June 16, 2022

The cost of living crisis is a climate justice issue - and our government is failing people and planet alike

Written by Jessica Kleczka

The energy price crisis has plunged millions of UK households into fuel poverty. Global energy demand and uncertainties caused by Russia’s war on Ukraine have led to bills rising by an average of 54%, a figure that is set to increase by a significant amount in October, when bills could rise by another £800. Coupled with the highest inflation seen in forty years, the situation is catastrophic for many people across the country.

Those who have contributed the least to this situation are suffering the worst impacts right now, with working class families, disabled people, and people of colour being hit the hardest. Even long before the energy price crisis, marginalised communities in the UK had been struggling to access adequate housing, work, and nutrition, the result of a decade of Tory Austerity policies.

There’s no denying that the cost-of-living and climate crises are intimately linked. The profiteering of energy firms is largely behind the massive increase in energy and fuel costs, yet the UK remains the most profitable country for oil and gas companies. Our reliance on these dirty fuels is driving up bills domestically, and accelerating climate impacts worldwide. 

People struggling to pay their bills have been going to extreme lengths to use less energy - such as spending time on public transport rather than at home. Photo: Rasheed Kemy/Unsplash

Climate change will exacerbate the cost of living.

Climate change is increasingly being recognised as a “threat multiplier”, meaning its effects intensify other global threats such as security, conflict, economic stability, and poverty to name a few. A study by UCL from last year showed that the economic cost of climate change could be six times higher than previously thought, and our economy is expected to shrink by 7% based on current climate policies.

Since 2018, over 4,000 heat-related deaths have been recorded in England alone, with extreme heat events becoming more frequent. Additionally, 5.2 million properties in England are at risk of flooding, escalating insurance costs which leaves low-income households often without protection. The disaster flood in Germany last year showed us that catastrophic climate impacts are already on our doorstep.

Research shows that climate change could lead to crop failures in the UK, causing food shortages and a subsequent rise in the cost of groceries. In a country where tens of thousands of people already have to decide between heating and eating, this is a scary prospect.

A crisis at home

The poor state of UK housing has a direct effect on climate change, with buildings contributing an estimated 15% of total emissions - most of it from heating. The UK has one of the worst insulated housing stocks, and government investment in home insulation would help us meet climate targets and lower bills by up to 20%. But instead of protecting people and the future of our planet, the UK government continues to safeguard the obscene corporate profits gained during this crisis.

Insulation is just one way the government could  create a healthier and more just energy economy: investing heavily in renewables should be at the top of the government’s to-do list. Instead, it has announced a new oil and gas licensing round this autumn, and the recently introduced windfall tax, which offers huge tax cuts for new fossil fuel projects, was a wasted opportunity to get the UK on track for the green transition.

This does not only harm energy consumers but also the oil and gas workers, who have to spend a lot of their own money on continuous professional development. With no government support to reskill for a career in clean energy, many will be left struggling with an outdated set of skills while the UK is overtaken by its more ambitious European neighbours. In leaving behind fossil fuels, we need a just and worker-led transition.

The UK has one of the worst housing stocks in Europe. Image: Julian Hochgesang/Unsplash

Big profits, meagre policies

Our economy is rigged in a way that favours the profits of the few while the many face the consequences. This became all too visible when fossil fuel giants including Shell and BP celebrated record quarterly profits. Rather than taking bold action, Rishi Sunak resisted calls for a windfall tax on big polluters’ profits until eventually crumbling under public pressure. But this tax is no more than a sticking plaster, as it offers generous tax breaks to oil and gas companies - some of which do not pay tax in the UK in the first place. What’s more, the Energy Profits Levy will potentially hand an additional £6 billion in public subsidies to oil and gas companies.

The Jackdaw gas field was approved right before the Jubilee weekend to escape public scrutiny, but was met with resistance nonetheless. The project will not only produce climate-wrecking emissions equivalent to half of Scotland, but also weigh heavily on the public purse: we are effectively paying twice for Jackdaw, once in the £210 million subsidy to Shell to develop Jackdaw (resulting from the new Energy Profits Levy), and again when it’s drilled and sold back to us.

In his Spring Statement, Rishi Sunak reduced the tax on solar panels, insulation and heat pumps from five percent to zero.  But this move, while good for the chancellor’s public image, will do nothing to help low-income households save on their bills. Most will not have the upfront capital to invest in solar panels - nevermind the permission from their landlords to make major changes to the property. This may come as a shock to Rishi, but virtue signalling will not be enough to solve a crisis that was a decade in the making.

This Saturday, Trade Unions and climate justice activist will march in London to protest the cost of living crisis. Photo: Guy Corbishley Alamy Stock Photo

We already have the solutions

Let’s be clear: this isn’t a cost-of-living crisis, it’s a cost-of-living scandal. Despite the Tory government’s claims to the contrary, this energy crisis could have been handled a lot better. Previous zero carbon requirements on new builds had been scrapped, and the government’s handling of the Green Homes Grant was atrocious. Small-scale renewables and community energy have been neglected and underfunded, and the government is now locking us into dangerously expensive nuclear deals which guarantee permanently high energy bills. After years of inadequate energy policies alongside benefit and wage suppression, it is no accident that we ended up in a situation where people cannot afford to cover bare necessities.

The solutions are clear, and have been known for years: rapidly shift away from fossil fuels by heavily investing in renewables and insulating our homes, whilst prioritising green, stable, unionised jobs. In the short term, the government must increase benefits and wages to match inflation, to protect people from the worst financial impacts.

Climate justice is social justice, and we must recognise that the current crises we are living through is the result of an economic system that was designed to favour a rich and powerful few. We must now redesign this system to put people and planet over profit.

Take action...

Join the Climate Justice Bloc at the TUC demo on Saturday! Free coaches are available for those coming from outside London.