questionable how much good rejoining the Paris climate treaty will do ten months after the former vice president released his plan to combat the coronavirus outbreak.

“The link between climate change and health security is well-documented and will create a growing threat to Americans,” Biden wrote.

“As President, Biden will fully integrate climate change into our foreign policy and global health security strategies, and prioritize efforts to mitigate disease and migration challenges caused by a warming planet,” he said.

The former vice president also said that they would advance the Global Health Security Agenda “to respond to pandemic threats whether caused by natural causes and climate changes, bioterrorism, or laboratory accidents.”

Biden also promised to have health experts communicate with the public to combat alleged xenophobia that has followed since the coronavirus outbreak. During Biden’s speech on Thursday, he attacked President Donald Trump for spreading “xenophobia” for describing the coronavirus as a “foreign” virus.

“This communication is essential to combating the dangerous epidemic of fear, chaos, and stigmatization that can overtake communities faster than the virus,” Biden said.

“Acts of racism and xenophobia against the Asian American and Pacific Islander community must not be tolerated,” he added.

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Oregon’s Dem Gov. Signs Exec Order On Climate, Bypasses Legislature

Oregon Gov. Kate Brown took a page out of Sen. Bernie Sanders’s playbook Tuesday as she signed a climate executive order [pictured] after GOP lawmakers fled the state to avoid taking action on a climate bill.

Brown’s order intends to reduce carbon emissions by 45% below 1990 levels within 15 years and an 80% cut by 2050.

The order also directs regulators to issue rules placing caps on emissions for the state’s fossil fuel industry, a move conservatives say would decimate rural parts of the state.

“I’ve heard it loud and clear from our young people in Oregon: climate action is crucial and urgent,” Brown said in a statement announcing the move. “If we adults don’t take action right away, it is the next generation that will pay the price.

“This executive order is extensive and thorough, taking the boldest actions available to lower greenhouse gas emissions under current state laws,” Brown said, adding that she made the decision to help set “Oregon on a path we can be proud to leave behind for our children.”

The Democrat’s maneuver also requires 20% of her state’s transportation fuels to come from electricity, natural gas, and propane within a decade, and 25% by 2035.

Brown’s EO comes less than a month after 11 Republican lawmakers walked out of the state capitol, preventing the majority party from reaching a quorum on a cap-and-trade bill.

They say making tracks for another state was one of their only options after Democrats won the majority in 2018.

Her decision was a long-time in the making. Republicans employed a similar tactic in 2019 when they walked out in June to prevent a quorum in protest against HB 2020, a cap-and-trade climate bill.

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