Copenhagen: Flooding the Market

Copenhagen: Flooding the Market

December 7, 2009, 4:32 pm
Filed under: Uncategorized

This article was written by an SEL member for Black Flag magazine (issue 228, 2008/9). Although written a year ago it seemed relevant to the current round of discussions on global warming in Copenhagen.

Copenhagen: Flooding the Market

Something strange has happened over the last few years. Ecological concerns , formerly the preserve of a few bearded hippies and annoying lefty types, have entered the mainstream. Climate change due to human activity has been accepted as fact by government and business alike. Something has to be done.

Unfortunately this something is up for grabs. At the moment unfortunately the solutions fighting it out for prominence come up pretty poorly. None of them fully engage with the wider context of our class based, hierarchical society. All seek to work within capitalism without questioning whether this is desirable or even feasible.

Capitalism to the rescue?

Can capitalism ‘solve’ the climate change problem? Well, a few years ago my instant reaction would have been no. My answer now is that it’s highly unlikely to. It depends whether you’re talking abut a pure market system or the more complex capitalist world that we actually live in.

Capitalism by its nature is based on the need to continuously expand or die. New markets must constantly be sought, new or more efficient ways of generating and realising profit created. There is no moral dimension to capitalism. In itself it does not take into account anything other than the accumulation of wealth.

There are some free market advocates that believe that the solution to environmental problems is private ownership. According to Fred Smith, president of the Competitive Enterprise Institute, “Rather than the silly slogan of some environmentalists, that ‘trees should have standing,’ our argument is that behind every tree should stand an owner who can act as its protector” (1). It’s unclear what would stop the owner from chopping the tree down if it were more profitable to do so. In this argument pollution would be fought by owners of land/property suffering pollution bringing legal claims – though proving that a particular factory is responsible for acid rain seems a little difficult.

Bar these visions of a bosses’ utopia in which everything is owned for the good of all (not to mention the profit of the few) – and one in which it is hard to see how climate change could be tackled – we’re left with a free market that without outside intervention would quickly lead to ecological disaster, not just through an amoral approach to growth by any means, but also through a consequence of market exchange – externalities.

An ‘externality’ is something that occurs as a result of a market exchange, that affects people or things other than the buyer and seller. It’s in the interests of both buyer and seller for some costs resulting from the transaction to be shifted on to others (‘externalised’). Robin Hahnel gives the example of someone buying a car from a car maker. The costs of the pollution caused through production, and the pollution, congestion, and carbon emissions caused through consumption – use – of the vehicle are not included in the price struck. The costs are borne by others. Put simply, if it’s cheaper to pollute than it is to avoid or clean up pollution, market logic says pollute (2).

So the logic of capitalism points to – if I may lapse into rock-speak – a one way ticket to hell.

The thing to bear in mind however is that we do not live in a pure free market system. The state and other bodies and mechanisms represent another part of the ruling elite alongside the people who fill boardrooms and senior management positions. In a sense they are the semi conscious bourgeoisie, who often act to save their business brethren (I use the gendered term deliberately) from themselves. It is this part of the ruling elite that often grants reforms, as it can see that in the long run reforms are in their class interest, as they head off too much disruption from dissatisfied workers/women/black people/youth/LGBT people etc. The potential effects of global warming – rising sea levels, food shortages, famine, death and population displacement – would present a huge risk to both profit making and the legitimacy of state and capitalist institutions.

I believe that on this level there has been recognition that we are staring a global crisis in the face. The noises coming from government bodies, quangos, media outlets and so on reveal that climate change is a genuine concern. They know that steps have to be taken.

Having said that, this will always be tempered by the immediate needs of the business class. The recent double dealing by the Government offers a great example. To avoid EU commitments to renewable energy it has been seeking to have overseas renewable projects it has funded count towards its target, as well as so called ‘clean coal’ carbon capture. Allegedly the real aim is to support nuclear energy over renewables, as funding both not to mention infrastructure support for both) is not really an option.(3)

As an aside on clean coal, the government is to fund a demonstration project to assess the technology. The anticipated period for the project is 15 years. That is, it will take 15 years before they can even assess whether or not the technology is both sound and financially viable(4). These are 15 years we do not have if we are to avoid the more serious consequences of global warming.

There may be a time where concrete actions are taken. The thing to remember however is that these changes will not be at the expense of class power. Those at the top will not let a trivial matter such as climate change upset their position of dominance. By the time this happens, I fear that remedial actions will be quite drastic, presumably some form of carbon rationing where the more money you have the more carbon emitting activities you can enjoy. This would also necessitate a strong authoritarian state, to ensure there is no cheating the system (at least amongst the proles), and to quell any social unrest the situation causes.

International agreements

The most well known example of elite action to tackle climate change is the Kyoto Protocol. As part of the UN Framework Convention on Climate Change it is an international agreement to reduce greenhouse gas emissions by 5.2% (from their 1990 levels) by 2012.

According to George Monbiot’s recent book Heat, we actually need to reduce carbon emissions in the ‘developed’ world by 90% by 2030 to have a good chance of avoiding the worst effects of climate change. This means keeping warming below 2 degrees above pre-industrial levels (1.4 degrees above the warming already caused). Note that this is not a ‘safe’ level – millions could still be at risk from water or food shortages below this level. (5)

This should not be taken as a call for us to run back to the caves, but it does mean that we cannot be too complacent. Some technological solutions will help us, but we cannot rely on techno-fixes alone. There have to be fundamental changes to the way we organise society. Yet this doesn’t really figure into the current international agreements or even discussions.

Carbon Trading

A favoured market based solution to global warming is carbon trading. Companies are allocated carbon emission allowances. If their CO2 emissions are lower than their allowance they can sell the unused portion, or similarly buy more if they are going to exceed their limit.

This approach is littered with problems. It actively encourages CO2 emissions to be increased up to the already inadequate limits, as ‘unused’ allowances are sold to someone who will use them. In the EU scheme governments have handed out huge allowances to the biggest polluting industries, leading to the price of carbon dropping by 60% (hardly encouraging anyone to cut emissions) and UK companies alone making collective profits of ￡940m in the first year of the scheme.(6)

Some trading schemes (eg, under Kyoto and the EU’s scheme) allow polluters to buy credits from overseas offsetting projects, generally in the developing world. Offsetting is a dubious practice at the best of times, (see below), and this approach does nothing to lower emissions, especially given the dubious nature of many of these projects.(7)

Carbon Trading also has an ideological effect – and probably motive – of yet again expanding free market rhetoric into another area of life. Once more capitalism rides to the rescue, with the magic of the market’s ‘invisible hand’ holding back the waters and saving the poor polar bears. I used the phrase rhetoric deliberately as, like in many other cases, the reality is not that of a truly free market – the massive handouts of allowances was hardly an example of muscular capitalism.

If anyone were in any doubt about the nature of carbon trading, the Financial Times again highlighted the class war credentials of such schemes:

“Both carbon taxes and markets put undue burden on the poor. Governments should counter such regressive carbon taxes by lowering taxes on labour. Yet most of the political appeal of markets is that they hide the true costs to consumers. That is why carbon markets exist in the first place. For this reason it is unlikely that governments would offset the invisible burden of markets by changing visible taxes.” (8)

Offsets

Most of us are aware of carbon offsetting. The idea is that you ‘neutralise’ the carbon emissions from a particular activity (air travel is a common example) by paying a company to remove an equivalent amount of CO2 from the atmosphere, generally by planting trees. Sounds like a great solution, except for one thing – it doesn’t really work.

It’s hard to accurately calculate how much CO2 a tree will absorb – and for how long. Unless the tree undergoes the same processes that led to the creation of fossil fuels that carbon isn’t going to stay locked away for ever – it will be released if the tree burns or rots.
As a scientist from the Tyndall Centre for Climate Change Research said to The Guardian, “Even if the trees do survive, if we have climate change and a 2C or 3C temperature rise, then how do we know those trees are not going to die early and break down into methane and actually make the situation worse?” (9)

Other offsets are based on projected savings caused by other schemes such as windfarms or promoting more efficient lightbulbs. But here too calculation is an issue, not to mention a high degree of double counting, where projects that were going to go ahead anyway are counted within the offset framework. Carbon Trade Watch have produced a fine report that exposes the offsetting problem

Even if offsetting was a plausible system on its own terms, it diverts attention away from the real solution – leaving fossil fuels in the ground in the first place – and works on the basis that a clear conscience is available to those who can afford it. It’s no wonder that groups such as Carbon Trade Watch have compared this system to medieval indulgences, where wealthy sinners could pay to have their heavenly slate wiped clean.

Capitalism as if profit mattered

“We need more people like Porritt … prepared to … find the best ways to save both the environment and the capitalist system”
Quote from the back of Capitalism as if the world mattered

Jonathan Porritt was a childhood hero of mine. Growing up in the days of John Craven’s Newsround I remember him running Friends of the Earth at a time when I was getting interested in environmental issues. Then I grow up to find him running a pro-business green group called Forum for the Future and writing a book called ‘Capitalism as if the World Mattered’.

The book is based on the perspective that capitalism can be made a bit nicer. This would be achieved by identifying “those characteristics of today’s dominant capitalist paradigm that most damagingly impede progress towards sustainability and set out to change them through the usual levers – government intervention, consumer preference, international diplomacy, education and so on”.

Despite having read the whole book, it’s hard to give a clear picture of what Porritt actually envisages beyond a few examples of case studies or possible reforms. These include environmental taxes intended to reflect externalities, business accounting that would reflect environmental impact and Wal-Mart’s sustainability plans. He reprints Forum for a Future’s business case for embracing sustainable development – stronger brands, customer loyalty, influence with regulator/government, enhanced shareholder value. There is no real recognition that we live in a society which is divided along the lines of wealth and power. Imagining a little bit of moral pressure and reasoned argument will bring about reforms significant enough to make a real difference seems every bit as utopian as he accuses anti-capitalists of being.

Down with this sort of thing! Careful now…

The analysis from liberal greens is not particularly illuminating. It tends to be a mishmash of a generalised ‘we’re all killing the planet so change your lightbulbs’, anti-corporate finger pointing and calls for government to take strong action to make us all better green citizens.

The extent of the analysis on the ‘I count’ website’s ‘What causes climate change’ page is typical: “But who causes it?: It’s simple. We all do. At home, work and play.” (10)

The problem with NGOs is that they honestly believe that they are sitting on terrible information, and all they really need to do is make a large fuss about it and get government to take action. It’s very much along the lines of the Quaker idea of speaking truth to power. Yet as Chomsky has often pointed out, people in power generally know the truth already. It’s just that the current situation benefits them.

Furthermore, NGOs cannot or choose not to see systemic reasons for environmental destruction (or poverty or war or any other major scourge). They would jeopardise their support from well off guilty liberals. Their chief executives are after all now part of the very class they would be attacking, and would lose out on that forthcoming CBE.

I spend a lot of time looking around the internet at green sites. If I see that native American proverb about ‘when the last tree dies … blah blah blah … then they will realise that you can’t eat money’ one more time I will scream. Apart from being annoyingly cloying, I’ve never seen any evidence that it’s a genuine Cree proverb.

You could say that this at least points to an anti-capitalist sentiment, but too often the people spouting this are merely anti-corporate. In some ways this is a step on from simply blaming humans or particular levels of technology for environmental destruction, but it equally fails to get to grips with the mechanics of a hierarchical capitalist system. All it sees are bad people doing bad things.

The general outcome of this kind of anti-corporate pressure tends to be ‘greenwash’, the use of PR and image to sell the idea that the particular company is actually very very environmentally friendly indeed. This is typified by BP’s change of logo to an abstract sun/flower design and infamous ‘Beyond Petroleum’ strapline.

While the facts behind the greenwash are easy to point to, we increasingly live in the situationists’ world of spectacle, where the reality is not as important as the image. The truth is whatever gets into the public consciousness. Oppositional groups have no chance of matching the marketing budgets of the transnationals, leaving aside fighting elite consensus within the media.

In any case, the point is not that certain companies are benefiting from threatening our future. Shell do not act the way they do because they’re run by nasty people. Corporations are simply following the intrinsic logic of capitalism. No matter how fluffy your intentions might be when you start a company, you can’t escape this logic. That’s why the Body Shop under the Roddicks was anti-union, and why it ultimately sold out to L’Oreal. And of course the Body Shop never broke with the idea of top down hierarchy and wage slavery at any point.

It can make sense to point to individual acts of companies, either to stop an immediate threat, or as an example of wider structural concerns, but the futility of seeing this as an end in itself not only hides the true nature of the problem but also falls victim to PR chicanery.

Conclusion

What is needed is a thorough change in the way we generate power, produce food, transport ourselves and manufacture the goods we need. We need to leave fossil fuels in the ground rather than create voodoo business schemes to magic away our carbon emissions. This could be done by massive state control, which would leave in place the hierarchies of power and control that got us into this mess in the first place. Ironically, Jonathan Porritt has pointed out a better way:

“But if one gets to the state of mind where you say that nobody can ever trust government and politicians again, then we are stuffed. What are we meant to do? Make it all happen ourselves?”(11)

Ultimately that is the answer. If we are to achieve both a sustainable future and a free humanity, we must make it all happen ourselves. Not as consumers, not as voters. We need an economy and a society that is geared towards meeting human needs rather than accumulation for its own sake. This cannot happen within capitalism.

Notes

1. Cited in the Commons Blog introduction page http://commonsblog.org/about_freemkt.php
2 Economic Justice and Democracy Robin Hahnel, Routledge, 2005 pp.84-89
3. Guardian March 29 2008 http://www.guardian.co.uk/environment/2008/mar/29/renewableenergy.climatechange
4. Competition for a Carbon Dioxide Capture and Storage Demonstration Project: Project Information Memorandum, Department for Business Enterprise and Regulatory Reform http://www.berr.gov.uk/files/file42478.pdf
5. Met Office paper presented at the Stabilisation 2005 conference – http://www.stabilisation2005.com/impacts/impacts_human.pdf
6. http://news.bbc.co.uk/1/hi/sci/tech/6132826.stm
7. See the free Cornerhouse publication Carbon Trading for a much more in depth account of this murky world http://www.thecornerhouse.org.uk/pdf/document/carbonDDlow.pdf
8. Carbon Markets create a muddle, Financial Times 26 April 2007 http://www.ft.com/cms/s/0/4b80ee18-f393-11db-9845-000b5df10621.html
9. http://www.guardian.co.uk/environment/2006/oct/07/climatechange.climatechangeenvironment
10. http://www.icount.org.uk/climate_chaos/23.asp
11. From a discussion printed in New Internationalist Dec 2007 http://www.newint.org/features/2007/12/01/debate/

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