This coronavirus has created three shocks. There’s the health shock, the worst of which should be behind us by the end of this year if Governments handle it well.
There’s the economic shock which will last for considerably longer and there’s the psychological shock which we’ll never get over.
No one who is alive today and old enough to understand what is occurring will ever get over the latter shock and it will mark our lives in a way that only war does. What’s more, this is an event that has happened simultaneously to all eight billion of us on the planet – nothing like this has ever happened to humankind before.
The consequences of these three shocks have been to destroy the future that, on New Year’s day 2020, everyone believed they had, and what happens next is now up to us and this will be a highly contested space.
It will be a contest of interests, beliefs and opinions all trying to shape the policy landscape as we pass through the crisis into its aftermath and it will be a battle between incumbents seeking a way back to their past and innovators embracing the possibility to build back better.
It will be a contest between small state political ideologues who have seen their plan hampered and those for whom the state is back in its proper place.
It will be a battle between those for whom the concept of conflict is the driving energy of human development and those for whom competition unconstrained by cooperation is a prescription for anarchy.
The policy landscape that arises from these contests will define the possibilities for the success or failure of the climate policy and it’s far too soon to see much of that landscape.
This is the time when certainties are dangerous, yet a fog of uncertainties rule.
First, the climate will go on evolving – how much and how fast will depend on the outcome of the contests above, but the nature of our influence on the climate system is such that the future we have already created pauses a while before announcing itself.
And the tide of public concern on the climate in 2019 that found such important global expression in Greta Thunberg and Extinction Rebellion was driven by the public’s growing experience of extreme weather situations.
Public and political awareness is rightly directed elsewhere for the moment but the events that inspired the anxiety will not stop coming and Government’s everywhere will have restoring the economy as their top priority.
This means restoring purchasing power as quickly as possible and a danger for any government bailout programme is that it becomes a bailout to a multitude of other problems.
Inevitably there will be an army of lobbyists seeking to move the all too visible hands of politicians – a pretty clear test then emerges for bailout bids and there will be debt, there’s already debt, now there will be much more debt.
And there will be levels of debt we have only ever encountered before in the aftermath of global war and settling this debt will be the next priority for Governments as they reconstruct their economies.
Here there’s a clear lesson from history. After the first world war, the way chosen to deal with the debt was to reduce public spending. The result was the Depression from which economies were only really rescued by the next war.
After the second world war, the policy choice was to mobilise public investment in creating the welfare state in Britain and the Marshall Plan in Europe.
The resulting productivity improvements meant the market was growing fast by the fifties and the debt was back to controllable levels. Now the need to protect the climate can come to the rescue of our damaged economy by providing, on massive scales, just the productivity-enhancing investments that will push the energy transition to net-zero and heighten confidence in economic recovery.
