Nick Butler – treasurer of the Fabian Society, chair of the Centre for European Reform’s advisory board, erstwhile chief of staff to BP’s former CEO John Browne – is a worried man. Europhile though he is, the omens look not good:
The European economy is just beginning to feel the impact of Chinese growth, which will add to the pressures already created by America’s powerful and accelerating lead in the development of innovation and intellectual property. In a world where both low and higher value added goods and services are traded through open competition based on price and quality, Europe’s comparative advantage is unclear. We are losing on both sides of the playing field.
The risk for Europe in the next ten years is not one of war or starvation, but of gradual and steady decline, with growing structural unemployment, rising public sector deficits, and an expanding gap between the sense of entitlement felt by ordinary people and the capacity of the European economy to meet those entitlements. The image which comes to mind is the gradual descent to shabbiness of a once beautiful country house whose needs have outstripped the means of its owners.
So in a new think piece for CER, he sets out five ideas for Europe’s future. One of them goes like this:
Given the magnitude of the challenge of climate change, Europe should lead the response, not just through rhetoric and support for environmentally dubious products such as biofuels, but through the development of the science, engineering and technology that will cut hydrocarbon consumption.
To underline its determination, the EU should establish a 100 per cent tax credit for all investment, personal and corporate, in all activity which reduces emissions. The credit should be enduring and would stimulate research, development and application. The businesses created would have the chance to be world leaders and contributors to the necessary global solutions. The cost would be minimal, because of the positive impact on employment and activity, and would be a worthwhile investment when set against the eventual costs of unconstrained global warming.
Know what? He’s exactly right. Europe is, as ever, full of talk and targets and short on radical implementing action – whether you’re looking at Afghanistan, the Lisbon agenda, climate change, connecting Europe with its citizens or whatever. And on climate change, as David Steven and I noted in Climate change: the state of the debate, the problem narrative still isn’t commensurate with the solution narrative.
If Europe really wants to be taken seriously on climate change, it needs to be thinking of actions on a different order of magnitude. David and I were talking just last weekend (at an event chaired by Nick Butler, oddly enough) about just this problem – and concluding that the kind of signal needed would be the abolition of corporation tax, to be replaced by a carbon tax. Just think what that would do to inward investment – and to the EU’s emissions.
