Supermarkets, levies and the social franchise

(open clipart)

(open clipart)

We have referred in recent posts to the idea of the social franchise.  This framework for local policy has been advocated and developed by colleagues at the CRESC research unit (Manchester and Open Universities).  The idea is simple: by operating in a local area, businesses have an obligation that goes beyond mere market considerations.  They are in effect operating a franchise from the local population and its elected (local) government – they get to make a profit and we provide labour, a market, and favourable conditions such as planning permission and often hidden subsidies (like the UK’s low and frequently avoided rate of corporation tax).  What do we, the community get back in return?

The social franchise particularly applies to those large businesses that are place-based.  They are part of what CRESC call the Foundational Economy: that mundane but large and relatively resilient part of the economy that isn’t going to go away, that keeps on going despite economic storms – utilities, retail banking, health and social services, food processing, and much distribution and retail.  Quite a world away from the glamorous hi-tech, financial, media industries beloved of the orthodox city leaders and the priesthood of advisors – although let’s remember that the boundaries of the Foundational Economy are not necessarily fixed or total – it may be a matter of degree.

How do we get big firms to deliver on the social franchise?

Enfield council has shown the way with its work with the utilities and supermarkets.  They called them in for a discussion. Not all played ball but some did, including British Gas which agreed to employ more staff locally.  Contracting with local small businesses was also under discussion.

There are other ways too.  Derby council, together with 18 other authorities has just approached the ‘government in London’ proposing a levy on big supermarkets under the Sustainable Communities Act 2007.

Specifically the proposal is for government to give local authorities the power to introduce a levy of 8.5% of the rateable value on large retail outlets in their area with a rateable annual value not less that £500,000 and for the revenue to be retained by local authorities in order to be used to help improve their local communities. This could generate hundreds of millions of pounds for local authorities across the country to spend on making their areas more sustainable.
http://sustainablefoodcities.org/newsevents/news/articleid/41/supermarket-levy

It already exists in Scotland (9.3% levy) and Northern Ireland (8.5%), so we know its possible.

 Evidence shows that the revenue from the Northern Ireland levy has helped over 8,000 small businesses in Northern Ireland and has had no negative impact on jobs. The levy is being used to help public services in Scotland.  (source as above)

 63 other local authorities have also backed the call.  I can’t find the list of which these are – maybe some Greater Manchester authorities have also backed the Derby 19.   Is Manchester one?……

…….NO.  Astonishingly, the council has said it will not back the proposal.  Jeff Smith, executive member for housing and regeneration, is quoted, by the Evening News as saying:

“We work very hard to bring in big supermarkets because they provide much-needed regeneration.

“we want to encourage them and not run the risk of putting them off.”

He said they brought both regeneration and jobs to more deprived areas – and created large retail developments which meant investment in the surrounding areas.

But as Councillor Ranjit Banwait, Leader of Derby City Council says:

Research has shown that 95% of all the money spent in any large supermarket leaves the local economy for good, compared to just 50% from local independent retailers; this levy is a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade.
http://www.derby.gov.uk/whats-happening-in-derby/news/supermarket-levy/

I had a brief conversation with Jeff about this on twitter:

 

So we’ll see.  Maybe Manchester is, as Jeff suggests in the MEN article, ‘different’.  But if so it really needs to demonstrate the economic benefits, taking into account the well documented outflow (a.k.a “leaky bucket”, “leaching effect”) of the big supermarkets on the local economy.  Exam question to our council:  “How do you secure the social franchise for Mancunians?”.

For now at least we are stuck with these giants.  We need to see how we can tame them, capturing some of their money flows to use them in for the public good.

And while we are on it – how about we all refuse to use those automatic tills that are springing up everywhere.  That could be an agenda item for Manchester’s first calling to account meeting with the supermarket chains.  OK, supermarket jobs are not the best ones in the world, but they do (did?) make a contribution to many families’ income.  If the council’s priority is as Sir Richard has, I think said, “Jobs, jobs, and jobs”, what are they doing with their friends Aldi, Asda, Tesco and the like to protect them?

Can we end aviation dependency, and meanwhile how to spend the profits?

 

Last year Manchester City Council received what was described as a windfall of some £14m from its share of Manchester Airport Group. The other Greater Manchester councils have received a smaller, proportionate share.

This year the figure is £16.23m according to Manchester Evening News. It might seem puzzling that this is termed a windfall, since so long as Manchester Airport Group returns a profit, then there is a constant stream of money. But maybe it is safe to regard it as an unreliable, since levels of aviation are vulnerable to economic downturns, and while we know that there will be another financial crash, we don’t know when it will come.

In this piece we will,

1) consider what the airport contributes to Manchester’s well-being, and the costs involved,

2) suggest that there should be a strategy to use the funds the airport brings in to reduce levels of flying while building up other areas of the economy,

3) comment on how the money might be used, suggesting some principles to guide the use of non-recurrent monies.

1) The airport’s contribution to our well-being.  £16 Million sounds like a lot of money, but in relation to the council’s overall budget of £555,164 it is relatively small (2.88%). The airport does make a significant contribution to levels of employment and income in the city and region (although this is often over-estimated), but if our assertion above about the vulnerability of aviation to economic shocks is correct, then putting a lot of eggs in this basket is not a good strategy. Elsewhere we have criticised at greater length the strategy of reliance on aviation-based inward investment.

We should also make the obvious point that, in addition to noise and green belt encroachment, air traffic is a very significant source of greenhouse gas emissions, yet there is a taboo about even discussing the matter in relation to Manchester’s carbon reduction plan: try inputting the search term aviation on the MACF website.

Here are our calculations on the carbon emissions and their rate of growth (note that we have not factored in the ”aviation multiplier” commonly used to recognise the particularly damaging impact of jet aircraft).

Airport growth and emissions: Manchester Airport Group
 
Manchester reported reported projection
  2011 2014 2015
tons CO2 2,201,717 2,488,779 2,607,293
annual growth   4.35% 4.76%
passengers 18,577,805 21,000,000 22,000,000
per capita 0.1185 0.1185 0.1185
       
       
Stansted reported reported projection
tons CO2 1,013,173 1,130,000 1,243,000
annual growth   -0.44% 10.00%
passengers 18238050 18,000,000 19,800,000
per capita 0.0556 0.0628 0.0628
       
Sources 1 1,2,3,4 1,2,3,4
Key to Sources
1 http://awsw.co.uk/allco2/index_co2.html
2 http://stopstanstedexpansion.com/documents/Estimation_of_CO2_emissions_2014_R.pdf
3 http://www.manchestereveningnews.co.uk/business/greater-manchester-councils-30m-windfall-7421612
4 http://www.ft.com/cms/s/0/36bd3f1a-0b8a-11e4-8693-00144feabdc0.html?siteedition=uk#axzz37cmialAm
calculated
Emissions estimates do not include a multiplier for the additional impact of aviation emissions.
Growth rates for 2014 are based on the average since 2011.

 

2) A strategy to reduce aviation dependency. Our view is that in a world with an outside chance of avoiding catastrophic climate change, we should have a strategy to firstly cease airport expansion and secondly to downsize this sector, reducing and ending the ‘aviation dependency’ of the region’s economy. Some of the profits from the current operation could and should be used to build this strategy. Again we have discussed this elsewhere, suggesting that we need to construct a post-growth replacement economy, that is selectively grown while the damaging sectors are progressively shrunk. But while we live in awe of ‘the market’ and depend on the growth of other economies (China comes to mind), then our leaders will remain too timid to take this necessary plunge.

3) Spending it. So that’s one way to spend some of the ‘windfall’. What principles should guide the spending of the rest of it? We know that one off sums can be difficult to put to good use. Much council expenditure, directly or in directly, is recurrent. That is to say it isn’t a one-off expenditure but requires money to be spent every year. That’s mostly because it pays people’s wages, and services the council pays for, whether direct, such as looking after people are labour intensive.

It is perhaps therefore not very surprising that the council’s ideas on how to spend last year’s windfall were seen by some as vague and cosmetic, although doubtless some good was achieved through the “clean and green” scheme.

There are some tricks in spending non-recurrent monies to get the best benefit. Here are some of them (and we aren’t suggesting that all the examples we mention can be funded from this year’s £16M).

Principle one is to spend on things that will make a positive impact on people’s lives. So spending on affordable housing, in the context of a shortage (as a result of years of neoliberal government policy), is a good example. It also means a ‘multiplier effect’ as jobs are created, and people spend their wages in the local economy.

So that’s principle number two: spend in ways that multiply the benefit. Spend on fitting highly effective insulation to the 90% of the housing stock that need it would save residents money by reducing fuel bills, create jobs and build skills, and reduce greenhouse gas emissions – not to mention reducing fuel imports to improve the UK’s trade deficit and reduce vulnerability to external shocks. That’s the idea behind the New Green Deal Group’s proposal for Green Quantitative Easing, but it could be done locally.

That in turn suggests principle three: spend for the benefit of future citizens and for environmental benefit. We need to really ‘clean up the city’, so it reduces its ecological footprint. Retrofitting insulation is just one example of this. How about kick starting community energy generation, community food production, or community textile production? Our idea of investing to reduce airport dependency is another.

Principle four is about another kind of multiplier effect – invest to reduce ongoing expenditure, so that the council has more money available, recurrently in future years. To give just one example, supported housing for learning disabled people is expensive to staff because it is based on the ordinary housing stock. Investing more money in well designed supported housing options could pay for itself quickly. Without any wishful thinking about ‘reducing welfare dependency’ or promoting overall economic growth (or returning to institutional human warehousing), judicious investment can mean there is more to spend in future years.

Local government has the responsibility to make good use of its resources. To do that, our present system, like it or not, vests that responsibility in elected members and officers. But it is always good practice to consult in a meaningful way and get ideas from people in the city.

Mark H Burton

 

Germany: a case study in the post-growth economy?

Old German cityscape

Cityscape of Rothenburg, Germany by Helm42 via http://openclipart.org

We can’t possibly do without economic growth! This is the mantra repeated by the political and economic establishment, from the far right to the Trade Union movement’s leadership. This claim we know to be illiterate in terms of social welfare, distribution and ecology but could an economy actually function without growth?

There have been attempts to answer this question by ecological economists Peter Victor and Tim Jackson. Victor conducted macroeconomic modelling based on the Canadian economy to demonstrate that growth is not necessary to prevent poverty, unemployment, and economic collapse. Jackson used this material in his Prosperity Without Growth report and book.

But it has also been argued that capitalism relies on, is for the purpose of, capital accumulation and therefore has a built in requirement for growth. However, it is instructive to look at what is by most accounts a successful modern developed economy with low growth rates to try and understand the issues. What follows is an initial look at some of the statistics about the German economy, in comparison with that of the UK, in relation to this question.

click to READ MORE (.pdf document) Germany as a case study in post growth

Manchester’s new housing deal: more questions than answers.

Manchester City has signed a new housing deal with Manchester City! Yes, that’s what we said, where “Manchester City” of course means Manchester City Council and strangely enough (in Manc. English) “Manchester City” also means Manchester City Football Club.

Even stranger, that football club is owned by an investment company the

On the right, Sheikh Monsoor, whose company Manchester City Council has signed the deal with. (via wikipedia)

On the right, Sheikh Mansoor, with whose company Manchester City Council has signed the deal (via wikipedia)

Abu Dhabi United Group, the personal fiefdom of one Mansoor bin Zayed bin Sultan bin Zayed bin Khalifa Al Nahyan, Deputy Prime Minster of the United Arab Emirates, the federation of small absolute monarchies on the Arabian Peninsular, with innovative social policies such as the use of torture, capital punishment, high levels of labour exploitation, and 14-year prison terms for homosexuality. It is also the country with the world’s highest per capita ecological footprint, although reported to be concerned to reduce it.  It is actually with this company that the deal has been signed.

According to the council’s news story:
The partnership will see, as Phase One of the programme, the provision of more than 830 homes in Ancoats and New Islington, bringing significant impetus to both areas and helping to complete their redevelopment. The agreement forms the first phase and foundation of the Manchester Life initiative and builds on the regeneration activity that has been led by Manchester City Council in collaboration with a range of partners over the last 15 years.

The predominantly privately rented homes will strengthen Manchester’s economic growth trajectory by providing much needed residential units, helping the city achieve its Residential Growth Strategy to build tens of thousands of new homes by 2027.

and quoting Richard Leese, it goes on to say:

“Today’s announcement adds another commercial dimension to the already significant investment made by Manchester City Council and ADUG in East Manchester, and in doing so progresses the regeneration story which began in the 1990’s and was accelerated by the 2002 Commonwealth Games and ADUG’s recent development of the Etihad Campus.

“The planned transformation of the eastern edge of the City Centre is the single biggest residential investment Manchester has seen for a generation. Building thousands of quality new homes will be a fundamental part of our growth story and will deliver significant socioeconomic impact. We look forward to working with Abu Dhabi United Group to create a world class exemplar of regeneration.”

Everything else that is available to us public can be found in the report to the Council’s Executive Group this week. Among other things, this gives the background to Manchester’s “Residential Growth Strategy”. There is a further “commercially sensitive” report that we are not allowed to see.

Now, we don’t want to pour cold water on a scheme to provide modern housing in the

It's desolate there

It’s desolate there

desolate areas to the North East of Great Ancoats Street. The Keynesian part of our thinking would also acknowledge the effectiveness of housing construction in facilitating local economic activity, through the multiplier effect of jobs and incomes being created locally. Although the ecological economic part of our thinking would also want to consider how that prosperity could be kept local, instead of leaching out to other economies and to damaging, emission-intense consumption. Moreover, increasing population density in the city could be a good thing, ecologically – although the motives for doing this are as usual tied to the dreary and unimaginative economic growth mantra rather than to any considerations of re-localisation of economic and social activity. But there are some questions that need answers if the Manchester public (and electorate) is to be able to form an informed view about the benefits of the deal.

1) Where is the social housing in the scheme? The documents emphasise the private rented sector. Does a Labour council really want to be encouraging more of this? And are there any plans to follow the example of some of the London boroughs to introduce a mandatory register of private landlords?

2) The documents also talk about stimulating the housing market. Alarm bells ring here for two reasons: firstly, what scoping studies have been done to model the supply and demand for such housing, and what are their assumptions? or are we going to end up with yet more empty properties, as with the boom in office space? Secondly, if the strategy was successful in encouraging a stimulation of the housing market, what would be the consequences for house prices in the city? We know that it is house price inflation that is driving the bubblecovery in GDP in the UK (that and the return to rising personal and household indebtedness). So is the council actually playing with fire here. Wouldn’t affordable rented accommodation in the (now) quasi-public sector (housing associations, housing trusts, arms length management organisations, housing co-operatives) be a better priority?

3) The details of the deal remain completely opaque – to those of us outside the ‘golden circle’ anyway. How much money is the Abu Dhabi company putting in, and what do they expect to get out of it? So can the council assure us that this is what University of Manchester researchers at CRESC call the “social franchise”? That means capturing a share of corporate profits, that owe their existence to the ‘license’ the firms have to operate in the council’s area, something Manchester should be doing with the many companies (especially utilities, supermarkets, and financial institutions) that operate on its territory. Or, is this just another instance of corporate rent-seeking, with the council’s approach being little more than hoping for trickle-down of benefits to the multiply deprived districts of the city? We remain agnostic about this: it could well be a case of the former (social franchise) – but if so the council needs to explicitly state this and explain how the city will benefit. Otherwise we can be forgiven for assuming the latter (rent-seeking).

4) The reports talk about two deals. One is with the Abu Dhabi group. The other is with the Homes & Communities Agency (HCA). This one looks like a pragmatic approach to overcoming the barriers to using the assets from land sales for further housing investment, and to pull in further investment for house building. Again, it would be helpful to know more, and specifically what will the criteria be for:

a) Selecting investors? Can anyone play, or will there be a preferential option, for example, for socially responsible companies, some of which are players in the construction industry?

b) Approving construction proposals? What will be the energy and ecological characteristics of these new housing units?

c) Designing the physical, and most importantly the social dimensions of the new developments? Previous regeneration has emphasised physical regeneration, building, that is, and had little real understanding of how communities work, how they develop, and how real community can be facilitated.

In short, how will this Manchester Place deal secure the maximum social, ecological and economic well-being?
Finally, how will the public interest in these questions be represented?

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The oppression of long working hours

Employees in the UK worked a record amount of unpaid overtime during 2013, with the number of people regularly doing unpaid work at the highest levels since comparable records began in 1998.In the North West we are working at an above average rate of 7.9 hours per week. This is indicative of a workforce here in the North West which is under increasing pressure to work extra hours, without actually getting paid for the work they are putting in. These telling statistics should also be considered in the context of the fact that in the UK full time employees worked the third longest working hours in Europe at the last count. Long working weeks can be typical in a capitalist system where corporations produce items or provide services solely to maximise profit. Or as Marx described ‘ the prolongation of the working day, beyond the limits of the natural day, into the night…quenches only in a slight degree the vampire thirst for the living blood of labour. To appropriate labour during all 24 hours of the day is, therefore, the inherent tendency of capitalist production.’

Adding to this pressure to work longer the two main political parties seem intent on pedalling a ‘hard working families’ agenda. I recently attended Ed Miliband’s keynotes speech on the NHS here in Manchester where I was dismayed to see the words ‘ Hardworking Families Better Off’ draped on all four corners of the stage. As was pointed out by an audience member on the evening this could easily have been a conservative party tag line, whose own MP’s, MEPS and councillors never fail to mention ‘hardworking families’ in any interview they give on television or in the press. It is no wonder then that there seems to have been a cultural shift in Manchester where workers feel that if they are not working long hours then they are clearly not working hard enough and will be caricatured as a ‘shirker’ by peers and colleagues in line with the vicious characterisation by the right wing media in their constant attack on the welfare state since 2010. Indeed I have noted during the course of my working life the tactic of management accusing employees of not working as hard as their colleagues. I often wondered to myself whether every employee was in fact accused of this.

Despite this fetishizing of the hardworking families not one of the 3 main political parties has, at the present time, actually pledged to cap working hours during the next electoral term or even put in place measures to reduce them. This is in spite of the negative health, social, environmental and economic impacts that long working hours have. Without being in any way exhaustive I list a few of the more immediately apparent impacts below:
1. Long working hours for some means less jobs for many. If someone is regularly working 70 hours a week then it should be apparent that in fact there are two jobs available. Reducing working hours would redistribute paid work more evenly across Manchester;
2. There are numerous physical and mental health problems associated with working long hours on a regular basis. These include hypertension, heart disease, fatigue, stress, depression and diabetes;
3. Long employed working hours have an adverse effect on the amount of unwaged ‘work’ we can do which is equally vital to society. For example, we have less time to look after elderly relatives, our children or other friends and family who require care; and
4. John Bekken observes that automation and other innovations result in output per hour doubling every 25 years or so, yet average working hours are not decreasing. As Don Fitz additionally notes as far back as 1989 J.W Smith argued that ‘we could eliminate much industrial pollution and conserve our precious dwindling resources by eliminating the 50% of industry that is producing nothing useful for society.’

A reduction in working hours therefore is vital if we are to cut back on the amount of natural resources we are using when we are currently using the equivalent of 1.5 planets worth of resources each year. Back in May 2013 Steady State Manchester suggested to the Manchester City Economic Scrutiny Committee that a campaign should be launched to ban the opt out option on the European working time directive and to also extend the councils own 35 hour week maximum to its contract partners via its procurement exercises. These proposals would certainly be an achievable and viable short term goal in order to tackle the immediate effects of unpaid overtime. However, if, as Jon Bekken observes, we have been doubling output per hour for the last 25 years then a much shorter week is not only desirable but wholly necessary in order to have profound long term effects on the four outcomes listed above. To this end the New Economic Foundation have argued in fact we should be moving towards a 21 hour working week. That work pattern would comfortably provide us with necessities such as healthcare, housing and energy but would significantly reduce the amount of disposal, consumable items that are being produced and harming the planet. Such a reduction would give people back control over their time allowing them to decouple from carbon intensive past times, care for others and act as equal partners with professionals and other public service workers in co-producing well-being.

The most difficult element of attempting to drastically reduce the average working week would seem to be offsetting the associated drop in incomes. For such a system to flourish for all we would undoubtedly need a more progressive taxation system enabling large scale investment in free public services, as well as the enforcement of a living wage across all sectors. A further, more radical proposal would be the introduction of a ‘universal basic income’ as was proposed at the Future of Work Event organised by ‘We Are Plan C’ in Manchester recently. In other words each person in Manchester would be entitled to a set amount each year from the state which would cover the basic needs such as housing, food and energy. This would be very definitely un-means tested and would be a right with no potential for sanction. With the material necessities in life taken care of it may be that in these circumstances people decide to work much less 21 hours. The crucial element however would be that people would have control over their time and would be empowered to be able to make choices as to how they wish to work and for how long. After all if we are not working for a healthier, happier life and in jobs we feel make a positive contribution to our communities then why are we working?

Robert J Brown

Paradigms and economics

A personal view.

I’m at the New Economics Foundation Summer School at present.  It is providing a useful overview of the dominance of neoliberalism and its ‘colleague discipline’, neoclassical economics, and on some of the alternatives.  It has also assembled a large cohort of activists on economic issues with all the benefits of networking and mutual support that brings.  I don’t agree with everything I’ve heard, but that’s inevitable – we will have differences of emphasis and analysis.  But that’s not so important – this is about building a movement with an alternative, credible story – what neoliberalism itself did.

Meanwhile, the discussion of the challenge to the University economics curriculum continues  The impressive report by the University of Manchester Post Crash Economics Society (some of whose members are here), with a foreword by Andrew Haldane, one of the Executive Directors at the Bank of England, no less, has been downloaded 12,000 times in a few weeks.  Robert Skidelsky in an article HERE asks why neoclassical economics is so impervious to criticisms.  This version of economics, as a technical, scientific, value-free discipline dominates the curriculum, to the extent that even classical economics (Adam Smith, Ricardo) and Austrian economics (where Hayek, father of neoliberalism fits) are not really covered.  Skidelsky suggests, that in addition to being embedded institutionally,
“…it has become an article of faith that any move toward a more open or ‘pluralist’
approach to economics portends regression to ‘pre-scientific’ modes of thought”.

As Thomas Kuhn suggested, mature sciences cohere around an agreed paradigm, with agreement on the boundaries of the discipline, the key issues, the principles and concepts to be deployed, and they have their artefacts that go with it (their research technologies).  They go on like this until the paradigm comes unstuck – think of Newtonian physics and Einsteinian physics as two successive examples.  But that doesn’t mean a discipline can adopt the clothing of a paradigm and thereby become a science (“normal science” in Kuhn’s terms).  This is effectively what neoclassical economics has tried to do, as if by freezing out alternative paradigms, such as Marxist economics, Ecological Economics  or Post-Keynesian Economics, and pretending that economics has nothing to do with ethics and values, it can truly become a science.

Alternatively, just maybe, an alternative theory of science helps us understand what’s going on. Imre Lakatos, in his theory of Scientific Research Programmes, suggested that such tendencies are organised around a hard core of concepts and principles that stays largely unchanged as new information enters the scene.  So Newton’s programme (think of the 3 laws of motion, linking mass, space and time) was ‘progressive’ leading to many more discoveries, novel findings, until it came up against the issues raised by nuclear physics and cosmology.  Then it started to degenerate, adjustments being made to protect the theoretical core, but that merely shored up the model, not leading to any novel discoveries. At that point a new research programme emerged, with the theories of relativity at the core, that included but reframed and went beyond Newton’s core.  And (if my limited understanding of modern physics is correct) it continues to produce new discoveries; it is a progressive, rather than a degenerating research programme.
So maybe, just maybe, neoclassical economics was a research programme that worked OK within the limited world of neoliberalising economies from around 1979 to 2008.  Come the unexpected, unpredicted crash, it was revealed to be a degenerating research programme whose core assumptions were false, and which endlessly produced a protective belt of, frankly, post-hoc excuses.  It was relevant only to a weird subset of economic problems.
Whether the Kuhnian or Lakatosian view is adopted, neoclassical economics is dead.  It will carry on going through the motions for some time.  Its priests will continue to mumble their way through the rituals, convincing fewer and fewer people.   New leases of life will be granted, as in the current bubble recovery based on expanding household debt and house price inflation, but these will be temporary.  The coming crash will maybe put the final nail in the coffin, but that doesn’t mean that some of the tools of mainstream (neoclassical) economics aren’t useful so long as their assumptions as properly understood and subject to challenge.

Meanwhile, let’s repeat together:

- Economics is everyone’s business.
– Economics is a matter of ethically based policy choices.
– Economics is political: The economy is a terrain for struggles for resources and power.
– The economy is a subset of society and its context is the environment, the very basis for human life.
– The market is a helpful tool but a bad master.  Community and government are at least as important as steering mechanisms.

Mark Burton

Why is Manchester falling behind on its carbon reduction targets?

Yesterday evening, 10th June, 2014, I attended the “Manchester, A Certain Future AGM”. MACF is the name for Manchester’s climate change action plan that 5 years ago ambitiously set out to reduce Manchester’s direct greenhouse gas emissions by 41% over the 2005 levels.

This was the first such AGM, more in fact the public presentation of its first Annual Report, available HERE. This is a welcome step as was the frank and honest presentation of the achievements to date. The new chair, Gavin Elliot pulled no punches and the responses to questions from him and the panel of Steering Group members and chairs of working groups was similarly open and non-defensive.

The headline news is that while there have been a number of positive developments, well summarised in the report, the city is falling behind its target emissions reduction. The data are somewhat difficult to interpret, depending in large part on nationally collected statistics and various assumptions, and the annual report does not really explain just how its figures have been derived. But the conclusion is that on present trends, the city would only reduce its emissions by 2020 by 27%, not the 41% it aimed for.

As Kevin Anderson repeatedly points out, it is the cumulative emissions that really matter, the stock of CO2 we put into the atmosphere, rather than the flow at any particular point – in other words, the area under the curve is the critical figure and the sooner we start making the radical emissions necessary, the easier it will be (which is not very easy at all of course!). Taking the data in the report (page 11), we can compare the area under the two trend lines. Over the fifteen years from the 2005 origin point to 2020, the cumulative target reduction was 9,993 kilotons of CO2 equivalent. On present trends the reduction will be just 6,581 kilotons, a shortfall of 34%.

emissions in year Cumulative emissions saved
Year 2005 2013 2020 2005-2030
Actual ktCo2e 3250 2790 2372.5 6581.25
% of 2005 100.00% 85.85% 73.00%
% reduction 14.15% 27.00%
Target ktCO2e 3250 2550 1917.5 9993.75
% of 2005 100.00% 78.46% 59.00%
21.54% 41.00%
Shortfall ktC02e 240 455 3412.5
% shortfall 9.41% 23.73% 34.15%

Why is Manchester struggling to meet its target? Some reasons are outside its control. So the increased reliance on cheap coal to power the UK’s electricity (in part because of its displacement by unconventional oil and gas in North America) has increased the carbon intensity of the electricity Manchester uses, despite the solar panels on middle class houses like mine, and social housing such as those managed by Northwards Housing and the growth in wind farms off and onshore. In fact per capita, Manchester seems to be doing quite well, since its population has been growing since 2005, which would, despite the increased efficiency of living closer together, meaning more people consuming energy and thereby producing emissions.

But the first ‘elephant in the room’ was the growth in the size of the economy. As we’ve explained many times, nowhere has yet managed to do more than relatively de-carbonise a growing economy, which is to say that despite gains in efficiency, as the economy grows it uses more hydrocarbons and emits more greenhouse gases. As the report points out (page 17) the level of economic growth (as ‘measured’ by Gross Value Added, GVA) aspired to here means that rather than a 41% cut, a 54% cut in emissions (per unit of GVA) will be required to meet the target.

The second elephant is that these data, and the targets and performance they describe, concern direct emissions, and ignore the total emissions that we outsource to things like aviation, shipping, agriculture, deforestation and wetland destruction, oil extraction and refining, elsewhere in the world to support our high consumption lifestyles.

I raised these points in a rather convoluted question, and to be fair, the responses accepted the problem, while noting that there is still the possibility of accelerating impacts from mitigation measures, and that we do need some kind of economic development to address the social problems of the city (which of course we agree with, but we frame this not in terms of growth but in terms of an economy that serves local people without harming the planet).

And as Tony Juniper, the guest speaker of the event pointed out, after 2020, the goal will have to be a 95% decarbonisation of the economy in order to stay within the, just possibly, safe 2 degree global warming limit.

It is looking more and more that this all means putting our economy and our society on something like a ‘war footing’. Think of the way this country responded to the Nazi threat 1939-45 by a massive restructuring of how people lived and worked, of how the economy functioned. Manufacture in Trafford Park, for example, was transformed for armaments production in a matter of months. The Soviets did the same thing, to a greater degree, building a whole new economy east of the Urals, but with authoritarian methods. In neither case, nor in the USA for that matter, was it all left to the market. In the UK, there were two big benefits, despite the huge loss of life, and severe damage to many people’s lives. Firstly there was a transformation of the nation’s diet, with the population probably physically healthier than it has been since. Local and national production of food was a major contributor to this. Secondly there was an upsurge of the practice and values of social solidarity, which in effect became the official policy and ideology. That set the scene for the social democratic welfare state and what now look in many respects like the golden years of my childhood in the 1960s, achievements that have been eroded by our governments since the neoliberal turn of 1979, with the present orgy of austerity being the mould (rather than icing) on the cake.

Manchester, Britain, and the world can make the necessary changes to our economic model now, or wait until the climate crisis, and the other ‘planetary boundary’ crises get so bad that only an authoritarian State will be able to fight a desperate rearguard action. I know which course most of us would prefer, but fear that short termism and the inability to think our way out of the present orthodox economic and social model of globalisation, markets, growth and inequality will make it unlikely that we’ll do this. But that’s what Steady State Manchester continues to work on, along with the MACF coalition that despite the bad news seemed to take renewed inspiration last night.

Mark H Burton
Member of the SSM collective.

The Viable Economy: let us have your thoughts.

updated with summary of headings, 10 June, 2014

Steady State Manchester is working on its new publication: The Viable Economy.  We are using this title to both give a positive message (rather than the negative, but necessary steady-state one) and to emphasise the need to align the economic, the social and the ecological.  No economy can survive that is not viable in all three domains.

Work has started (see the outline structure below, under the response form) and we will be sharing our work as we go with associates and friends and seeking advice, as before from experts we respect.

We also want your thoughts as someone who reads this blog:  what do you think we should emphasise?  How might we best get the message across?

We’ll be building on our previous work, including In Place of Growth, since we’ve learned a lot in the two years we’ve been going.  But maybe you can suggest some essential reading, links, and practical examples that we might otherwise miss.  And of course we will acknowledge people’s contributions when we finally launch the Viable Economy.

So let us have it!  – Thanks.

Provisional outline of The Viable Economy

1) Introduction:
Social malaise: the dissatisfaction of everyday life. Personal and collective ‘ill-being': stress, pointlessness, speed, insecurity, lack of social solidarity. The corrosive troika: Privatization, marketization and financialization. A convivial alternative.

2) What is the Viable Economy?  a summary of its characteristics

Economically viable
An economy that is resilient in the face of bubbles, crashes, supply chain interruptions and the whim of National governments.
More money staying local and more control over savings and investment.
An economy that delivers (and measures) what we need rather than growth for growth’s sake.
A balanced economy without the hyper-development of some sectors.
An economy that does not have to keep expanding, although where some sectors will grow,(e.g. renewable energy) and some must shrink (e.g. fossil fuels).
Where needed investment comes from within rather than from exploitation of other peoples or as profit-seeking from external investors.

Socially viable
Control over the economy rather than the economy controlling us.
An economy that relies on and builds equality, solidarity and cooperation among people, here and elsewhere.
An economy that rather than increasing inequality, progressively becomes more equitable.
Less exploitation of the majority world while keeping open channels for communication and learning globally.
An economy founded on stewardship of human and social capital, that does not waste people’s energies and talents, that includes everyone.
With an increased space for non-commercial transactions: the collaborative or solidarity economy.

Ecologically viable
Radically reducing both the exploitation of finite resources and the emission of pollutants, including greenhouse gases: a one-planet economy.
Based on production and consumption for need: a frugal abundance.
More security for us all because the environment is protected from further destruction.
Resilient to climactic and other ecological shocks.
An economy that practices stewardship of the natural world that we depend on.

3) About growth
Good and bad; clarity around need for selective growth Criteria for good selective growth – economic/social/ecological. Need to remain within available biocapacity – absolute limits to growth.

4) About resilience
Resilience in the unviable model. Economic, social and ecological resilience. Design principles of resilient systems.

5) About space
Localism and the bio-region – concept of strategic localism and principle of subsidiarity.
The use of space and an alternative vision of Manchester’s geography (including green spaces, productive spaces, living spaces and the connections between them – people flows)

6) About democracy and ownership
Reclaiming control over our economy. A politically and ecologically literate population. Democracy and community.
Ownership of businesses – a still mixed but more social and democratic economy.

7) About investment, money, credit and debt
The present system and its shortcomings – consequences as an unviable economy.
Sources of investment – Flighty FDI versus the endogenous model. Fiat money and its control.
Reclaiming control over money.

8) About distribution and equality
The importance of equality and strategies to improve it.

9) About work and income.
The nature of work in the unviable economy. Work/life balance.
Jobs/employment conditions. Creating decent jobs. Foundational economy. Skills, training and capacitation. Those who don’t and can’t work.

10) About environment.
Resource and environmental considerations (resources and sinks). Material flows. Carbon intensity. Energy efficiency and avoiding rebound. Community renewable energy. Reduction of damage and repair. Stewardship.

11) About Consumerism
Needs, wants, advertising.

11) About progress and its measurement
In this paper we have redefined progress: how would we know if we are moving in the right direction? Alternatives to GDP / GVA. Aligning economic, social and ecological measures.