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Outsourcing the climate crisis to the private sector will only fuel the fire

Jun 21, 2023

The climate crisis is far too important to be left in the hands of the same corporate actors who started the fire. This Public Service Day, we must make clear that privatisation, PPPs and more outsourcing are the last thing our planet can rely on to make it through the climate crisis. Well-funded quality public services are the key to unlocking our green new world.

They tried it with our care homes - which ended up overcrowded and understaffed.

They tried it with our railways - which ended up overpriced and endlessly late.

They tried it with our energy systems - which ended up more expensive, less reliable and more polluting.

And they all required massive, unplanned public subsidies for private operators to deliver on their promises. 

Yet despite experiences from across the world demonstrating the inability of the market to deliver services in the public interest, politicians continue to push market-led policies.

At the “Summit for a New Global Financing Pact” in Paris this week, many leaders will endorse a public-private partnership (PPP) model to reduce emissions – which is a risk our world simply cannot afford. A group of heads of government released a global open letter, repeating the belief that private funding is essential to the global changes needed. 

A 2% tax on extreme wealth could raise two-thirds of our climate transition costs, estimated at $3.5 trillion per year by 2050.

The climate crisis is far too important to be left in the hands of the same corporate actors who started the fire. Global climate inaction and the reliance on the private sector is based on a simple oft-repeated myth: we cannot afford to publicly fund the transition away from fossil fuels. Of course, the reality is we cannot afford not to.

But the base assumption that ‘there is not enough wealth’ falls apart under scrutiny.

There is enough wealth for oil firms to make hundreds of billions in profits while funding climate disinformation.

There is enough wealth to send Jeff Bezos and his billionaire buddies on joy-rides to space - using up many lifetimes worth of carbon emissions in the process.

There is enough wealth for corporations to spend trillions on share buybacks while workers scrape by on poverty wages.

The question is not one of wealth but of distribution.

That’s why ahead of this latest Paris summit, over one hundred leading economists wrote to government leaders, urging them to implement a wealth tax on the fortunes of the world’s richest people to fund the climate transition.

Estimates show a 2% tax on extreme wealth would yield around $2.5 trillion per year. The annual cost of reducing emissions and funding adaptation by 2050 will be around $3.5 trillion per year. This simple tax on wealthy individuals alone could raise two thirds of our climate transition costs. Fixing the broken global tax system and implementing a minimum corporate tax, such as that advanced by PSI, would raise significantly more.

This will be key to funding the vital public services which will drive the green transition:

  • We must urgently drive the transition to low carbon energy systems. The private sector had years to lead this and have so far failed miserably.  Public mandates and funds must be directed to public energy utilities at national and local levels to build the new systems.  Workers must be hired, trained and deployed.  Workers in energy generation based on fossil fuels must be retrained and redeployed.  Their families and communities must be protected during the transition.  Public transmission and distribution grids must be updated.  And the built environment must be renovated and insulated to consume less energy, despite growing demand for heating, ventilation and air conditioning. 

  • Adapting to the new reality will also depend on public policies, funding and public service workers.  We need improved emergency services - to respond to increasing climate catastrophes which put our lives and livelihoods at stake. Public service workers know first-hand the brutal effects of extreme weather events - and building resilient, professionalized services is key to allowing them to help families and communities to adapt. 

  • We need universal public healthcare, to deal with the rise in diseases, chronic conditions and abnormal temperatures which already contribute to more than 5 million deaths each year. The Covid-19 pandemic forced frontline workers to work in brutal conditions, paying the price for decades of underinvestment in staffing and resources. Meanwhile, a multi-country study found a significant correlation between increased privatisation and higher Covid-19 death rates among both workers and patients in health and social services. Covid and the climate crisis both demonstrate the need for urgent new investment in public health systems.

  • We need effective public transport to discourage emission-intensive car journeys. While road transport contributes 15% of global emissions, rail transport accounts for less than 0.25%. By making public transport free or heavily subsidised we can significantly reduce individual carbon footprints and improve the connectivity of our cities and countries.

  • Developing countries and local authorities need specific policies for them to implement mitigation and adaptation, including more public service workers with better tools and training.  Debt relief and tax justice; loss and damage funds; access to key technologies free from intellectual property protections – these are some of the actions we must take. 

The scientific consensus on the climate crisis is key to improving public understanding of the threats we all face. Even in the US, where climate skepticism remains rampant, over 75% of people support international efforts to reduce emissions. What we now need is a political consensus, one based on strengthening our democratic institutions. Economists calling for new wealth taxes are leading the way. But it’s time for the wider economic community to finally abandon the fantasy that the profit motive or market forces will solve these problems and admit that a new, fairer global tax system is essential to funding the changes we need.

This Public Service Day, we must make clear that privatisation, PPPs and more outsourcing are the last thing our planet can rely on to make it through the climate crisis. Well-funded quality public services are the key to unlocking our green new world. We know there is more than enough wealth to properly fund these services to drive the transition. It’s time for our politicians to abandon discredited private-sector proposals and instead focus on proven public solutions. We need to make sure that they defend people and planet before profits. 

 




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