To save the earth, nationalize the energy industry

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Energy is far too important to our future to be left in the hands of corporate directors and investment bankers.

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Energy is far too important to our future to be left in the hands of corporate directors and investment bankers.

by Simon Butler

Simon Butler is co-author of Too Many People? Population, Immigration, and the Environmental Crisis. This article is based on his talk presented at the Climate Change Social Change conference organized by Green Left Weekly,  in Sydney, Australia, on May 11.


The gulf between the science and the politics of climate change has never been wider. Consider the Arctic ice cap, which has lost half its volume in the five years from 2005. Experts say the Arctic ice cap is now in a “death spiral”. The region is warming two to four times faster than the global average.

If the ice cap melts, it will trigger two even more serious climate disasters: the melting of Greenland’s huge ice sheet and the release of methane gas from thawing Arctic soils and seabeds. These are two big climate tipping points: points of no return that could thrust the Earth into an inhospitable, dangerous and irreversible climate reality.

There is enough ice in Greenland to cause a seven-metre sea level rise. Last year, scientists reported that 97% of Greenland’s ice cap thawed at some point during the month of July.

There is thought to be an amount of frozen methane in the Arctic twice as large as the atmospheric carbon pollution humans have pumped out in the past 250 years. In recent years, scientists have made unprecedented finds of methane plumes gassing up from the Arctic Ocean floor.

Yet worldwide, despite the clear evidence that we must quickly change our ways, emissions are still rising faster than ever. In the 1990s, carbon pollution rose by about 1% a year. In the most recent decade, it rose by 3% a year.

In Australia, politicians still boast of tripling Australia’s coal exports and becoming the “Saudi Arabia of gas”.

Considering the gravity of the climate crisis, it’s maddening to think how relatively easy it would be to take serious climate action. We’d need about 1.5 million wind turbines around the world to replace coal-burning for energy — not too hard when you consider that the car industry alone, working at two-thirds of its capacity, made 65 million cars worldwide in 2008.

Just the unused manufacturing capacity of this single industry would be enough to build all those wind turbines in a decade.

In 2011, environmental consultants Ecofys released a report that said the world could have 100% renewable energy in 40 years. It said this would cost about 3% of world GDP a year, but would lower energy costs by about $5.7 trillion a year by 2050.

Of course, we’re told that there isn’t enough money to pay for this kind of thing. We’re not supposed to realise that half of all global trade passes through offshore tax havens, which control a third of the world’s wealth.

The money is there. Or, as Hugo Chavez once said: “If the climate were a bank, it would have been saved already.”

Along with the climate benefits, spending big on a rollout of publicly owned renewable energy would save money that otherwise will go into the hands of fossil fuel companies and the banks that fund them. That is also why every oil, coal and gas company’s business plan is to make sure that never happens.

Big capital has responded to the climate crisis by moving aggressively to protect its assets. This has taken several different forms. Many employ advertising companies to greenwash their activity. Other corporations have applied a kind of eco-mergers and acquisitions strategy, offering dirty money to the peak environmental groups unprincipled enough to accept it and corrupting them from the inside.

Perhaps most prominent among these responses is the move to fund and organise a conservative political movement of climate change denial. Insofar as it promotes a wilful rejection of scientific reality, climate denial surely is deeply irrational. But as a measure to defend an irrational system, climate denial actually makes perverse sense. Scratch a climate denier and you’ll often find a hardened capitalist class warrior.

Naomi Klein makes a good point when she says “it is not opposition to the scientific facts of climate change that drives denialists but rather opposition to the real-world implications of those facts”. That is, the science of climate change implies that we must make fundamental social changes.

In this sense, Klein says the deniers “may be in considerably less denial than a lot of professional environmentalists, the ones who paint a picture of global warming Armageddon, then assure us that we can avert catastrophe by buying ‘green’ products and creating clever markets in pollution”.

Support for pollution markets — markets that trade in “bads” instead of “goods” — as a climate response rests on a different kind of denial. The dismal record of carbon trading schemes organised overseas has barely been reported in Australia. Flooded with huge amounts of fake offset credits, the European and United Nations carbon trading schemes have collapsed.

You can buy carbon offsets from the United Nations for 1 cent per tonne of carbon. In the EU, the price has collapsed too, now selling for about $4 and pricing fossil fuels back in the market. There are so many excess permits in the EU scheme that some say it won’t bring emissions down until about 2045.

European energy firms have raked in billions from Europe’s ETS. They’ve passed on to consumers the cost of carbon credits that they received for free. In just five European countries, they gouged somewhere between 20 and 70 billion euros from the public. In at least one case, a Czech energy company used its carbon trading windfall profits to open a new coal-fired power station.

The rock bottom EU carbon price would also send Australia’s carbon price scheme, which is due to join the EU ETS in a few years, down the drain when cheap, bogus EU carbon credits flood the market. Even if likely next prime minister Tony Abbott were to keep the carbon price, its future would be incredibly, and undeniably, bleak.

But the appeal of carbon trading lies in that it offers an illusionary hope — the hope there is a “profitable solution to climate change” that avoids class conflict, that we can cure capitalism’s assault on nature with more capitalism.

There are many problems with pricing nature, but perhaps the biggest is that it assumes we can solve the climate crisis with the same measures that got us into it, that instead of making our society a lot more like nature, we can instead make nature a lot more like a commodity portfolio.

Too rarely do we hear the voices of climate justice activists in the global South, those in the frontline and who will be the first and worst affected by climate change. About 25,000 people gathered for the World People’s Conference on Climate Change in Cochabamba, Bolivia, in 2010.

The conference released its People’s Agreement, which said:

“The capitalist system has imposed on us a logic of competition, progress and limitless growth. This regime of production and consumption seeks profit without limits, separating human beings from nature and imposing a logic of domination upon nature, transforming everything into commodities: water, earth, the human genome, ancestral cultures, biodiversity, justice, ethics, the rights of peoples, and life itself.”

Much like the great US ecologist Barry Commoner, who said to make peace with the planet we must first make peace among the people who live in it, the People’s Agreement concluded:

“It is imperative that we forge a new system that restores harmony with nature and among human beings. And in order for there to be balance with nature, there must first be equity among human beings.”

Here, we could redesign Australia’s economy to make it 100% renewable and climate-friendly very quickly, if there was the political will to put the welfare of people and planet before short-term profit.

Australia’s energy system was built by public investment. A serious response to the climate change emergency would have the government do it again — this time creating many thousands of secure, well-paid green jobs in the process.

In the past few decades, state governments have privatised public energy assets or made state-owned bodies behave like private firms. In that time, energy prices have skyrocketed while energy sector employment has nose-dived.

If energy were put into public hands, and overseen by workers, unions and community bodies, it could develop an Australia-wide plan to cut greenhouse gas emissions in line with the climate science, which says we can’t delay any longer.

A non-profit, publicly owned and community controlled industry could invest in large-scale wind and solar thermal plants for all our energy, work to retrofit our homes and buildings to make them energy-efficient, and plough resources into turning coal-dependent regions such as the Hunter and Latrobe valleys into renewable energy manufacturing hubs.

A publicly owned renewable energy sector is the smart economic move too. Once a 100% renewable energy system is in place, there are no more fuel costs ever again. A 100% renewable economy is 100% guaranteed to pay for itself over time.

Energy is far too important to our future to be left in the hands of corporate directors and investment bankers. Just as we need public health and public education, we also need a job-rich, public energy sector that help us really deal with the climate threat.

The Socialist Alliance takes that argument further, saying that we cannot deal with our social and ecological crises while the 1% runs our economy like a casino. Neoliberalism says people have to sacrifice to serve the economy.

The Socialist Alliance says we should put mining, energy and banking in public hands because the economy should serve people and be under their democratic control. We think that’s a climate policy worth fighting for.