The UK financial crisis shows that wide-ranging government intervention will be necessary to protect jobs and pensions during any system change to stop climate change

The market and political crises in the UK were brought on by the ignorant right wing ideologies of the leaders of the governing Conservative Party.

Because fund managers and investors believed that the government’s policies would lead to higher interest rates, the value of pension fund investments dropped sharply.

Several pension funds were on the verge of going bankrupt before the Bank of England came to their rescue by buying government bonds.

The crisis has important lessons for climate activists calling for “system change”. There are close links between climate change and the financial systems across the globe that rule national and the global economies.

Huge government spending

Any very rapid shift to a net zero carbon economy will require huge changes to how human society, including capitalist economies, are organized. Initial government spending would be huge, meaning that governments would have to borrow large amounts of money or raise new taxes.

These changes on their own would inevitably lead to severe disruptions in financial markets, threatening pensions, personal savings, government finances and jobs.

That is why any credible system change will need to be accompanied by a financial system change, with wide-ranging government intervention in the banking system and financial markets.

The alternative would be a chronic financial crisis that would rapidly lead to a loss of popular support for the government and its policies.