Ep10: Angela Francis 'A Green Deal without the Yellow Vests'

Transcript

My guest today on Cleaning Up is Angela Francis. She's the chief adviser on economics and economic development at WWF. That's not the World Wrestling Federation. That's the World Wildlife Fund. She has also been regional economist and climate attaché at the FCO. That's the Foreign and Commonwealth Office in the Caribbean. She was there until five or six years ago, she came back and then she's been working for Green Alliance, which is a think tank working on environment sustainability issues, non-partisan, before joining WWF. I met Angela when we were doing some radio about, I think, originally it was about Brexit. And then we met again, talking about UK politics and the elections. And she struck me both times and in all our interactions as incredibly smart, thoughtful, and she comes at things from a different perspective, from a lot of the usual sort of Oxford PPE, or Brussels technocrats or the equivalent around the world that I tend to meet on my travels. So I've really enjoyed talking to her. And I very much hope that you will enjoy this episode of Cleaning Up. I'm going to get myself my beer. And I'm going to bring Angela into the conversation. So, Angela, good evening and welcome to Cleaning Up.

Evening, Michael, thank you for having me. I've come with my beer in hand.

Oh, what are you drinking? What is that?

Drinking is amber ale. It's a Doom Bar. But I've picked a low alcohol one. Because my drinking days are pretty much over. I know that if I was drinking properly, I would not be doing myself justice by the end of this podcast.

So is that brewed somewhere near Derby? Which is where you're from? Right?

No, I don't think it is. I think I don't think it is a Derby one. I can't claim that I was that organized. No.

Well, anyway, one day, this podcast is going to be sponsored by Heineken. Reaches the beers, reaches the parts other podcasts can't reach. Well, thank you very much for joining me. And as you heard from my little preamble, you know, I've really enjoyed our interactions. We've not worked together on a particular project, but I think your perspectives have always been very refreshing and very to the point. And we did originally, I think, meet talking about Brexit. And so I want to take that as the starting point. And I don't want to relitigate Brexit. But on the other hand, we are still in that process, and it does have implications for the environment, for climate change, for clean energy, all the things that we both care so deeply about. So could you give me a little update, you know: where are we in that process? You know, is it as bad as some people on the green side thought? Or was I right? That actually it frees up, you know, some space for some new solutions and ways of doing things?

I think it's still in the balance, Michael, to be honest. I mean, you're right, from the perspective of Brexit wouldn't have to be bad for the environment. But whether it will be or not, we still don't really know. So I would say that we've seen some good things. So we've seen public money for public goods, shaping the reform of CAP, which was always a terrible subsidy regime from the farming point of view for the environment. So we have something that's actually really radical and world leading, and the public money... for public goods system.

But that's in the agricultural sector, right? So maybe just explain, give a couple of words, because not everybody watching will know exactly the ins and outs of what's happening in the UK. Sort of legislative sausage making process.

Yeah, so public money for public goods is a system of rewarding farmers rather than in the old world, rewarding them for the amount of production, (...) that's a long time ago, then the new world was rewarding farmers by how much land they held. So basically, if you own land, you've got a payment and that payment went to you if your land was used as a golf course, or a horse racing track. If it was land that could be farmed, you got a payment. So that was a flawed system. The new system that the UK is proposing is to pay farmers for the public goods they produce and that public goods is a very techie term, but it means, in this context, the environmental benefits that are good for all of us. Climate mitigation action, clean air, clean water, habitat, all those things that go alongside farming now are rewarded. So you hopefully move towards a much more sustainable farming system. So that has been proposed. We've also got... Sorry, I was gonna say...

Proposed, but not yet fully legislated, is that right?

Yeah, it's still going through. It's going through Parliament still now. So it's, I think it's had at least two goes, because we've had interruptions. And so it's fallen when Parliament's fallen and come back, so...

But it's gonna happen, pretty much we know, right in some shape or form.

We hope so. It hasn't yet changed. And the other thing I'd say that was on the good side was we've had proposals for due diligence around the UK's footprint. So that's like a requirement on companies to ensure that they're not deforesting as a result of their supply chain, that's very good. But I'd say still, we've not got all of the rules and frameworks that will replace what we used to have in the EU, we haven't got those yet. And we're still waiting for those in the environment bill. And we've still got, I would say, a flavor of the type of deregulation. And so the kind of the... some bits of the Conservative Party still hold on to this, I think, view that environmental regulations act in opposition to economic growth. And we have this this idea that we should toss those away. And that's one of the one of the benefits of Brexit. And I don't think most economists believe that. And so we just need to get into a new understanding of why those environmental regulations are good for the economy. And we still haven't won that case yet. So yeah, very much in the balance. We've got some good stuff. And we've got some bad stuff. And I think we're going to come to this, I'm sure. Trade is the real jeopardy point, trade deals are real jeopardy.

So we got this, and there's three pieces and then we will come back to all of them. There's the trade piece, there's the kind of all environmental regulation costs money piece, and then there's... But I want to just come back to, you said that we haven't got all the pieces in place of legislation. In particular, I think you're referring to the ability to take actions that any citizen could lodge a lawsuit under the old EU, I mean currently in the EU, but old in terms of the UK's use of that framework. So the ability to lodge a suit against the government if regulations are not being enforced, first implemented to achieve the goals that have been specified but then also enforced. Is that the sort of thing that you're still looking for?

Yeah, so I think there's a proposal in the environment bill, which for the Office of Environmental Protection, which would do some of those types of things. But yeah, we are missing some of the bits of the architecture. The UK needs to replace what we have to give us the same level of protection. So yeah, those things are still in the pipeline. And most of the environment sector would very much like them to have been out of the pipeline. And, you know, in place by the time we will, by the time we got to this point, but a lot of it is contingent on getting the EU deal. These are some of the things that are holding us up.

Although some of that legislation is a backstop that says: okay, whatever the deal looks like, we, you know, the civic society, the public, whoever needs to have a legislative framework to litigate if it's not, you know, if the government doesn't deliver or if anybody doesn't deliver.

Yeah. So it's a backstop and a set of rules and governance that we need to put in place to keep us where we were. So one of the things, I suppose, that happened to everybody in the environment sector as a result of Brexit was, we had been campaigning to go forward and to move forward on climate change reductions, and what we had to do because of Brexit was almost go back and re-win everything that we had won in EU legislation. And that's taken time. And we've got some of it, probably not in quite the same level of legal hierarchy as we did, but we've got some of it. But that time, it's taken four years, has been time we haven't been progressing on other things. And I think that feels like...

Must be quite frustrating, but meanwhile, you know, the UK is the leader on climate action of the G20 and so on. So I mean, you know, you could argue that we've got now over our skis anyway, in terms of action. I'm being slightly facetious there, because obviously, you know, rebuilding an architecture that you felt was already there must be quite frustrating.

Yeah, you're right. We haven't moved back from being a leader. We still call ourselves a leader. I think it's just that the fact that not all of the people who are advocating for Brexit or building the architecture after Brexit...

Let's just come to that second bit. What would you say to those people who still, and I think they're in a minority now, even in the Conservative Party, who still say: all environmental regulation is counter to the interests of not just business, but also consumers.

I think you're right, they're in the minority. And we can make the case because we have the evidence from the OECD that countries with higher environmental stringent regulation have better innovation and better productivity. They invest in R&D, they have more patent applications, they have higher total factor productivity. So that is higher productivity for every input they put into their, into their value chain. And so we have that evidence. And we have the evidence of what we see with our with our own eyes with solar panels and offshore wind, onshore wind price reductions. So you still have that. But we have always the tension with things like the reversal of the zero carbon homes legislation, and with a new planning regulation that's coming through, that idea that we need to remove the rules to get the economy going. And that's going to be a really big issue coming out of the recession, post COVID recession, that we don't get into that trap that we need to cut away environmental regulation to get the economy going, because it's not true. But it's a kneejerk reaction.

So it's almost like Paul Romer was right. And economies grow, you can put restrictions on them, right, you know, environmental regulations, but innovation basically wins out in the in the longer term. And it's actually about your innovative capacity that overwhelms all these other factors.

Exactly. And I think the thing about understanding innovation in the environmental context is it's not magic. You don't get those innovation results from doing nothing. So talking about Romer, there's a great quote that he has about constructive optimism as opposed to...

Conditional, conditional optimism. I love it. Yes.

Yeah. It says: rather than being a kid sitting there saying "I wish I had a great Christmas present", you sit there and you think, "if I get all my friends together, I could build a really cool greenhouse"... "a really cool tree house" I should say. And that's it. That's the kind of idea that you need to do something to make these things happen. And that's, I think, the way innovation happens. It's, I think, you and I probably agree, there are techno optimists out there who are almost saying: we don't need to do anything, and these innovations will solve the problem. And that is not true. You need to be very, very active and innovation can help you solve these problems. But it's not a get out of jail free card.

And what you need is that sort of directed innovations, you need innovation that serves either serves societal good in some way or, at the very least, just to stop us running into the planetary boundaries would be nice.

Yeah, exactly. And this is why trade is so important. Because if we're talking about what drives competition and what drives innovation, on the things that we need to decarbonize next - industrial goods and food, agricultural commodities, those things are very different from what we've decarbonized so far, they move across borders. It's not like the power system, it's even harder than the transport system. Because if you have one country, that is setting requirements for higher environmental standards of food production, or it's putting a cost on carbon for industrial goods, and another country that isn't, you're making your country uncompetitive, and potentially, you know, putting out of business and just offshoring your emissions. And trade is one of those places where it's really important. We've got industry behind us. And they know that if we're going on a journey to green our economy, which we should be, that we understand that for those countries, those sectors that are exposed to international competition, they need to know that they are being supported by a whole suite of policies that make that work and trade feels like, again, like one of those areas you said at the start: in Brexit - do I feel like it's going well or not? Well, trade is really not working at the moment. We have not got a good reassurance that our trade policy, as far as we've got one, is being developed in thinking about how it's going to work for the transition, not at all.

So, because obviously, there's a huge number of moving parts in the Brexit negotiations, but even just in trade alone the question is: do we, you know, do we do a US deal before an EU deal? Do we do other countries first sort of, you know, mop up a bunch of smaller deals - Japan, Australia, whatever. And I guess one question is: do we have any choice in all this? I mean, does anybody have agency or is this all just a big kind of chaotic, you know, ball of wool...

Feels like a chaotic ball of wool at the moment, but we definitely got agency. We, you know, one of the things that we should be doing is deciding exactly those sets of questions and what it feels like we're doing is putting ourselves in an almost unprecedentedly complicated situation. By trying to do all these deals at the same time, and it's almost as if our environmental policy is going to be the outcome of what we get in the negotiating table. So if we a good deal with New Zealand, but we can't quite put push the Americans to where we want them to and the EU won't move for us, that'll be the result. You don't do it that way. We should be going in with the idea of what are we trying to achieve, and then coming out with something that works for our economy. And for me, our economy has got to work by aligning with our environmental goals, we should be looking at how do we move to a more resilient, stronger economy. Because it's based on low carbon, because it's based on nature. And we are just kind of putting all those things on the negotiating table and sort of working it out as we go at the moment.

But when you say "we should be, we should be", actually "we have to" because we've also got legislation that says that we're going to be net zero in 2050. So now, I don't know technically, you probably know this, does net zero, include the imported emissions from our trade or not?

No, it doesn't. So no, that's one of the interesting questions, I think, about how we think about trade. So we have a consumption footprint. And we've got our production footprint. And our net zero target is set around our production footprint. So that is our territorial emissions. And those have, as you will know, reduced by I think it's 40%, 44% since 1990. But our consumption emissions, so if you take everything we consume, and some of that stuff we consume we produce ourselves, but a good portion of it is stuff we import. We import electronics, we import fashion, we import food. Those emissions from everything we consume have only gone down 15%. And they've mostly gone down in recessions, they haven't really gone down because we were buying in a better way.

Well, hang on a second because they have gone down. If you go from, I think it's 2007 or 2008 in the UK, they've gone down not just because of recessions, they've gone down because they've gone down - largely decarbonisation of electricity. But I mean...

That will have, so you will also see... so where other countries have electrified and moved away from coal, you will see that in our emissions. But we do need to take more responsibility for what we are buying. So yeah, you...

Actually I don't disagree. The reason I jumped on it is because there's a whole bunch of people out there, those are the degrowthers, who will try and prove that there's no such thing as absolute decoupling, that you can't have economic growth and economic activity whilst also reducing your footprint. And they'll point to these data, usually they'll go from 1990 to 2010, or 19..., you know, some years either side, and they'll say: oh, you know, it can't be done. And what they hate is when you say actually from about 2008 or 2009, yes, a recession initially, but then afterwards, really falling away during a period of economic growth. The developed world, not just the UK, but the EU, the UK, US has actually seen absolute decoupling, even when you take into account those imports, so I'm not trying to school you because I think you know all this, I'm just making it for our audience. I know, I always take this opportunity to kind of make sure they know that absolute decoupling is happening in the developed world.

It is. So we can talk about the details. But I think one of the things that's important from a trade perspective is understanding that trade is a little bit like a leaky bucket. It's that bit where if you have carbon leakage you've got carbon you're responsible for and the bit that I'm interested in from a greening our economy point of view is where we have a problem with industrial competitiveness. Because we are asking, for example, a UK farmer who are already doing, some of them, highest environmental farming in the world and that's not great, because farming is really... has got a long way to go, but the UK and Europe have been better than most. We're asking these farmers to go much, much further and much, much faster in decarbonizing the food production and preserving nature. That's a really hard job. We cannot ask them to do that, at the same time as saying: doors are open to countries that are not even playing the same game. It's, you know, that's their decision. But they don't get access to the European, UK market if they're not taking those problems seriously. And that's, I think, where trade can potentially mess up our domestic carbon reduction plans.

Is the answer, and the EU has already said it's the answer, the US, well, a lot will depend on the election but is the answer carbon border adjustments? And my follow up question, I warn you, it's going to be: and how are those going to work?

Yeah, so I think that's one of those, the perfect economic solution, like we would love to have carbon border adjustments. As soon as we can get there, that's great. They are a long way away, particularly for things like agricultural products. So I think...

You mean politically or just in terms of methodology?

Methodology. I mean for industrial goods, we might be able to, I think that's where the EU is proposing them on, you know, steel and energy intensive industrial goods. On commodities, agricultural commodities, we're miles away in terms of methodology. I think in terms of our own production emissions, I think this is right, our own footprint calculation, sorry, not footprint, our own emissions inventory for livestock just estimates emissions based on head of livestock. Really, we don't really have great methods for measuring our own impact, let alone trying to compare another country and doing some kind of adjustment. So I think that's a long way away. So I think these interim steps are, and looking at where we are now and making sure that immediately after Brexit we don't go backwards. So we don't start importing things that currently are not legal in the UK. So commodities that have got very high pesticide use, commodities that come from very intensive systems, and the proxy for that is very poor animal welfare. Those things are typical of very industrialized systems, which we're trying to move away from. And it doesn't make sense to ask the UK farmers to try and compete with that, at the moment you want them to do something that's pretty innovative and interesting, in how we can farm differently, potentially those farmers also getting carbon credits, getting biodiversity credits is a completely different world, in land management. It's quite exciting. And the UK could be really good at it. We shouldn't undercut that. So the way I've been talking about this is: if in terms of Brexit, we're so excited sometimes about, you know, getting the divorce from the EU and throwing all the rules and regulations away. We're running down the aisle to now sign up to the new marriage with the US and they've got rules and regulations as well. And we should be sitting back and saying: which of these rules and regs work for us? Not throwing ourselves out of an EU relationship and into a US one. Because there are compromises everywhere. Your point at the start? You know, can we decide what to do? It's really hard. You know, in the international trade world, there are two big regulatory superpowers - the EU and the US and the UK needs to decide where it is best placed. And it doesn't have to choose now, but it needs to be very careful about deciding sector by sector where its interests are.

And then it is such a sort of nuanced and complex and interesting situation. Because we've got the kind of... I mean, essentially, we want sort of, we want to do what we do, and we want to do the right thing. We've got our net zero, and I do believe that the majority of not just the public, but also lawmakers are, you know, are trying to figure this stuff out. But then we've also got these trade discussions and then it all gets boiled down to chlorinated chicken. It can't surely just be about chlorinated chicken, that is such a one-dimensional trivial way of thinking about this. Or is chlorinated chicken, the sort of the anchor species on which you can hang all of these discussions?

No, I don't think it's a keystone species.

Keystone, that's the word.

It's something that people can get their heads around. And it's not a surprise that food and farming has become the issue. Food and farming have taken down every trade talks that ever failed. So you know, the biggest trade rounds that happened in the world, the General Agreement on Tariffs and Trade, the GATT rounds, Doha was the last one and it fell on food and farming. You really get into people's cultural understandings and their values; trade is not enormously well set up for this and another set of our values now are environment. And the trade system is quite a long way behind on this. They are ready to catch up but they're going to need some countries do some innovative things. And I think the UK is actually one of the countries that could do some innovative things because we have the Climate Change Act, because we've got commitments on renewables, because we've actually got a electricity market that's doing interesting things. We've done all this stuff. So if we are to say: okay, we aren't accepting products that don't meet our standards, we are completely even handed domestically and with overseas markets. And that's where trade falls into problems - when you're being protectionist. We wouldn't be being protectionist, we'd be actually saying: we want to compete, but we want to compete with countries that are doing, trying to address the challenges we're addressing. This is the future of our economy. These are our values. We see economic opportunities here. Let's collaborate, let's compete with people who are doing the same thing, we're not interested in collaborating with somebody who's doing yesterday's farming or yesterday's version of energy production, that doesn't help us, that doesn't help us get where we need to go. And that's, I think, a good opportunity for the UK to really prove, after Brexit it is going to be a leader, because trade is kind of the hard nut to crack, and we actually are in quite a good position to have a good go at it.

For a while I thought we could end up with an environmental goods agreement. So you've talked about GATT fell over. And, you know, in my version of things, it fell over, because these sort of massive "all things to all people" deals, you know, whether it's the Rio, Rio 1992, or whether it's GATT or, you know, it just becomes really difficult to get everybody in the same room. And people get, you know, that have their own agendas, and it gets quite sort of emotional and social media doesn't help people to negotiate anymore, because everything, you know, everything leaks instantly and becomes tribal. But the WTO tried, Pascal Lamy put all his eggs at that point into GATT and failed. And then there was a period where there was sort of this enormous search for what should come next, because the WTO really kind of lost confidence then. And one of the things that I worked on was this what eventually became the Environmental Goods Agreement. And it came out of some brainstorming in Dubai, but under the auspices of the World Economic Forum. And, astonishingly, it sorts of got momentum. And it really got to the point where there was a negotiating text and square brackets and everything 2016. And then the Chinese killed it for whatever reason to do with, you know, President Trump being elected or whatever. Now, a few countries have gone ahead and signed something, I think New Zealand and a few countries. Is there any chance? I mean, do you see life in that sort of, you know, trade discussion at all? Or, you know, is there going to be Environmental Goods Agreement 2 that might actually get across the line?

So, I didn't know you were so involved in that. I don't know as much about it, to be honest. I've been much more interested in UK trade negotiations. But what I do know is that original version and the Asia version of Environmental Goods Agreement, both exist. I think what the Asia agreement had more bicycles in it, that was one of the things that was a difference. It was there was lots of strange, strange things. I think it's very, a very useful thing to take forward. And my only concern is that we put all of our environmental ambitions in an environmental goods agreement. Because as you know, it's got things in there that are for, you know, environmental cleanup, it's got environment technologies, but it doesn't have for example, it would be very hard to define in that, low carbon steel. Steel is steel. What I'm interested in is a trade system that encourages us to move to a lower carbon version of products that are otherwise dirty, as opposed to define, you know, a discrete set of green goods. Because a carrot or a piece of beef could be green or not green, depending on how you produce it. And that gets into the production methods conversation, which I don't think we should go into. But that is the nature of how we are encouraging the right types of competition in production.

But don't we just go to the EU and say: well, according to this taxonomy, could you just tell us whether this carrot is a clean carrot or a dirty carrot?

So there's lots of debate, there's been over years about how you get process and production methods and, you know, if it's produced in another country and the environmental effects are in that country. There’re not very good rules at the moment to say why I should care about that, like what rule, what permission I have to legislate on what you do in your own country. And that's when things like climate are starting to stress the system. Because obviously, we do care from a climate point of view, we also do actually care from a pesticide point of view, if it's polluting the rivers, even if that river is many hundreds of miles away. So this is out with anything I'm doing, this is like the next generation. 21st century trade agenda is going to have to address it, exactly the things that you're raising. And environmental goods will be part of it. But it's also going to be how does the trade system help us achieve net zero as opposed to sitting there and being supposedly neutral, but actually getting in the way quite a lot of the time?

Well, this is fascinating, because I've been saying for probably over a decade, that climate change is actually trade policy. It's nothing to do with the environment, it's trade policy. I mean, it's to do with the environment, but it should sit really, in trade policy because that's where it's gonna get really... that's the truth moment. So you've just laid out...

If you were getting economic advantage, if you were in access, and if you're in a lower tariff, because you had a lower carbon product, you would see things would start moving in a way that you just don't see in a domestic agenda. So I totally agree. I mean, there's so many bits of what we call environmental policy which are industrial policy. It's trade policy, it's housing policy, you know, we need to get ourselves out of environmental silos and into where are the big shifts going to really happen.

And particularly, what we need to do is, you need to go to Australia, because, you know, I talked about clean energy superpowers where you've got, you know, $20 per kilowatt hour wind and $20 per kilowatt hour solar, and they are either co-located or you link them with high voltage DC. And they will produce massive capacity factor smooth between the two of completely, you know, clean energy for industry. It's gonna be very difficult to beat those as exporting powers. And yet, Australia says: no, no, we want to stick to exporting coal. And you sort of tear your hair out at that point, because it's so myopic. We have similar things in the UK, a little bit, but nothing quite as stark as that, but you've just laid out really the agenda for sort of, how can I put this, you know, COPs 30 to 50 will be all about trade. Right? According to your...

Yeah, well, quite possibly. Once we have... Power is moving incredibly quickly, and it's been a huge success story. Transportation - you largely do with domestic policy. Okay, the vehicles that get produced, have global supply chains, but you can designate what you want there. Once you get into goods that move across borders, you're in trade policy.

And also long-distance transport, because I've been talking a little bit about potentially using induction charging or catenary charging for long distance freight. And that's great, you know, we could just do that, frankly, that's going to be cheap and effective. And if you've got clean electricity, it's a great solution, probably, it's probably going to turn out to be the cheapest. But you can't do it domestically in Europe, you know, you might be able to in the US, big countries could, but we won't be able to. But yes, other than that you're moving into sectors where trade matters, really matters.

Exactly. So I mean, we can talk about different sectors, and you know more about those things than I do. The thing that I think I'm interested in at this time is, how is the UK, with Brexit, with COVID, how are we going to make the green transition feel like the right answer for people. When people have got other things on their minds. It sometimes feels like the thing we said at the start, that you just kind of want to get back to normal as quickly as possible. And I think it's our job as environmentalists, so my job in WWF, to talk about why there's actually a better version, don't go back to where you were, there's a better thing out there. You know, lower price electricity, cleaner air, better energy systems that we can move to, and now is the time to do it. Because we're going to be spending so much money to put the economy back on a good footing, we need to spend it on encouraging new <inaudble> of systems change.

So that brings me to, and this is the topic of your brilliant TEDx speech, which you did in January this year, I believe, and we'll put a link in the notes so that anybody who's watching this, who thinks: oh, I want to watch that, they absolutely should. When you talk about, you know, all this is well and good. But if it doesn't speak to the person who..., not the technocrats working on climate or the environmentally concerned with secure jobs. But if it doesn't talk to the average person in Derby, or in wherever around the country, then it's just not going to happen. And then you give some ideas about how to, you know, how to get around that. So can you reprise, you know, tell us how you make, how do you square that circle. That the things that you want to do, that they might initially cost a bit more, but you've got to sell them to people who have other more urgent and pressing concerns economically.

Exactly. So I think, it's a weird thing to say, but I think it's quite good for the environment sector to have been knocked off the top spot by Brexit first and then by COVID. Because there was never a time when we were going to breeze along for 20 years, with climate change being the most important thing that everybody would do, and nobody cared about anything else. And this was all that you could get, you know, you can get all the Prime Minister's attention and all civil service attention for your issue. That never was going to happen. But it feels like that's what we've been trying to do all the time. And we've been speaking to, as you said, the environmentally concerned, the technocrats, we've been speaking to the people who understand that problem. And we have failed to speak to people who have got other problems in their life. They are living in a town that, you know, de-industrialized, maybe in the 70s or 80s. And they have got a crap job in, you know, a call center or some kind of, you know, low level sort of service job with no prospects. They can't afford a house. And if they could, they can't afford the bills in that house. So all these things are weighing on people's minds. And those are legitimate problems that that person should not be asked to put to the side and then focus on climate change. Because obviously, climate change is important, but we need to find a way of saying, because we've done the analysis: we know that a low carbon world and nature restored world is better for everybody. It's particularly better for the poor in every country, better for the global south, but it's better for every... because the poorest always suffer the health problems...

Okay. All of this is good. But I've heard it, you know, lots and lots of times, but the problem is, it's quite easy for it to sort of go into, you know, so you tell that person: you think you've got it bad now, it'll be even worse if the climate gets worse. And of course, that person is like, please, you know, what am I supposed to do about that? You know, or actually probably get more angry, if you look at the Gilets jaunes. Because in a way, all you're doing is piling more stress, more angst and then trying to get guilt on top of it. What do you concretely tell that person? What policies do you give that person? So they can go: oh, well, actually, this isn't in opposition to my, my agenda, my needs.

Yeah, so that's exactly where I go in the TEDx talk. See, you can't give somebody who's got a pile of problems, another problem to deal with. You need to give them a solution. You need to tell them why transition to zero carbon transport or electricity infrastructure is going to help them with their commute to school or their journey to work or whatever else. I mean, why is it going to be better for them. And it needs to be a direct, immediate benefit, not some, you know, future promise in 20 years that they will feel better. So I think one of the things that's really obvious, it's a very big part of the economic recovery package, I think all the analysis shows that energy efficiency and housing is an absolute win in terms of jobs, first of all. But it's also something that you can do that gives people a lower bill immediately. So if you can, it's something that pays for itself. It's just a case of the front loading the finances, so you can give people who can't pay their bills at the moment, worry about food, or energy bills, give them something that is an immediate benefit. And that makes so much sense in social housing, it makes so much sense if we can get it to people in private rental, who were private renters. Landlords have made a lot of money in the last 20 years. And the least we could be expecting them to do is bring housing up to code. And so that is a better asset for them. But it's also a better property to live in for the for the tenants.

The last piece that I wrote for Bloomberg NEF was about energy efficiency and its role in the COVID recovery. And I call it the Swiss army knife of policy for the COVID recovery. Because you put people to work, you put money into the pockets of people who will pretty much immediately go and spend it. Builders, plumbers, you know, the trades, they, you know, these are not people with vast savings. So they'll spend. So you get the short-term multiplier, you get a long term multiplier for more efficient assets. And you also get the climate benefit. So it's a kind of a win, win, win Swiss army knife. And it's great. And I guess it's a bit harder to find... okay, what's the equivalent for that in transportation or in electricity supply? You know, but in principle, I think your approach is absolutely spot on. I don't know, do you have any other examples of policies that you could immediately roll out, that will have the same effect? Maybe electric charging? I don't know.

I think electric charging is something, I think thinking about how you might do something in local networks, so combination of electric charging, and industrial sort of centers that could have quite sophisticated energy efficiency and how that might become a kind of a local grid, as a capacity and a balancing system. There's some quite interesting things the UK could do on its grid that would fit alongside having, you know, having to create capacity for electric vehicles, which I think could create some interesting new markets.

Bit arcane for somebody who's just lost their job or is on furlough and worrying about whether their job will ever come back. I don't know. But maybe in principle, you're right because it would spur that kind of local... I got another one for you: sustainable drainage. I'm convinced because, you know, if you look at what's happening, you know, councils essentially have, you know, got rid of all that gardeners and all of that side of things. And they just tarmac over staff because it's cheaper. And then you know, you've got nice, beautiful trees, well, actually, they're are a lot cheaper if they don't exist. And if you have, you know... But actually, all of that activity, not only is it not only is it better to reduce the temperature of the cities, but actually it's a huge job provider for people who are not otherwise qualified to go off and become, you know, policy wonks like you and me.

Yep, I think there's a lot that can happen. And this might be an interesting thing after COVID as well. It's that as people don't need to be near big centers all the time and might spend more of their time working from home, cities will be attracting people based on the quality of the life there. And that's about the public realm. Definitely about the functionality, the coolness, and shadiness of a place, the clean air, those things will become very important and attract them. And I hope towns and cities will be using that type of thing to say: well, you know, be based here, live here, you know, bring your business here, you know, because you can now run everything you need to remotely. and this is a nicer place to live.

I think that was already starting to happen even before COVID, we saw... as an example: I was on the board of Transport for London. And we were, you know, this is under Boris, trying to get the cycle superhighways through against massive resistance from some traditional real estate companies. But what actually happened was that the progressive employers, the Googles, the Microsofts, all of the research, you know, the hospitals with research divisions, they basically said: look, the sorts of people we're trying to recruit, they want a livable city, they don't want a city where it's fabulous if you happen to have a limo or if you go to work in a taxi, but it's bloody useless otherwise. So it was sort of starting to happen. But I agree, I think that if there is a push for working from home, stickiness about working from home, then I think people ought to be worrying much more about what environment home sits in. And hopefully that would be where the economic growth would come from, ensuring that the building works, the street works, the greenness, all those sorts of things. I think I'm doing your job for you, just listening to you, as you say that. I realize why I really like talking to you, right? Because you say those things, but you don't jump to the extreme, and say: so we've got to destroy everything. Because we've got these risks, therefore, we need revolution, we need to blow up the system and build something completely new, which is what a lot of people, I mean not, you know, your colleagues at WWF... But a lot of the environmentalist, the people who are really concerned about these risks, then flip into this kind of apocalyptic, you know, all of these extinctions that they can't prove that are happening, but that they claim are happening. And then, you know, my favorite, which is RCP 8.5, this kind of disaster scenario, where we use seven times as much coal even though we're not, and that we need revolution. But you don't do that, you're prepared. I mean, is it your economic background? Is it your perspective? Why do you not fall into that sort of revolutionary, anti-capitalist trap?

Can I say one thing that we're proposing, then I'll come on to that revolutionary or not revolutionary thing. So the thing that I think that we need to get out of this problem, that we don't fall into that crisis, is something like a fiscal rule or a resilience rule. So we need to reframe how we're thinking about recovery around resilience. So we've had fiscal rules, you'll be familiar with them, for over... particularly since the last financial crisis... have all been about paying down debt, reducing the budget deficit. And those have not put us in a place that we've actually had a stronger economy. We've kind of, you know, taken up a lot of things to the wire. And this recovery has, I think, got to be about how do we spend differently. How do we spend in a way that reduces the risk of the next crisis? And I suppose, with a lot of emphasis on talking to government about why that resilience rule, why a fiscal rule or net zero rule can be sold to the public, as something that is going to make them, make their lives better, the bit we were talking about before. So revolution or reform... I started off my interest in environment pretty revolutionary. I mean, I was a deep green teenager, I was obsessed with the environment and I was quite, I was very concerned. And I studied economics because I wanted to come up with solutions. And I could see that, you know, sitting there as a sort of 12/13 year old watching Newsnight, it was the economists who were making all the arguments and I needed to get into that conversation. That was my motivation. And I think what I've seen is: we're definitely looking at something that is revolutionary, but I call it revolutionary in industrial revolution, it's that type of revolution. I don't see it as overthrowing capitalism, because I think I have a kind of a more technical understanding of what capitalism is. And I can totally understand why people don't like the version of capitalism we have, because it's got lots of problems. I totally agree. But that doesn't mean that an alternative to capitalism, which would be a planned communist economy or something else, but as yet undefined, is a solution. Most of the time, what we're talking about, I think, is a mixed economy. And we're talking about where the state should come in, and where the state can't come in. How does the state facilitate the market? How do we encourage the right type of innovation? And there are solutions to those problems. But I sympathize with lots of environmentalists who probably for years have been told by economists: oh, you can't do that. And then they need another economist, like there are many now, saying: oh, you know, that is possible. That totally makes sense. That's a very good strong economic argument. And this is how you do it. And for a long time, economics was the reason you couldn't save the environment. And we've kind of moved past that now. But there's lots of people who are just railing against: don't tell me I can't, you know, do the thing that I think is important. And I think it's the job of me and other economists who are now working in the environment sector, to give people the tools to say, you know, that there is a revolutionary way of doing things, that doesn't require you to say something that probably will turn a lot of people off and make them feel quite nervous about, you know, what this radical version of the world you're talking about looks like. Because most people want a job and they like the idea of improving prosperity over time. You know, so saying "de-growth" doesn't appeal to them, like, you know, it doesn't necessarily have to be the type of growth we've had. But it could be very, very different. It could be much more about well-being, as well as improved prosperity and trying to describe those things. But be really, really strict that we're not saying here, this is not, you know, a light version, we are still achieving net zero, we are still achieving nature restoration. We just think this is...there is a route to go that doesn't require revolution, not a capitalist revolution.

Yeah. And I think we would, I suspect that we would agree that at the heart of it, what we're really talking about is innovation, because we just need so much innovation right across the board. And therefore, you know, things that, you know, where I come at this, as I said, things that challenge, the ability of our system to innovate, would tend to be, you know, very, very dangerous because we can't afford to have, you know, 30 years of Great Leap Forward, Holodomor, you know, whatever it is, at the end of which we realize that you sort of need to do, you know, you need to return to, you know, communism with the Chinese flavor, or whatever they call capitalism over there. So I'm very much committed to innovating within certain framework, but we've got to steer away from the planetary boundaries.

Yeah, so I think there's a tendency within environmentalism, environmental sector, to put more emphasis on managing consumption, and less emphasis on technology and efficiency, there's more emphasis... The green growth has kind of lost people's confidence. And there's more emphasis on de-growth. But I'm very, very clear for the work I do, that innovation is our territory, we should own innovation territory. And it's about innovation in natural systems, it's innovation in nature-based solutions. And those things can make a return and they should reward the land managers. And those things can happen in a good way. And we shouldn't cease territory to technooptimists or climate deniers who use those things to say: don't do anything. It's not about not doing anything. It's about, as we talked about conditional optimism, that if we put the right things in place, we will get the types of change that we want to see.

Ok, but you've... So you started with concern about the environment. But you've then gone off, you've studied economics, you then discovered that there's a whole bunch of old, how can I put this, old white man behind the curtain who don't have the answers, but then there's a whole bunch of new economists who do. But you've got, you've come to a very different landing point to either most sort of hardcore environmentalist who, I'm afraid, are in the kind of rationing and consumption management side of things, but also a different landing point to most economists. Is that down to your Derby roots? Is that down to family background? Is that down to early upbringing? Or is that just the way your brain works?

Um, it's so hard to explain. I know, I feel like I'm different and I feel like when I landed in the environment sector... I think it's because I started my economics work in a traditional economics organization. So I worked in the Foreign Office, as you said, I was an economist for the Foreign Office, I was looking at our export opportunities, so I was looking at where is the future... Where are the future opportunities? Before that I worked in regional economics. So I was working in the East of England, which, you know, Cambridge, Bedfordshire, Essex, Norfolk, Suffolk, quite a prosperous area. It had huge housing growth. And we were tasked with looking at that housing growth, how it could be sustainable, that was part of our remit. But the biggest bit of the remit was: how do we make sure that jobs come along with those housing? And so we were, you know, it was meat and drink economics work, which to me feels like the problem or the challenges that we face now with the environment. We're not convincing people anymore, that climate change is happening. We're now doing, I think: how do you make this a mainstream issue? How do we turn from, you know, knowing this is a problem to trying to work out what are the sectors and clusters, the innovation systems, the enterprise program, what's the skills training thing. It's becoming normal business and there's not many people in the environment sector who've done that work before. So I guess I'm just coming with a... I had 20 years of doing that work. I was always interested in environment, it was a 5% of my job, now it gets to be 100% of my job, because everybody's at that point that: okay, you know, we want electric vehicle system, we want, you know, energy insulation materials, it's all happening. And we haven't quite got as many people as we need to start thinking about social justice, trade policy, you know, skills training. That's where we need to be now. The problems have changed, and we need new skills to start addressing them.

So, Angela, we're running out of time. We're pretty much of time, but that really encapsulates why I like talking to you so much. Because I tell you, when we first were on that radio show, and I thought: blimey, you know, I'm not sure if you were Green Alliance then or WWF then, I think you were probably Green Alliance, we're gonna get this sort of, I'm gonna get hectored about the financial markets and how evil capitalism is and how we need, you know, and sort of humming the Internationale under your breath. And then of course, you know, instead I've discovered that we just agree on so, so much. We probably don't agree on everything. But we agree on so, so much, that it's always an enormous pleasure talking to you. So it's getting a little bit late, I'd like to just thank you very much for coming on to Cleaning Up. And I wish you the best. And I look forward to our next conversation working on these same issues as we go forward. And hopefully, the country will be progressing towards net zero and a nice smooth Brexit landing.

I hope for that too. Thank you, Michael Always good to speak to you, too. And I know we don't agree on everything. But I always enjoy the conversations both when we do and when we don't.

Very good. Good night, Angela, I'm going to finish my beer and good night to you.

Cheers.

So that was Angela Francis, chief adviser on economics and economic development at WWF. And, as you've heard, she has an extraordinarily clear vision for how we move to a low carbon, net zero sustainable economy, not based on breaking everything and starting again, but on the actual steps that we have to take, whether it's in legislation, whether it's in trade, whether it's in economics, in order to get to an economy that respects planetary boundaries. My guest next week on Cleaning Up is an Australian author and sustainability expert. In fact, you could say that he's the Australian author and sustainability expert. He has written countless books, practical books on how to reduce your environmental footprint as a business, as an individual. He's hosted 115 episodes of Smart Money on Sky News. He has founded countless charities, including way back in 1991, a charity which supports a music school in Armenia. He's got more stories than you can imagine. He's fascinating. He was Australian of the Year in the year 2010. You're going to enjoy next week's episode of Cleaning Up with my guest - Jon Dee.

Ep10: Angela Francis 'A Green Deal without the Yellow Vests'

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