Prince Charles: rewire the global economy to stop climate change
Prince Charles has said that "profound changes" to the global economic system are needed in order to avert environmental catastrophe, in an uncompromising speech delivered in front of an audience of senior business leaders and politicians.
The heir to the throne – often criticised for his meddling in political affairs – argued that ending the taxpayer subsidies enjoyed by coal, oil and gas companiescould reduce the carbon emissions driving climate change by an estimated 13%.
Although the prince’s passion for environmental causes is well known, the speech delivered on Thursday evening in St James’s Palace, London was particularly pointed in its criticism of companies that protected vested interests and came with a report that proposed raising taxes on them.
Speaking at a event for the University of Cambridge’s Institute for Sustainability Leadership (CISL), of which he is a patron, the prince complained that “the irresistible power of ‘business as usual’ has so far defeated every attempt to ‘rewire’ our economic system in ways that will deliver what we so urgently need”.
He said: “Yet if we are to limit climate change, conserve resources and keep ecosystems functioning, while at the same time improving the health and wellbeing of billions of people – including the several billion who are projected to be added later this century – then we will need to see profound changes.”
The prince also attacked what he characterised as the wastefulness of modern society. “The challenge now is to go much further and much faster, progressively eliminating waste by developing a circular economy that mimics nature’s loops and cycles, rather than perpetuating our largely unsustainable and linear way of doing things,” he said.
The prince’s latest intervention comes soon after the release of 44 “black spider” letters he sent to government ministers between 2004 and 2009, in which he gave advice and requested action from government on environmental and other topics. In that correspondence, released following a 10-year legal battle fought by the Guardian, the prince lobbied ministers for detailed and specific measures including a badger cull.
At the event, the prince unveiled areport from the CISL. It argued the world’s current course revealed “a monumental market failure” and that “there seems to be a strategic chasm between where the world agrees it should be headed and the direction of the economy”. The report made a series of recommendations that would affect business, include raising green taxes, requiring companies to reveal their environmental impacts and ending the damage caused by short-term profit-seeking.
In his speech the prince also noted that abolishing fossil fuel subsidies, estimated at $500bn (£320bn) a year by the International Energy Agency (IEA), would cut global carbon emissions by 13%. He also said cities equivalent to 175 Londons would be constructed by 2050 and that the new houses, roads, schools and hospitals had to be sustainable.
Broad political momentum around the need to tackle climate change has been building in recent months. In a high-profile intervention, Pope Francis also criticised the damage caused by the world’s current economic model. “The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces,” he said in his encyclical in June.
The prince emphasised the geopolitical importance of the issue, and said that “2015 is a vital year for the future of humanity”, referring to a year in which critical UN summits must agree deals to tackle global warming and set goals for sustainable development, including ending poverty, hunger and inequality.
The prince praised efforts to persuade pension funds and other charities to stop investing in major fossil fuel companies, arguing that the divestment movement has attracted broad-based support. He added that it had “sharpened investors’ focus, not just on the risks of holding hydrocarbon stocks within their portfolios, but also to the ever more pressing need to divert vastly more capital into clean energy, low-carbon investments and infrastructure projects”.
He singled out the Guardian’s Keep it in the Ground campaign, which calls on the world’s biggest health charities – the Bill and Melinda Gates Foundation and the Wellcome Trust – to divest their funds from major fossil fuel companies. “The Keep it in the Ground campaign is the first action of its kind from such a newspaper, and has – like the broader fossil fuel divestment movement – focused the mind very considerably as to the scale of the transition before us.”
The dinner was also addressed by Fatih Birol, the chief economist of the International Energy Agency. He said, with the energy sector responsible for two-thirds of all greenhouse gas emissions, that ending fossil fuel subsidies and raising the cost of carbon pollution was essential: “We need to phase out these wrong-headed energy policies and phase in right-minded energy pricing,” he said. Birol added that the construction of highly polluting coal-fired power stations should be banned and investment in renewable energy increased by 50%.
Polly Courtice, director of the CISL, said that while an increasing number of business leaders were turning ambitions of sustainability into practice, “it is undeniably the case that inequality is rising, ecosystems degraded, resources depleted and greenhouse gas levels are increasing”. She added: “Our analysis is that a fundamental rewiring [of the global economy] is required.”
The prince concluded that he thought times had changed significantly during his lifetime and recalled “the Guardian newspaper thinking it was hilarious when I managed to encourage the installation of one of the country’s first bottle banks – which they described as a ‘strange engine’ – at Buckingham Palace 25 years ago”.