There doesn’t need to be a trade-off between sustainability and the cost-of-living crisis

There is a siren call: use the market to save the planet. Tax carbon or use other price signals to reduce demand for energy. But there is also a problem, as President Macron of France discovered in 2018. He raised the price of petrol for environmental reasons, which led to a different type of demand. The Gilets Jaunes movement, outraged at the threat to living standards, demanded his head, figuratively. In the face of unrest, Macron backed down.1

The price of energy has soared, but to say that demand has dipped does not capture the reality. People are at risk of freezing to death this winter as they can no longer afford to heat their homes. Three issues are at play here. First, distribution is crucial. Rich people may find an increase in energy bills an inconvenience. For those on low incomes—actually the 60% of UK households who, without intervention, face fuel poverty this winter2—the increase makes problems of poverty dramatically worse. This leads to the second problem. Energy is not like caviar, extra virgin olive oil, or designer handbags. If the price of luxuries rises, people may consume less (or more as a form of extravagant display). But energy is fundamental to life. Consuming less home heating will lead to real suffering.

In our recent report, Fuel Poverty, Cold Homes and Health Inequalities, we pointed out that fuel poverty implies being both cold and poor.3 The consequences for health and health equity are potentially dire. Growing up in a cold home damages lungs and has an adverse effect on mental health and development. In adults, similarly, cold damages lungs and the cardiovascular system. The UK already has excess winter deaths.

Living in poverty damages health through lack of the basic necessities for life—food and shelter principal among them—and the struggle to make ends meet leads to increased risk of mental illness that, in turn, damages children’s health and development. Evidence shows that the greater the number of times a child is in poverty by age 14, the greater the chance of obesity, the worse performance on language tests, and the greater the likelihood of depression.4

The third issue is the lesson the pandemic should have taught us. We cannot rely on the market alone to solve issues of major importance to national health and wellbeing. Market fundamentalism ran into the buffers in March 2020.5 The covid-19 pandemic, subsequent lockdowns, and dramatic instability in stock and bond markets led to massive government interventions. In 2020 alone, governments in rich countries issued $18tn of new debt, half of which was bought up by central banks.6 In the UK, a conservative government ditched the austerity orthodoxy of the post 2010 government and declared a public spending bonanza—whatever it takes.

Faced with daunting levels of fuel poverty in the UK, the new prime minister, Liz Truss, and her chancellor Kwasi Kwarteng, within three days of taking office produced an aspiration, more than a plan, to freeze energy prices, with a cost of around £150bn. This was followed by a mini-budget, which announced tax cuts for the rich, and will most likely be followed by cuts in public spending, and benefits cuts. The impact of the budget is increasing inequalities and doing little else to address rising household costs, all contributing to widening health inequalities and the cost-of-living crisis.

But the crisis should not be an alibi for dropping measures to achieve net zero. When windfall taxes were imposed on energy companies, in spring 2022, Rishi Sunak, then chancellor, allowed rebates for further investment in fossil fuel development. Prime Minister Truss, when campaigning, announced her intention to remove green levies from energy bills, despite its contribution to easing the cost-of-living crisis being small.

In a report, Sustainable Health Equity, prepared for the Climate Change Committee, we laid out ways that sustainability, achieving net zero carbon emissions, and advancement of health equity can, and must, go together.7 The four domains we considered were: housing, food, work, and transport. Running through all of it was the need to reduce air pollution.

Each of these four domains is highly relevant to the cost-of-living crisis. Take housing: in 2013, the government stopped investing in home insulation. Government investment in affordable housing, with good thermal properties, has to be a priority to help tackle the cost-of-living crisis and the climate crisis. When it comes to food, we know that a plant-based diet is better for achieving net zero and healthier than one based on meat. But there is a cost premium associated with healthy eating. It is urgent to address it. Research suggests that a four day working week would reduce the UK’s carbon footprint, but a four day working week seems like a pipe dream at the moment, at least in the public sector.8 With the government sanctioning wage settlements well below inflation, the idea that they might pay the same wage for a four day week seems a stretch. Transport, based on walking, cycling, and subsidised public transport, is good for the planet, has health co-benefits, and is good for equity, compared with filling cars with expensive fuel. But it relies on the government investing in public transport infrastructure to attract people out of their cars.

The fuel poverty crisis has to be addressed with urgency. But now is also the moment to address the longer term issues of sustainability and health equity. There need be no trade-off between them. Both will require social action in addition to whatever the market can deliver.