How can adequate funding for flood defences and carbon reduction measures be provided?
Localise West Midlands website recently carried news of a report published by Finance for the Future. Green New Deal convenor Colin Hines, co-founder of Localise West Midlands and Richard Murphy, Professor of Practice in International Political Economy, City University, London, warned in December that the Paris Climate talks are facing an enormous funding problem to which there is only one viable solution: using a variation on the idea of People’s Quantitative Easing that has received much attention during 2015.
Now, as the climate crisis hits home, they state that the ‘risible inadequacy’ of the government’s £40m “extra” spending on flood defences (Cameron’s £40m flood money criticised as ‘sticking plaster’, 4 January) means that it’s time to address the finding of the billions needed to mitigate this inevitable consequence of climate change.
One answer is to be found in the recent extension of the European Central Bank’s €60bn-a-month quantitative easing programme, which included the crucial innovation that this money could be used to buy local government bonds.
They point out that the Bank of England’s governor, Mark Carney, is on record as saying that, if government requested it, future QE in the UK could buy assets other than government gilts and so, in that case, it is entirely possible for George Osborne to ask Mark Carney to buy local-authority-issued “climate bonds”.
Local authorities have the power to issue such bonds, and with increased devolution they should be encouraged to do so to fund flood defences and to reduce carbon emissions by improving energy efficiency in all the nation’s 30 million buildings.
In combination this would provide hope for all those in flood areas and also kickstart a decades-long programme that would create new jobs in a vast range of skills in every part of the country. Such an approach could unite local authorities of all political hues, the opposition parties, unions, business and NGOs.
For further details contact:
Professor Richard Murphy
Director of Finance for the Future LLP and Professor of Practice in International Political Economy, City University, London
Tel +44 (0) 1366 383500
Mobile +44 (0) 7775 521 797
Convenor Green New Deal Group
Tel +44 (0) 20 8892 5051
Mobile +44 (0) 7738 164 304