books business economics

Book review: Decarbonomics, by Charles Dumas

Charles Dumas is chief economist at the macro-economic forecasters TS Lombard, who provide analysis on risk and investing to multinational corporations. In Decarbonomics and the Post-Pandemic World, Dumas summarises the economic and geopolitical outlook as the world looks beyond Covid-19 and addresses the challenge of climate change.

The opening section looks at the economic damage of the pandemic, and how different countries have been affected by it. In clear and readable terms, Dumas explains how and why pandemic recessions have played out differently, depending on countries’ exports, deficit spending or levels of debt. He sets this analysis in the context of globalisation and how it is changing, through policies such as Donald Trump’s trade war with China. Among the takeaways are that spending and investment on decarbonisation are an important part of the pandemic recovery, and that there is a strong economic as well as practical case for that.

The second part moves on to “the emergence of climate change as a major factor in how the world economy, population and politics develop”. It looks at the changing economics of renewable energy, rising business interest and growing government commitments, and who the winners and losers might turn out to be from the energy transition.

Two books loom large in Dumas’ thinking – the Stern report from 2006, and Bill Gates’ How to Avoid a Climate Disaster from 2021. With a handful of exceptions (Mark Lynas, James Lovelock, Toby Ord), most discussion of climate change is dismissed as “alarmism” from “quasi-religious” environmentalists and “hair-shirt doomsters”. This is a response to climate change that listens to bankers and billionaires, with a little bit of science on the side, but with no consideration for other perspectives.

As you would expect from such a narrow band of influences and interests, the book has little to say if you’re not a banker or a billionaire. The detailed policies are delegated entirely to Bill Gates, simply summarising all his recommendations in an appendix. Dumas’ main recommendation is a carbon tax, coupled with the removal of corporation tax – how convenient.

This would lower emissions while inviting in big business – essentially creating a predatory low tax environment in the UK, something much longed for in some circles. “Clearly” he admits, this “would hurt poorer households, requiring compensating expenditure.” But don’t compensate for it with a wealth or land tax, he clarifies in an appendix on inequality, because that is “always strongly resisted”. Always strongly resisted by very rich people, needless to say. Plenty of others think it ‘s a very good idea.

I picked up Decarbonomics with an open mind. We need the perspectives of bankers, business leaders and billionaires, which is why I read their books. But if they are not held in balance with climate justice, with perspectives from the global south, from the marginalised and the powerless, then these are prescriptions for more inequality, more injustice, more oblivious privilege. Dumas has not made space for a diversity of voices at his table, and so his book will only make the world better for people like him.

I’m sure the book will be warmly received in some circles, but I’m not convinced it’s making a positive contribution for everyone else. To be honest, the only reason for 99% of readers to pick up Decarbonomics is to keep an eye on what the richest 1% are advocating on climate change. And I’ve read it and saved you the trouble.

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