The Mint:                     Brilliant. Good afternoon Christopher. And thank you very much for giving your time to speak to the Mint today.

Christopher Dent:         Thank you very much for inviting me, Henry.

The Mint:                     So as I’ve explained, what I want to explore is the international politically economy in the context of climate change and energy. So not a small topic, but I thought as a starting point, we might first explore how come sort of standard neoliberal thinking or neoclassical economics as to date largely dominated international environmental economics, if you like, or discussions.

Christopher Dent:         Yeah, we’ve even got a name for it, it’s called neoliberal environmentalism. And it’s been theorised about for some time. And if you look at the reports and publications of organisations that publish on those kind of issues, you can still see a very strong kind of narrative imprint of neoliberal environmentalism in all these organisations. World Bank, World Trade Organisation, United Nations, OECD is still very present.

The Mint:                     And is that partly because they employ standard economists who dominate it and that’s the framework they work in? Is it also the countries like that that’s comfortable?

Christopher Dent:         Yes, I think it is, it’s the continuation of the neoliberal paradigm. There hasn’t been anything really that’s seriously challenged it. I don’t think from a global institutional point of view or even from a economics disciplinary point of view. It’s still kind of going along the same track, same kind of vision as to what should be talked about in defining the narrative and the language of how we should frame problems and provide solutions to them.

The Mint:                     Because there was the OECD new approaches to economic challenges unit. Did you come across that?

Christopher Dent:         In fact, interestingly, I did a kind of text analysis of all economic institutions and their work on trade climate issues and the OECD had some of the more interesting kind of quasi alternative approaches and narratives to this. UMTED also did as well on one or two reports.

The Mint:                     It’s interesting because I know William Hines who leads that, but apparently that now has been squashed anyway by the OECD [inaudible 00:02:45].

Christopher Dent:         Okay. Revolution has been squashed.

The Mint:                     Yeah, the revolution got squashed and the director general, the most recent one, an Australian one, is a climate denier and basically didn’t like the stuff coming out for it. But it’s interesting, one element that’s been bubbling away from a long time, hasn’t it, this idea of border tax adjustments, where has that got to at the moment? So it’s a sort of new liberal idea, isn’t it? But it has quite dramatic potential impact.

Christopher Dent:         Yeah, it’s like using market-based instruments applied to managing the pricing mainly of carbon applied to trading activities. So at the moment, the EU, the European Union, which no surprise in one sense because they are the kind of norms leader on climate action and trading climate action. They’ve led on this so far, they’ve got this specific policy called the Carbon Border Adjustment Mechanism policy that they’re currently trialling in terms of trial designing it. Essentially it’ll be based on pricing carbon into international trade in two main ways. One is the carbon intensity of the products being traded themselves. So for example, steel made in China will have a high carbon tariff placed on it because it’s very carbon intensively made.

                                    Now of course that could change if for example the Chinese use something like green hydrogen technology to make emission listlessly produced steel. Currently, the Swedes are the leaders on this globally. And the second factor, which will determine the level of the carbon border adjustment mechanism. Tariff will be the distance travelled, the emissions involved in the international shipping of it. So steel coming from the Netherlands to say Spain, little amount of tariff from that point of view. But anything coming a long distance from say Shanghai to Hamburg, 12,000 mile journey, I think it is, kilometre, will have a much higher CBAM tariff placed on it.

The Mint:                     And so are we just really talking commodities like that? It’s fairly straightforward like steel, whereas presumably if you take some sort of manufactured product like a car or something like that, all the different bits can be made with different things from different places, et cetera. Are they going to attempt to do that on cars or something like cars as well?

Christopher Dent:         That’s where it can get really, really complicated in terms of where the value added content of a product that is shipped. Let’s say if China is exporting cars… sorry, electric vehicles from China to Europe. But let’s say 80% of the value added and also carbon intensity added to the product comes from say 20 countries in the Asia region. The final product is only assembled in China. The kind of carbon accounting process for that will be really, really complicated.

The Mint:                     I mean tracing, most companies don’t even know… only know their immediate supplier. They don’t know who’s supplied to their supply et cetera.

Christopher Dent:         Yes, yes.

The Mint:                     I mean are people thinking about… Are the people jumping to the idea, I suppose a blockchain?

Christopher Dent:         Yeah. This is where it gets extremely complicated. So 40% of all world traders in parts and components, being able to trace these kinds of, as you said, these kind of supplied materials, parts and components through the entire supply chain will be really, really, really difficult. And the European Union, it’s not the only one thinking of devising such a scheme for carbon pricing of trade. But obviously there are countries which are deadly opposed to it because they think it’s some form of green protectionism.

The Mint:                     Yeah. So who are on the different sides of this debate?

Christopher Dent:         Well the European Union are leading it. The UK, Japan and the US are also looking at their own sort of CBAM policies. Obviously China and India, Brazil I think and others who have a cost competitive advantage and many of these more carbon intensive product sectors. They’re going to be deadly opposed to it and it becoming in any way globalised as a norm of trade policy. So I can see quite a lot of tension arising between the major trade powers over this, but it’s all part of a wider process of trying to price carbon into market transactions and production and consumption.

The Mint:                     But truthfully, that hasn’t really happened to any significant effect to date, has it, in terms of real impact?

Christopher Dent:         Oh, not really, I mean it’s very patchy. So you’ve got certain countries who are quite advanced with it and of course the price of the carbon factored in it can be quite high or it can be quite low. It just depends on how much they are factoring in the externalities of carbon emissions into economic activity.

The Mint:                     Because it seems to me, I don’t know what you think of this, but often the sort of neoliberal environmental approach has led to spitting out solutions that are totally politically impossible. So it just generates a huge amount of heat without any light, if you like, that it’s like carbon taxes have been pushed as the solution to everything for two or three decades, isn’t it? And no one’s actually implemented them because actually they never really effectively looking at the political economy and what actually might be powerful and effect change.

Christopher Dent:         Yes. Yeah, they’re very much kind of plasters on a much bigger illness, shall we say. They don’t go to the root cause of, well why are we producing so much carbon in the first place?

The Mint:                     And I’m told, I think this was reported, it’s found in some internal memos for an oil company, I can’t remember which one. But they had were tactically promoting a carbon tax because they knew it wouldn’t work. And so it’s all part of generating grit in the machinery and that ultimately slowing everything down rather than actually addressing the real issues.

Christopher Dent:         The deeper structural and cultural issues as to why we are still continuing with these massive infrastructures of mass consumption and mass mass production still very much structurally based on fossil fuel energy systems. So it is, as I said, putting a plaster on a really large kind of illness or sore.

The Mint:                     And a plaster that never even gets to really work or whatever, just everyone argues about it.

Christopher Dent:         Yeah. Yeah. It’s window dressing really, window dressing.

The Mint:                     Window dressing that everyone can fight about and life goes on sort of thing. So it sort of gets the interesting question, when are things going to get real? I mean it looks to me certainly that things are getting real in the competition over electric vehicles, isn’t it? That the US is belatedly trying to catch up and obviously with batteries being key and minerals in them being absolutely crucial, could they become a matter of national security access to these sorts of metals and what could that mean?

Christopher Dent:         Yes, yes. So green energy is more of a technology base, a kind of sector, whereas fossil fuels are more commodity based. But nevertheless, when you’re manufacturing a number of green energy technologies, you are relying on a number of critical materials like nickel, cobalt, copper, some of the rarer earths that go into making, for example, wind turbines. And it then becomes a question of, “Well, who has those critical materials? How well are our recycling and reclamation technologies so we can actually design recycling into the design of products we’re producing now.” Because solar panels, for example, produced 20 years ago, we’re not designed to be easily recycled. So there’s going to be increasing, I think, geopolitical tension over accessing these critical materials that are vital to the technologies that we need to make the transition to decarbonized industry in societies and economists. They’re only really starting to think about that now. And this has become a real key issue in renewable energy industry and technology development.

The Mint:                     Because as far as I understand it, the US has a list, doesn’t it, of strategic materials and they’ve been adding to this list. But I suppose what they’re going to do about it, I mean, I suppose just because you decide material is strategic, if you don’t have it in abundance or under your control, et cetera. I mean unless you take over various countries or fight, I mean presumably there could be some proxy wars over people who are controlling these materials.

Christopher Dent:         So to wean ourselves off the demand for these materials, we need to be thinking in a much more deeper cultural way. So for example, are we just going to replace internal combustion engine cars on a one-to-one basis with electric vehicles because everyone wants to own their own car. Now that will create a problem in itself for a number of reasons. For example, you need a much bigger grid, national grid to power up, charge up the cars. That grid needs to be charged up itself or powered by renewable energy if you going to make EVs green.

                                    But also, do we want to start thinking about how we can remove the number of very large metal boxes that are completely pervasive throughout our whole society? Can we think of a new way of approaching ownership? Can we use digital technology so we can share vehicles? Because 90% of the time a car is not doing anything. It’s sitting in a car park or on a driveway, on a roadside. Do we need to have so many cars? There were deeper thinking about dematerializing in our society and about trying to think of, do we want to have a mass consumption, mass consumption kind of culture? Can we think of just getting by with less kind of connect to the post growth de growth kind of debates?

The Mint:                     Yeah. Would it be unfair to say that governments to date have shown themselves totally useless at changing culture?

Christopher Dent:         Yeah, yeah. I mean the green growth debate for example, what is it doing? It’s still fixated on growth. It’s still fixated on the culture of mass consumption and mass production. We need a deeper cultural change. And I think the only way that that’s going to happen is if some crises occurs that shocks us into action, that has a jolt on our systems. It could even take some kind of ecological catastrophe for us to really sit up and take a wider look at how we organise our economies and societies and how we approach managing and developing them.

The Mint:                     But I suppose if you look at recently, of course the big jolts, well pandemic followed by the Ukraine war. And I suppose isn’t it a little bit more likely that those sort of human actions might… for instance, if China in their ongoing heightening conflict with the US started controlling the export of these materials to a greater, greater extent, that might be a jolt, no?

Christopher Dent:         I think the Russia, Ukraine war is not a big enough jolt. I don’t think COVID was. I think you need something really mega. I’m not talking here kind of Hollywood disaster movie scale necessarily, but a major conflict. It could have the necessary jolts, but I think we need an ecological jolt, not a geopolitical one to start taking climate change and sustainability seriously.

The Mint:                     But it’s interesting how that works, I mean Australia obviously was a good example of the amazing wildfires.

Christopher Dent:         Yes.

The Mint:                     Affected a huge number of people and sort of blacked out the sun for some period and seemed, this should never happen again. And obviously the fires in the US and the heat dome in Canada, et cetera, there’ve been some pretty basically big ones. But have they fed through?

Christopher Dent:         I think events like that, extreme weather events will help bring about some pace of cultural change. And I’m not saying that you need a mega big catastrophe events to bring about structural change. It just depends on how quickly we think we need structural change and systemic change. There has been of course cultural change on environmentalism over the last 50, 60, 70 years. But still we are stuck in very similar systems and structures to what we have been using for some time now. I don’t know, it’s all quite speculative, but I’m just thinking, having studied these kind of subjects for the last 20, 30 years and seeing no real kind of radical changes, only kind of incremental ones in keeping with the ecological modernization theory of how we will eventually become more sustainable.

The Mint:                     Yes.

Christopher Dent:         I’m not convinced by that argument, that theory. I think that we need a really serious jolt that will help us internationally collaborate. Or even it could be just a kind of club of organisations, powerful ones, could be business, doesn’t have to be nation states, trying to put forward new ways, new alternatives of doing things.

The Mint:                     Are there any groupings you think that are more ambitious, that are arising that we could look to with hope?

Christopher Dent:         Sadly not.

The Mint:                     I’m desperately looking for a bit of good news bit to end this. 

Christopher Dent:         Yeah, I know. I don’t mean to be a profit of doom here, but I mean I study sustainability and business as well as kind of international political economy. And you can see that there are organisations that are quite kind of pioneering and forward-thinking, adopting circular economy model, closed loops to resources in designing waste out of the system and applying that principle to many production and consumption systems. So there are certain technical solutions out there, but I think we need deeper cultural change, the way we think and behave.

The Mint:                     Brilliant. Okay, well let us hope that that comes faster than it has in the past.

Christopher Dent:         Yes.

The Mint:                     But thank you very much Christopher for joining us.

Christopher Dent:         Thank you.

The Mint:                     And look forward to talking further in the future.

Christopher Dent:         Yeah, thank you very much indeed, Henry. It’s been a pleasure, thank you. Thanks for the opportunity.


Christopher Dent

Christopher is Professor in Economics and International Business at Edge Hill University, where he also is Leader of SustainNET – a network community seeking to advance the sustainability agenda. His main …

Read More »

Leave a Reply

Your email address will not be published. Required fields are marked *