Getting climate, energy & environment news right.

Eco-tunity Zones are the Clean, Green Key to Levelling Up Britain

Eco-tunity Zones are the Clean, Green Key to Levelling Up Britain

Much has been made of the British government’s promise to ‘Level Up’ post-pandemic. Concerns mount over the cost-effectiveness of their policies proposed to achieve the net-zero emissions by 2050 target. Chancellor Rishi Sunnak admitted upwards of a trillion will be spent on present schemes; whereas my modeling projected a fully renewable grid would cost taxpayers £2.9 trillion alone. This is overshadowed by President Biden’s ‘Build Back Better’ green infrastructure bill, projected to overspend by as much as $2.15 trillion. But, proportionate to population, the UK is outspending the US by almost $8000 a head. ($11,782 per US citizen, compared to £14,925 per UK.) It’s clear that the state’s attempts to play environmental favourites are due to bankrupt Britain.

Conservatives should learn from history, rather than be set on repeating it. Prime Minister Margaret Thatcher was culturally admonished for her closure of coal mines; leaving many constituencies devoid of localised social mobility for decades. Despite gaining the votes of these Brexit-voting communities in his 2019 landslide mandate, Prime Minister Boris Johnson expressed politically tone-deaf praise for the Iron Lady’s coal mine closures as being early action on climate change. While Ms. Thatcher was right to tackle socialist unions and the economic and environmental unviability of this industry, the transition from coal production in Britain’s mining towns was not the “just” one urged so often by policy-makers.

>>>Was COP26 a Cause for Climate Optimism?

Research by UK think-tank Onward also found a strong correlation between rural constituencies and heightened economic disruption experienced by the net-neutral emission transition. The elimination of over 10 million jobs in high-carbon industries will also disproportionately impact the UK’s least economically prosperous regions: the East (42%) and West (41%) Midlands, Yorkshire and the Humber (38%), and the North West (38%). To execute the ‘Levelling Up’ promise of nationwide equality of opportunity, government must leverage market investment in improving the efficacy and reducing the emissions of infrastructure in these left-behind areas.

As an analysis of urban economic development strategies in the US and UK has indicated, the viability of economic policies must be means-tested for particular postcode areas, based on their socio-economic status, to ensure optimal participation in market activity. A policy from across the pond could provide some insight into how to devolve market-environmentalist principles to adoption according to the local expertise of Little Englanders.

The bipartisan cosponsoring of Opportunity Zones—included in the U.S.’s Tax Cuts and Jobs Act of 2017—provides an interesting policy model for ameliorating these concerns. These place-based incentive programmes aim to encourage static capital to be invested in low-income communities. Capital gains taxes are deferred for any reinvestment in an opportunity zone; with taxes waived for any investment after ten years of holding. Benefits also extend to businesses that demonstrate generation of 50% of income within an Opportunity Zone. This inverts the Enterprise Zone model, which subsidises companies for their presence in deprived areas; instead of encouraging market actors to voluntarily invest in return for long-term tax deductions. As of August 2020, 8,800 Zones had accrued $75 billion in investment and elevated one million Americans from poverty.

Opportunity Zones are determined by local government: assessed on the basis of areas where median household income resides below the annual average of $59,000, and the poverty rate is above the national average. Deference to state officials on this matter is crucial: as local representatives are more likely to have an intimate knowledge of the issues besetting individual communities.

The Tax Foundation found Opportunity Zone designation created a 14.2 percent increase in price for formerly depreciated property and a 20.9 percent increase for vacant land. However, an overall property price increase would indicate greater efficacy of the policy; signifying encouraged investment in existing properties, as well as new developments. Therefore, a targeted impact system is needed to further direct investment toward sustainable rejuvenation of deprived areas.

This targeted impact strategy could work in Britain. Brexit enables the UK to reinstate Free Ports: designated areas where the flow of goods are controlled, and legally exempt from corporate and/or import tax. The Chancellor’s plan could be brought in-land by waiving capital gains taxes for any sustainable industry investments—concerning housing retrofits, and market-environmentalist sector job creation—in areas designated to be economically deprived communities. These “Eco-tunity Zones” would be an appealing prospect to apply to twelve areas across England assessed as ‘Social mobility and opportunity areas’; with additional areas applicable for reassessment following the economic downturn caused by COVID-19 lockdowns. This could replicate the large-scale investment projects which resulted from Senator Scott’s policies; as in his home state, South Carolina,  where a $54 million-dollar tech corridor was produced due to Opportunity Zone investment.

These policies would constitute the abolition of a ‘Factory Tax’; incentivising the repatriation of manufacturing as a strong strategy to accompany clean free trade agreements in attempts to decarbonise commerce. The expansion of sustainable industry is a strategy drawing on the existing nature-dependent nature of the global economy: with industries highly dependent on nature generating 15 percent of global GDP ($13 trillion); and moderately dependent industries generating 37 percent ($31 trillion). It could bring Britain’s carbon advantage for goods produced in line with that of the U.S.: thrice that of China, and four times that of India.

Efforts to reduce reliance on China for battery production (80% global output annually) could accelerate a renewable transition, foster innovation in increasing capacity, and reduce challenges posed by the 2030 petrol car ban. That could provide additional employment for those involved in capitalising on resource deposit discoveries, like lithium in Cornwall. Extraction can be conducted with less-invasive exploration, efficient extraction methods, sustainable management of extraction sites, low-carbon transportation of extracted goods, and remedial provisions for ecosystems and local communities once extraction is complete.

Eco-tunity Zones could avoid the net zero policies of the present, which could repeat the intergenerational poverty and widespread unemployment caused by rapid closures of Britain’s coal mines in 1985. By creating incentive structures for investment in Britain’s forgotten localities, a just green transition can sustain regional prosperity beyond the momentary extraction of finite resources.

Connor Tomlinson is the Policy Director for the British Conservation Alliance, and a Young Voices UK contributor. He makes regular appearances in American Spectator and on talkRadio. Follow him on Twitter: @Con_Tomlinson

Copyright © 2020 Conservative Coalition for Climate Solutions

Join the Movement

Help us promote free market solutions for climate change.

Download Now

The Left’s Top 10 Climate Denials

Download Now

nikola-majksner-hXNGeAFOgT4-unsplash