THE CLIMATE ISSUE: WHO STANDS IN THE WAY OF CLIMATE JUSTICE? TAX JUSTICE FOCUS VOLUME 11, NUMBER 3 EDITORIAL The newsletter of the tax justice network Climate Justice and Economic Justice 1 are the Same Fight Nicholas Shaxson WHO STANDS IN THE WAY OF CLIMATE JUSTICE? FEATURES Black Zero Against the Climate 4 Peter Bofinger The Wall Street Climate Consensus 7 Daniela Gabor Surviving Democracy: Mitigating 10 CLIMATE JUSTICE AND ECONOMIC Climate Change in a Neoliberalised World Chien-Yi Lu Carbon Taxes Can be Progressive: 12 JUSTICE ARE THE SAME FIGHT Myth-Busting and Mainstreaming Carbon Taxes editorial by The environmental movement urgently needs to make common cause Jacqueline Cottrell Nicholas Shaxson with those whose lives have become increasingly precarious over the NEWS IN BRIEF 15 last forty years. All of our lives depend on it. he world is divided between those engineering our economies and our lives Many people think that the fight to protect who worry about the end of the to prevent potentially catastrophic global the world’s climate is separate from the Tworld and those who worry about heating. struggles to tackle inequality, oligarchy, or the end of the month, a French “Yellow Vest” racial and gender injustices. For example, protester said in 2018.1 That is a starting point According to the International Energy Agency, climate activists may favour carbon taxes even if such taxes may hit the poor hard for trying to understand how to pay for two the world needs $3.5 trillion in global energy- and have regressive economic effects, while emergencies: the huge costs of the unfolding sector investments every year until 2050, if we Guest Editor: James Henry campaigners for economic justice may oppose are to limit global temperature rises to 2.0 Managing Editor: Dan Hind economic shock of the Covid-19 lockdowns, carbon taxes for the same reason. This is a degrees centigrade.2 Contributing Editors: John Christensen & Nick Shaxson and the even bigger long term costs of re- dangerous delusion, for – as this edition of Design and layout: www.tabd.co.uk Tax Justice Focus shows – the two struggles Email: info(at)taxjustice.net 1 https://www.lemonde.fr/politique/article/2018/11/24/ are inseparable, and each will fail without the Published by the Tax Justice Network. gilets-jaunes-les-elites-parlent-de-fin-du-monde-quand- 2 https://www.iea.org/news/deep-energy-transformation- nous-on-parle-de-fin-du-mois_5387968_823448.html needed-by-2050-to-limit-rise-in-global-temperature other. This is for several reasons. © Tax Justice Network 2020 For free circulation, ISSN 1746-7691 SECOND QUARTER 2020, VOLUME 11 ISSUE 3 TAX JUSTICE FOCUS “The world is divided between those who worry Part One of our edition on tax justice and the climate, published last month, provided about the end of the world and those who worry some answers: removing $400 billion in annual fossil fuel subsidies; transparency about the end of the month.” through new climate-friendly accounting standards; activism from groups like Extinction Rebellion; and a scheme to environmental threats, while also providing Neoliberalism, an organised programme auction carbon permits and redistribute the safe havens for fossil fuel wealth looted from to usurp democracy by replacing political proceeds equally to all citizens.5 the environment.3 decision-making with economic calculations, This edition, Part Two, considers the is the bedrock of the climate crisis, she obstacles to rapid change, and how to A second reason was articulated by the explains. Neoliberalism was always a strategy overcome them. Yellow Vest protesters in France, furious that that used deceit to undermine progressive ordinary folk are asked to pay new carbon Keynesian economic ideas, just as climate In our lead article Black Zero against the taxes while unaccountable elites engorge denialists have undermined climate science. Climate PETER BOFINGER, arguably themselves on state largesse. If the gigantic The trick has been to give people the Germany’s best known economist, kicks back costs of the carbon transition are shouldered appearance of empowerment through against a deadly German consensus known as by lower-income groups, their rage at being individual choice and freedom – but in the Black Zero: the idea that governments must Epidemics in the 19th century compelled the shafted – again – will create fertile ground process atomising and dividing them and always match spending with tax revenues and state to change in profound ways as citizens for demagogues and conspiracy theorists to thus dismantling and discrediting the idea of not borrow or run budget deficits. His article, insisted that the safety of the people was the highest law. We have yet to see what recruit them in their millions and overturn society, government and the common good. written for us just before the Covid-19 tranformations the current pandemic will the climate movement. This is already That common good includes the climate, of crisis erupted in Europe, unpacks the “corn impose. Much depends on how we respond in happening in the United States, Brazil, and course: any approach to tackle global heating economy” fallacies and misunderstandings the months ahead. elsewhere, and it is also a reason why the based on individual empowerment and that underpin Black Zero and shows why climate movement is struggling to emerge freedom will fail. states can and must now borrow (and use First, we face many of the same enemies, from what one of its leaders has called its central bank intervention) to pay for the transition.6 But German thinking has infected such as Charles Koch, Rupert Murdoch and “white, middle class ghetto.”4 So economic justice is not just a nice other powerful interests who have financed add-on to climate justice: we must the European Union through mechanisms both climate denialism and campaigns to Taiwanese academic and author CHIEN- join forces. This must not be a story of such as the Stability and Growth Pact, and persuade voters to cut taxes and deregulate YI LU outlines a third reason why the environmentalists against workers, or of now risks sabotaging the possibility of climate 7 our economies – with the Trumpian aim to two struggles are inseparable, in her poor nations against rich ones. It is a battle funding. override democracy and build oligarchic article for this edition of Tax Justice Focus. to organise to rebuild the common good, power at all costs. It is hardly surprising against the tax haven-using carbon elites 5 https://www.taxjustice.net/tax-justice-focus/ that their campaigns go together: according 3 https://www.lemonde.fr/blog/piketty/2019/06/11/ and economic elitists. There is no other way 6 https://www.ineteconomics.org/perspectives/ to the French economist Thomas Piketty, the-illusion-of-centrist-ecology/ to proceed. blog/modeling-the-financial-system-with-a-corn- economy-misleading-and-disastrous the richest 1% of the planet emit more 4 https://www.independent.co.uk/environment/ carbon than the poorest 50%. Meanwhile green-movement-must-escape-its-white-middle- 7 https://emmaclancy.com/2020/02/17/discipline-and- class-ghetto-says-friends-of-the-earth-chief- So: how can we pay for the climate punish-end-of-the-road-for-the-eus-stability-and- tax havens reduce states’ ability to address craig-10366564.html transition in a progressive way? growth-pact/ 2 SECOND QUARTER 2020, VOLUME 11 ISSUE 3 TAX JUSTICE FOCUS “Neoliberalism was always a strategy that used seems unlikely to melt away with a V-shaped recovery, and a return to the status quo.11 deceit to undermine progressive Keynesian The time to push new ideas is NOW. economic ideas, just as climate denialists have The 18th Century political philosopher Edmund Burke summed up how to undermined climate science.” proceed: “When bad men combine the good must associate; else they will fall, If states cannot finance the climate This is an existential danger to us all. It is one by one, an unpitied sacrifice in a transition, then the financial sector will the climate version of the Finance Curse,9 contemptible struggle.” do it. and the subject of our next article, The Wall Street Climate Consensus by DANIELA If we do not unite climate justice with This would pose immense dangers, not just GABOR, a world expert on finance and economic justice, tax justice, racial justice because states can borrow to spend far shadow banking. The transition can be and gender justice, those worried about the more cheaply than private actors can, and financed in two ways, she writes. The first end of the month will become the enemies because states are accountable to citizens would follow a Green New Deal logic, of those worried about the end of the whereas financiers are not. with state-led green industrial policies and world. The result will be an environmental, monetary policies, and strong penalties for economic and political catastrophe. Financial sector players will also use an polluters.10 The other, status quo route, sees array of tried and tested mechanisms private actors providing the financing: they to shift the risks of investment onto the will harvest the rewards while states and public, and shift the rewards to themselves. taxpayers take on the risks, in a dangerous They specialise in creating and occupying game of “subsidised greenwashing.” She economic choke points through which outlines just how to confront the Wall vast sums must pass, from which they can Street Climate Consensus. milk great wealth that would otherwise be spent on the climate, or on softening the In the final article JACQUELINE economic blow of the transition (or of the COTTRELL explains how fossil fuel lobbying Covid-19 crisis). As former Bank of England has undermined the push for a regime Governor Mark Carney crowed earlier of carbon taxes and explores how this this year, the immense sums required to rearguard action by the worst people in the finance the climate transition “could turn an world can be defeated.