The Single Market & Global Warming

Posted by Mike Gold on Monday, December 16, 2019 · Leave a Comment

The political and business classes cannot, or do not wish to, understand that global warming cannot be reversed; all we can do is slow down the speed of change said Sir David Attenborough in an interview with John Snow on Channel 4 News (https://www.youtube.comwatch?v=cZwQN4JpJ8s)

However, opinion polls show that a majority of the public, the electorate, do understand the seriousness of the current crisis and are concerned or deeply concerned. What has brought about this sudden and major change in public opinion?

Firstly, Greta Thunberg, a sixteen-year-old Swedish schoolgirl, suddenly appeared on the world stage having started her own campaign to stop climate change by going on strike from school. Secondly, the totally unexpected summer weather has seen the hottest day ever recorded in the UK, torrential thunder storms and severe flooding. Greenland and the Artic have also had their hottest summer on record. Glaciers are melting so fast that all the previous scientific predictions about how fast the glaciers were melting are now known to be wrong by up to 50 years. Melting ice means sea levels are rising and coastal towns far away from Greenland and the Artic are soon likely to become uninhabitable. Finally, the annual fires in the Amazon rainforest and the Australian bush have been severe.

The single market and other trade treaties can now be seen as major factors in global warming. It is strange to think that, suddenly, the idea of the UK leaving the EU without a trade deal does not look nearly as bad as it did a couple of months ago; still frightening but logical.

To understand why trade deals have suddenly gone from being essential to becoming pariahs we can look at the European Union (EU) Single Market.

When the EU began on 1^st January 1957 it was called the Common Market and the single market meant that each of the 6 founding member states could export goods to the other 5 member states without having to pay any form of import duty. Today, this simple single market concept has changed dramatically.

Now, Western European companies look to manufacture in Eastern Europe but still sell most of their products back in Western Europe. They will sell their products at a price cheaper than if they had produced the same product in Western Europe and, obviously, this will also be more profitable.

There’s a lot of talk of the use of ‘just in time production’ and ‘supply chains’ to make companies more efficient, which in turn makes goods cheaper .There is more than an element of truth that many companies run very tight schedules but this is a red herring.

It is not just that wages are cheaper in Eastern Europe but also that the individual countries want to provide work for their citizens. They will therefore put together a package to get the Western European company to build a new factory. The cost of the land, whether purchased or leased, will be subsidised. The energy used to power the factory is also likely to be subsidised and there are often tax breaks.

Once the goods are produced, they are loaded onto tens of thousands of 44-ton lorries that head westwards, belching out diesel fumes that quickly spread over the 28 countries of the EU and then even further. Companies want to send the lorries back to Eastern Europe loaded with cargo, but most travel empty.

Diesel exhaust is a group 1 carcinogen which can cause lung or bladder cancer and the small black particulates, easily recognisable on a warm summer’s day, are inhaled into our lungs and can cause severe breathing problems, including some that will eventually end in death.

Drastically, increasing the tax on diesel fuel would mean that the goods will no longer be cheaper than producing much closer to home and the Western European market. Using rail would not be such a health hazard but there are logistical considerations, mainly about the onward distribution by road from the railway goods depots. Both these possible solutions would take away the cost advantage of producing in Eastern Europe but would dramatically reduce the EU carbon footprint. That is the stark choice we have.

The effect of a fuel tax hike and/or using rail would be that the price to the consumer would go up and company profits would go down. There has to be a long overdue realisation that the cheap goodies that have been produced in Eastern Europe have been at the expense of the planet and drastic action is now needed. Then the prospects for saving the planet and the prospects for future generations would, definitely, go up.

Obviously, trying to introduce these measures overnight would not be possible but the change cannot be allowed to drag on because companies lobby politicians about the viability of their businesses and shed crocodile tears about their loyal staff losing their jobs.

Local production for local consumption needs to become the mantra of the 21st century and there must be an acceptance that the era of cheap material goodies is over. If we leave the EU without a deal that does not mean we are safe from trade treaties as there could be a trade deal with the US and others with goods criss-crossing the world’s oceans and carrying on polluting as if nothing has happened.

Years ago foods, especially fruit and vegetables, were seasonal but now there are EU trade treaties and perishable foods are flown into Europe from around the world. The air is thinner 30,000 feet above the ground and the pollution caused by aircraft is that much greater and spreads that much faster. The insanity of this can be summed up as ‘It’s always summer in Sainsbury’s’

Time is moving fast towards a point of no return and the new British government has to make serious decisions. A trade deal with the EU and/or the United States will have the political protagonists judging the deal on the perceived impact on our economic growth not on the environmental repercussions for the planet.