The COP-26 conference in November saw valuable progress made toward the creation of a sustainable world economy. But more needs to be done if the world is to meet its goals around reducing carbon levels – and if the responsibility, and impact, is to be shared equally.
Speaking to ANZ Chief Economist Richard Yetsenga as part of the Blue Lens on Mic podcast series, Mundy said while the latest COP conference represented significant “steps forward” on the path to net-zero carbon, it lacked “the level of ambition I would consider appropriate”.
“[The event was] better than a lot of previous COPs, which yielded almost nothing whatsoever,” he said. “But relative to the level of ambition that's needed, [it was] very disappointing.”
The “huge” presence of business representatives at the conference was a good sign the corporate sphere was beginning to recognise its critical role, Mundy said.
“I was speaking to…an environmental consultant to big companies” he said. “And he said he'd met more top executives at Fortune 100 companies than he had the last ten COPs put together. So this was a different level in terms of the business presence.”
Mundy believes the “climate crisis” isn’t something that can be solved in isolation, and any moves to address it needed to consider the impact of “hyper inequality”.
“The fundamental reason for that is there's no really comprehensive solution to the climate crisis that comes without an enlarged role for the state,” he said. “And on some level, you can debate about how big that would be, but probably the state is going to have to do a lot.”
Mundy said strong resistance to climate action among people in the bottom half of the income distribution chart was a factor that needed to be addressed.
“You probably have to tackle the extraordinary increase in income inequality that we've seen, particularly in the UK and particularly in the US,” he said.
Yetsenga agreed there is “a long way to go” toward a climate solution, and said inequality offers “good insight into why this issue has proved so complicated”.
“You can't separate it from all the other decisions we make from an economic policy perspective,” he said. “[Climate is] inextricably linked all of these things you spoke about - hyper inequality in many countries. In fact, civil society is often leading this push rather than the government of the day.”
Yetsenga said from a macroeconomic perspective, the evidence is beginning to suggest “separating macro outcomes from distributional outcomes” was a mistake.
“The inequality we're facing worsens macroeconomic outcomes, makes us more vulnerable to crises, contributes to political polarisation and… [is] holding back addressing climate change,” he said.
Another factor was lack of pressure on leaders in much of the West to push for any concrete climate action, largely because “people have got a lot of other things to worry about”, Mundy said.
“That's also because I think a lot of people have been quite… overwhelmed by the climate crisis,” he said. “I do think there's the beginnings of change, because I think [people] are getting better informed on this. I think the climate crisis is - to a degree that's very surprising to me, actually - really rising very fast up the list of voter priorities.
“But there's a heck of a long way to go.”
The focus on climate can sometimes unintentionally place too much emphasis on “what we can do as consumers and not enough on what we can do as citizens”, Mundy said.
“A lot of people when they think about [what they] do in response to climate change go immediately to what they can do as consumers,” he said. “It's all about fly less, eat less meat, recycle more, use public transport. And these things do help.
“But…that will not fix the problem. And we will continue heading for catastrophic levels of climate change. The only thing that will change that is for people to get engaged as citizens.”
Yetsenga said the solution needed to “help those who are most affected and least able to bear the cost, because the change we're talking about is substantial”.
This means sharing the responsibility for that change, Mundy said, and shifting the focus away from individuals.
“I'm not saying don't try and reduce your personal impact,” he said, and instead encouraged people to not focuss “excessively on our personal carbon footprints at the expense of things that we can do to help to move things towards really constructive policy change”.
The conversation also so touched on the impact of ESG investing and Mundy’s book Race for Tomorrow. Listen to the podcast above to find out more.
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