What’s stopping a transition to renewable energy?

Brett Christophers
THE PRICE IS WRONG:
Why capitalism won’t save the planet
Verso, 2024

reviewed by Martin Empson

As its subtitle indicates, Brett Christophers has set himself an ambitious task with his new book. After all, given the multiple ecological, economic and social crises humanity faces, activists must understand capitalism’s inability to prevent environmental breakdown, war and economic crises. But readers hoping for a study of 21st century capitalism’s multiple failures will be disappointed. Christophers focuses on just one, albeit fascinating, aspect of capital’s failure — electrical energy — and misses the big picture.

Energy is, of course, fundamental to both human existence and the functioning of capitalism. It is central to production, as well as the heating and lighting systems that most people take for granted, and the energy sector is by far the single largest producer of greenhouse emissions.

Examining this sector in detail should tell us a great deal about capitalism. The problem is that Christophers does not believe that generalisations about capitalism’s destructive environmental behaviour are possible. He argues that capitalism’s failure to deliver environmentally sustainable practices is not because of the nature of its production, but rather because doing this is not profitable enough. “If greening business were more profitable than business as usual, then, certainly, capitalism would comprehensively be going green.”

There is some truth to this, but it is not sufficient to explain capitalism’s destruction of the environment (or anything else). While Christophers quotes Karl Marx approvingly in terms of understanding capitalist production as being geared towards profit, he rejects the further insights that Marx developed from this.

He explicitly rejects the ecological Marxist view that capitalism is inherently anti-ecological. On the contrary, the problem is just that capitalism in its present form is “ill-equipped” to replace fossil fuels with renewables. “If greening business were more profitable… capitalism would comprehensively be going green.”

“The environmental impact of capitalism is contingent, not fundamental. If it is true that contemporary capitalism unavoidably destroys the environment, then it is true only in an indirect sense: which is to say, because the underlying search for profit — capital’s true animus — and thus for growth itself happens to be environmentally destructive.”

For Marx, the issue wasn’t just growth, but the fact that the construction of the capitalist economy brought with it the destruction of humanity’s relationship to the natural world, creating a new alienated reality which saw nature subordinated to the accumulation of capital. Growth in this sense is part of the inescapable logic of capitalism and the energy system is an integral part of that system. It must be understood in the wider context of capital accumulation.

That said, Christophers’ forensic dissection of the energy system, in the various forms it takes across the globe, is illuminating and often devastating. One example will suffice to demonstrate his wider argument.

When Texas experienced particularly bad weather in February 2021, almost half of the state’s electrical generating capacity failed. Inevitably, right-wing pundits blamed the wide use of wind turbines, ignoring the fact that much of the state’s natural gas-based infrastructure also failed. Because the problem wasn’t technology. High demand for energy drove up the spot (not contracted) price for electricity, which is exactly how the so-called free market is supposed to work. The price went from $50 per megawatt hour to $9000, and some companies made out like bandits. But not all.

The owners of storm-damaged wind-turbines were contractually obliged to deliver energy they couldn’t produce, so they had to buy at prices much higher than they would get paid, which meant taking on heavy debts. They just couldn’t afford to be in business, and the market collapsed.

The 2021 market failure is one of many in Brett Christophers’ study of energy generation under capitalism. It illustrates his central point—that leaving energy generation, distribution and development to the market neither reduces carbon emissions nor keeps down prices. Instead, it leaves consumers and the economy as a whole vulnerable to the irrational behaviour of the capitalist system.

It is no accident that the energy system has ended up like this. In the Global North it is the consequence of three decades of privatisation, and in the Global South as Christophers points out, the World Bank “aggressively pursue[d] the commercialisation and corporatization of, and private sector participation in, developing-country power sectors.”

The consequence is an energy system geared, not toward supplying energy cheaply and sustainably, but for profit. Indeed, this is the root of the problem. Cheaper renewables should be more profitable, but for the electrical energy system as a whole, they aren’t reliably profitable, and they are rarely profitable enough.

Christophers shows that declining costs for renewable energy have not caused profit-driven energy companies to choose them. Quite the opposite. In their quest for the biggest return on investment, energy producers routinely abandon renewable energy in favour of fossil fuels. In spot markets, where investors must make money or die, “expected profit is highly uncertain and unpredictable.”

Renewable energy is just not very good at delivering profits in a free market system. This is not lost on the fossil fuel industry. Christophers recounts how a group of Franciscan friars, who owned $2000 worth of Exxon shares, asked Exxon CEO Rex Tillerson why he didn’t invest more in renewable energy. Tillerson’s answer: “We choose not to lose money on purpose.”

Christophers demonstrates — conclusively and in detail — that market forces cannot deliver the sort of energy system that we need for a sustainable future. Indeed, there is a “serious question mark” over whether a single renewable energy facility anywhere has been built without state support. So central is government support that for some renewable energy companies it is the only thing that keeps them interested. Despite politicians’ rhetoric, the reality is that the supposedly private energy system is dependent on government intervention:

“Even before the energy crisis of 2021-2 … more than half of the countries in the EU — the very home, materially and symbolically, of marketized electricity — had some form of retail price control. And, everywhere, the development of renewables remains propped up by government support.”

Electricity is simply “not a suitable object for marketization and profit generation,” so transitioning to a renewables-based energy system will require dumping the free-market and putting it all — from power plants to energy grids — under state control. Half-way houses, including strategies that rely on profits from nationalised renewable energy companies, are doomed, because energy markets simply cannot work while trapped in the wider capitalist economic logic.

While Christophers’ analysis of the energy system is informative and often insightful, the conclusions he draws are inadequate. Focusing narrowly on electrical energy systems, Christophers concludes that their weaknesses can be overcome by state control and ownership, so that production decisions can be made with no concern for private profit. Less profitable but greener technologies could then supplant fossil fuels.

But even in that case, energy production would still be subordinated to the whims of capitalist production and the wider problems caused by capitalist accumulation.

While no socialist would oppose struggles for nationalized energy systems, we also must be aware of the realities of corporate domination. The energy companies, some of the most powerful institutions that have ever existed, would certainly use their wealth and power to undermine any government that tried to take them over. We have the example of Chile in 1973 as a salient reminder of the limit of this strategy. And even if a completely state-owned electrical system was formed, its freedom to act independently would be severely constrained by the broader capitalist system.

Christophers’ extensively researched book is well worth reading. His critique of the free market in energy teaches much about how capitalism works. Unfortunately, readers seeking a wider critique of the whole system must look elsewhere.