Climate change: Capitalism – costing the earth

Climate change threatens the future of humanity

The 2007 statement from the United Nation’s climate panel, the IPCC, that the average temperature on earth must not rise more than two degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial levels or an incalculable disaster will take place, was a powerful reminder of the nature of the problem. But nine out of ten scientists believe that temperatures will increase more than the Kyoto protocol’s stated aim of keeping the increase within two degrees. An increase of three to six degrees before the end of the century is more likely.

The main reason is that as the oceans warm up they lose the ability to absorb carbon dioxide. Another horrific truth is that there is more carbon beneath the permafrost of the polar regions than in the entire atmosphere. Experts say that if the emissions of carbon dioxide, sulphate and nitrogen dioxide continue as they are today, this bomb will explode within the next 100 years. A point of no return is being discussed, a tipping point when there is a risk of global warming continuing whether or not action is taken to stop it.

Socialism Today, October 2009

Meanwhile, governments gather at summits to debate the issues, as they will in Copenhagen in December, talking of new targets of reducing greenhouse gas emissions. But they started talking in Rio 1992 and things are only getting worse. Why don’t the climate strategies work?

The established ‘green’ policies of governments and their capitalist institutions, such as the EU, IMF and World Bank, in practice, are only a reflection of the interests of big business. Climate change is reduced to being a problem isolated from the systemic crisis where progress is only restricted by technology and ‘bad government policies’. The means of tackling the problems are always adjusted to financial costs rather than the long-term goal of environmental sustainability. Fighting climate change on the basis of making profits for the few at the top will only lead down dead ends, while the outlook for a sustainable future continues to worsen.

Market forces

One such dead end is the trade in carbon emissions based on a system of emissions credits. This allows a company or country that reduces its carbon dioxide emissions below a target level to sell the extra reduction as a credit to another company or country that has not met its own target. The World Bank states that the value of the trade in carbon emissions more than doubled last year, despite the financial crisis. Does this mean that emissions are dropping? Not at all. So what does this trade mean in practice? An Oxford academic who studied the scheme, Adam Bumpus, concluded that "this regulation is ultimately there to facilitate the markets – it’s not about making cheap reductions, it’s about making a lot of money".

The idea is that governments hand out a limited number of permits to produce a certain amount of carbon emissions and that the scarcity of these permits would make the cost of emitting carbon rise. This would, in turn, lead to lower emissions and provide an economic incentive to invest in green technology. Therefore, so the theory goes, the buyer pays to emit greenhouse gases while the seller is rewarded for having reduced emissions by more than their quota. There is only one problem. It does not work like that.

The market always chooses the easiest means to save a given quantity of carbon in the short term, regardless of what action is needed for long-term reduction. The result is that the system reinforces technological lock-in. For instance, small cuts may often be achieved cheaply through making a technology a little bit more efficient, whereas larger cuts would require massive investments in new technology.

Since the main aim of cutting emissions is getting more credits to sell – according to the logic of the market – so that the buyer can produce the same amount of emissions that the seller has saved, trading credits in and of themselves will not do the trick in reducing emissions. In fact, it is cheaper for the capitalists to buy more permits, without reducing emissions, and to pass on the extra cost to consumers, as the power companies have proved. As Giovanni Bisignani, head of the International Air Transport Association (IATA), said: "If some governments still want to implement taxes [on air travel] we should get carbon credits to compensate every penny of these taxes".

This is yet another example of the misdirected policies of the Green parties which advocate both the carbon trade market and green taxes. Making the emission of greenhouse gases more expensive will not help as long as the bill is dropped into the mailbox of ordinary workers instead of the producers. Meanwhile, the owners laugh all the way to the bank with their brand new green consciences.

The problem with most of the established green organisations is that they seek mechanisms, such as emissions markets, green taxes, green laws or other technical fixes to the problem of polluting fat cats. Even if the proposals sometimes are good, the question of who will enforce them remains. Will it be the polluters or the people? The carbon trade system is bad in itself. But the fact that governments or other capitalist controlled bodies allocated the emissions permits in the first place, the logic of the market meant that they handed out too many permits out of fear of being in a disadvantage with competing capitalist powers. Today, there are more permits in circulation than there is capacity to pump out greenhouse gases!

Even the oil, gas and coal industries talk about a ‘green revolution’ in the hope of refreshing their reputations. US big-business lobbyists, known for resisting any change detrimental to their financial interests, are practically throwing money at Barack Obama’s clean energy plan. They know that the plan is so full of holes that US industry can avoid making any real reductions at home until at least 2026. This is because the Clean Energy and Security Act places carbon trading at its centre, allowing companies to exchange domestic reduction promises for cheap and bogus green projects abroad. The billions that Swedish energy giant, Vattenfall, have received through credits from water power is being invested in coal power plants in the Netherlands and Belgium. There are 50 new coal power plants planned to be built in Europe.

New, green imperialism

This is where the clean development mechanism (CDM), part of the emissions trade system, comes into practice. It puts together projects in developing countries that "would not otherwise have happened" – and a very bendable rule it has been shown to be. The CDM consultant, Axel Michaelowa, speaks of a "new gold rush" and CDM-created "carbon dioxide millionaires".

The World Bank is the largest multilateral lender for fossil fuel projects and uses its climate fund to back huge coal giants, such as the recent Tata Mundra coal project in Gujarat, India. Naturally, the projects have to be ‘green’, like the West African pipeline gas project seeking CDM money to reduce gas flaring in the Niger delta. But the real result is that oil giants, such as Chevron, can receive carbon credits while continuing to profit from criminal activities. Often the goal of the project itself is devastating. Carbon emitting corporations in the northern hemisphere have planted eucalyptus and other exotic trees in Africa. These suck up water from agricultural lands, leaving the farmers out to dry, while carbon credits are claimed for this new ‘carbon sink’.

Companies such as the Chinese Hu Chemicals and Brazilian Petrobras have created their own CDM subdivisions, which shows how multinationals are taking control of this money-making machine. In that context, there is little chance for villages or communities which want to develop solar or other sustainable energy generation.

In practice, there is no difference between the ‘green’, ‘fair’ CDMs and the long-hated Enhanced Heavily Indebted Poor Countries Initiative (structural adjustment programmes) which, for example, made it possible for Coca-Cola to plunder 300 billion litres of third world water for production at the same time as people were forbidden to collect rainwater as a result of privatisation.

Dams, resettlement and water rights

Many CDMs are about dams. The push for mega-dams has been justified by both development banks and multinationals as being necessary for the development of Africa and to combat carbon emissions. While governments, such as the US, Britain and China, announce mighty plans to electrify Africa, and other ‘aid’ schemes, the companies set in action the Boot model – Build, Own, Operate and Transfer – emptying the rivers of Africa to feed the growing energy needs of Europe, etc. And it is a very lucrative business when they can earn more carbon emission credits in the process.

Large dams provide electricity for multinational companies, water for mining, and irrigation for large-scale foreign-owned farms. Small-scale farmers and rural communities are the last to benefit. On the banks of the Zambezi, one of Africa’s largest rivers, at least 40 million people from 30 ethnic groups are dependent on fisheries and agriculture. But now, with 30 dams regulating the basin, Kadija Sharife of Pambazuka News reports a 60% reduction in the numbers of prawns which the people in the area depend on for food. In a study of 50 dams in Africa, professor Thayer Scudder, formerly the leading resettlement consultant for the World Bank, found that landlessness affected 86% and joblessness 80% of the displaced people. Lack of food security impacted on 79% of the people displaced by these ‘green dams’.

The global climate negotiations to expand the carbon market to rainforests would also spread this green displacement to Latin America where indigenous land rights are weak. This summer indigenous people in Peru went on strike to protect their land and water rights. At the same time, China is with great care building itself a green and fair-term image in Africa, often fed to and swallowed by the main capitalist media outlets, claiming it is developing sustainability as opposed to the west’s policy of debt dependency. But the Chinese dams are mainly built to acquire mining contracts, food, land and logging rights. International River writer, Terri Hathaway, calls China’s dam boom a new generation of ‘colonialism’.

Failed policies

Not only has the EU admitted the failure of the CDM system, even the USA’s Government Accountability Office has been compelled to acknowledge that a significant proportion of CDMs do not represent real emission reductions. Ironically, the EU recently proposed a new system, ‘sectoral crediting’ and ‘sectoral trading’, marketed as a departure from the CDMs. In practice, however, it makes it possible to bypass the current requirement to assess each project individually and will lower the already poor checks of environmental sustainability and social justice.

Carbon trading and other false solutions – such as biofuels, genetically modified organisms, carbon sinks, ocean fertilisation and carbon storage, among others – are all concepts that free industry from any kind of responsibility while providing huge profits. In April, the UK climate change secretary, Ed Miliband, announced that no new coal-fired power stations would be built in Britain without carbon capture and storage technology (CCS) which collects a proportion of the carbon emissions for burial in the ground. CCS is a theoretical approach to lowering greenhouse gas emissions, based on capturing carbon dioxide from fossil-fuel based power plants. Although this is yet not a successful technique, it could become doable, and it is seen as a new loophole for ‘green capitalists’.

Capturing and compressing carbon dioxide uses additional energy. The fuel needs of a coal-fired plant with CCS are increased by 25-40%, according to the IPCC. These and other costs are estimated generally to increase the cost of energy from a power plant with CCS by at least 2%, a cost which is put on the backs of ordinary working-class households in the name of ‘green energy’. According to Oscar Reyes, a researcher at the Transnational Institute, the Vattenfall pilot plant burns 10-40% more coal than existing coal-fired power plants.

A lot of this bogus climate work is even protected from criticism by sections of the environmental movement. Harald Schuman and Christiane Grefe, of Tagesspiegel and Die Zeit, highlighted in Der Globale Countdown how NGOs have increasingly become funded by business and governments and, therefore, leave out important facts and conclusions from their reports and publications.

A crisis of opportunity?

The capitalist economic crisis has shaken the earlier popular assumption about endless market-based economic growth that would, supposedly, solve the climate issues – although it never did. It raises other questions, such as the need for economic democratisation, public decision making and the need to plan production and global trade. Nonetheless, some capitalists and political leaders still try to be positive about the market’s ability and point out the ‘good things’ which could come out of the recession.

The Africa Progress Panel chaired by Kofi Annan, for instance, has called on African leaders to turn the global economic crisis into a ‘unique opportunity’ on the basis of ‘shared responsibility’. Specifically, Annan says that a growth of renewable energy, clean agricultural production and green transportation could boost the African economies through foreign direct investment. He also salutes the rise of emerging partners, such as China, Brazil and India, as a means to achieve the ‘millennium development goals’ in Africa. But if this global recession is a great opportunity for action on climate change, why is the UN warning that investment in renewable energy has collapsed by 44% in a year? The answer is that capitalists invest where profits are as reliable as possible.

The capitalist crisis has made the global markets unreliable. Prices have climbed and become unstable, which is why speculators want to buy land instead of crops and food. This has set in place a massive land-grabbing race in Africa. Wealthy corporations from China, India, South Korea and Saudi Arabia are setting up mega-farms to outsource food production and use cheap labour. This land grab is escalating deforestation and the destruction of wetlands, with huge impacts on climate change and poverty. In Rwanda, where 60% of forest cover has been cut down and the wetlands are being destroyed, the government implemented rationing for freshwater – except, of course, for the companies that caused the problem, and especially the well-funded CDMs.

According to the South African Department of Environmental Affairs, by 2020 up to 200 million people in Africa could be threatened by water scarcity. Agricultural yields could collapse by 50%, and severely damaged eco-systems will further exacerbate food shortages. Research by the Group d’Experts Intergouvernemantal sur l’Évolution suggests that agricultural productivity in sub-Saharan Africa could be halved. In January 2008, hunger affected 923 million people. Today, it’s 1.02 billion people, according to the UN’s Food and Agriculture Organisation.

As the tragedy in Darfur shows, climate change is also a threat to security. Often the rainy season does not come at all, desert sand destroys the farming soil and, if the rain finally does come, it can be torrential, flushing away the alluvium soil. With increasing lack of land, previous agreements between cattle and agricultural farmers on the division of land and the use of wells are put under pressure and can break down. In north Kenya and Uganda, this has led to violent clashes. What is called ‘ethnic cleansing’ in Sudan is, in fact, the logical outcome of multinational robbery by US, Chinese and Russian profiteers, as well as the collapse of eco-systems that follows.

Too late for socialism?

Leading climate change activists, such as George Monbiot of The Guardian and Plane Stupid’s Joss Garman (well-known for resisting the expansion of Heathrow airport), correctly stress the need for action now. But their conclusion is that it is ‘too late’ to talk about socialism, and that there is no time to ‘wait’ for a socialist solution to climate change. When people recognise that the IPCC timetables and worst-case scenarios are actually underestimations of the speed of climate change, they might agree. We are in a hurry, yes. But it is these examples of the political confusion of leading environmental campaigners that create the idea that ‘anything goes or we’re too late’, scaring people into the arms of meaningless policies and diverting them from the real measures which need to be taken. There are no short cuts.

If something needs to be hurried along, it is the need to abolish capitalism, a system which from its birth has led to disasters, war, mass starvation and environmental destruction. The problem of global warming will not be solved by brilliant market-based ideas or technical adjustments. Solving the climate change crisis is not a technical matter, primarily. It is a political issue. We have today the technical and financial means to stop climate change, poverty and injustice. Control of those means must be taken by the majority, instead of resting in the hands of the few.

Production and trade must be planned and put under democratic control. Profit as the driving force would disappear with a socialist system and be replaced by production for the needs of society. Democratically elected assemblies – at various levels: local, industry-wide, national and international – would decide how the surplus should be divided, what should take priority, what objectives there should be for productivity, what is to be used for investment and for public or private consumption. These plans would take the form of working hypotheses, constantly discussed and reviewed in the elected bodies. The auto industry, for instance, would have to be nationalised with production reorganised according to plans worked out by workers, experts and consumers, linked to the development of a fully integrated public transport system.

A planned economy would also mean that capitalism’s waste would be eliminated. Huge resources could be saved from the speculation and advertising sectors and invested in production, solving environmental problems, and infrastructure projects in developing countries. Today, everything must be profitable or it is closed down. In a socialist society, space can be left to education, research, conversion to organic farming, or rectifying other global problems, priority areas which would not have to generate profits in themselves.

Technology should be applied in a planned way to systematic energy-saving measures, with much more efficient building construction methods, industrial production processes, and home energy saving. There should be much more intensive research and development into renewable energy sources, such as solar, wind power, hydro and tidal power, and other possible sources, as well as storage and transmission technology. We need massive, planned investment in public transport infrastructure, from local to international level, based on the most energy-efficient means, trains in preference to aircraft, buses in preference to cars, and with safe facilities for bicycles.

The reorganisation of agriculture on national and global levels will be vital, developing environmentally friendly methods of food production. For decades, intensive capitalist farming has degraded the land. Internationally, many food-exporting countries have become over-dependent on one or two products, vulnerable to fluctuations on world markets. The problems of giant, international agribusinesses, on the one side, and of the exploitation of small farmers and the landless by landlords, on the other, require socialist solutions. Urgent measures need to be taken to restore damaged eco-systems, such as forests, lakes and oceans, and degraded farmland.

Undoubtedly, much more research is needed to achieve these broad aims, and new technology has to be tested in practice. It is clear that capitalist corporations, whatever environmental regulation is introduced by governments, will never seriously confront the problems of environmental destruction. These objectives require socialist planning on a global scale. The most profitable ‘industries’ today are based on the total abuse of human resources: the sex industry, people trafficking, arms and drugs. Ending climate change is about building a society based on meaningful production, on the needs of all and not the greed of a few.

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