Green capitalism, an appendix

I previously blogged on this topic at the end of last year. My main argument was that "it underestimates the flexibility of capitalism to think there can be no moves towards addressing climate change", that sections of capital stand to make big money from a shift to renewable energy, and are mobilising themselves politically to pressure states in that direction. The folks at Aufheben asked me to expand the argument into a proper article, so I did a bit more research, talked it over with them, and it appears in the new issue which is out at the moment. I don't want to cover too much of the same ground here, but rather to briefly draw attention to a few articles which have subsequently appeared in the business press.

The first of those, from the Financial Times, is CBI calls for green energy backing. The CBI is the Confederation of British Industry, the bosses' union-cum-lobby group. The FT writes:

In one of the most comprehensive assessments of the green economy in the past five years, a CBI report said the UK’s £122bn low carbon sector accounted for about a third of all growth in the past year and employed close to 940,000 people. Under the right conditions, it could turn the UK into a frontrunner in low carbon goods and services and cut the trade deficit by half the report said.

This seems significant, because it's not just the capitalists with a direct stake in renewables making the case, but the CBI as a whole. The argument I've made previously, which is expanded in the Aufheben piece, is that the 'green capitalists' have been getting their act together politically in coalitions like We can lead in the US, and the Corporate Leaders Group on Climate Change in the UK. So far, they've been relatively marginalised by the dominant 'fossil capitalists', and not done much beyond issue the odd 'communiqúe' calling for action. This has lead many critics to see it as just greenwash. But the stance of the CBI suggests the balance may be shifting in their favour. The Aufheben piece suggests that the longer the economic crisis goes on, the more previously marginalised views like those of the 'green capitalists' might become mainstream. Is the CBI's stance a sign of that happening?

The second piece is from the Economist, Complete disaster in the making: the world’s only global carbon market is in need of a radical overhaul. This piece is about the 'Clean Development Mechanism' (CDM) of the Kyoto Protocol. Basically, this allows polluters to invest in emissions-reductions where it's cheapest (i.e. poorer countries), and thus earn credits to off-set against their emissions quotas. The fatal problem is that the Kyoto Protocol placed no limits on the fastest growing polluters (China, India, Brazil...), the US - until recently the largest greenhouse gas polluter - has already withdrawn, and that the Protocol is expiring without replacement after international talks repeatedly failed. Consequently, the CDM has functioned mainly as an appendage to the EU's Emissions Trading Scheme (ETS). However, the ETS is chonically over-supplied with emissions credits. The Economist piece writes that:

An oversupply of permits to pollute is an endemic problem. A recent report by Thomson Reuters Point Carbon, an information provider, found that supplies of a different emissions right under the Kyoto protocol, called an “assigned amount unit”, outstripped estimated demand by over a thousand times.

That the market-based mechanisms aren't exactly inspiring is unlikely to surprise libcom readers. Though it has to be said, the over-supply of credits in the EU ETS is partly deliberate. In theory, it's to reduce corporate resistance and increase take up, before throttling the supply and thus prohibitively increasing the price of greenhouse gas emissions in a later phase. Whether that happens or not... I'm not holding my breath. But it partly depends on the balance of power between the 'fossil' and the 'green' capitalists, since it's a matter of state/EU policy. Other factors are the wider geopolitical solution, as the more countries who take similar action, the less impact higher emissions prices would have on the EU's relative competitiveness (and the less chance it would lead to 'carbon leakage', i.e. relocation of emissions-intensive businesses to less regulated regions). Which brings us to China.

The final piece, also from the FT, is Could self-interest green China’s economy? It's a couple of years old, but like my previous blog, this piece notes that China is simultaneously the world's largest greenhouse gas emitter and the world's leading investor in renewable technology. This creates a contradictory self-interest, but the FT piece argues China's leading position in renewables tech might make it self-interestedly shift in that direction. I wouldn't say this is likely, but it's certainly plausible. As China's far less developed than the US, it's far less path-dependent on fossil fuels. When you're building cities from scratch it's easier to incorporate the latest renewable energy and energy efficiency infrastructure than if you're retrofitting it to existing housing stock, business premises etc. The FT sums this up:

This argument moves the debate on from “climate change is bad, but development is our first priority” towards “development is our first priority, and climate change may threaten that"

If that's really happening, it's got huge implications for the geopolitics of climate change.

I'm still pretty pessimistic, and think that capitalism's locked on course for 4^oC warming or more by 2100. But I wouldn't rule out a pretty rapid shift to renewables if the 'green capitalists' really are in ascendance. And of course, being capitalism, such a shift would likely come at a high social and environmental cost (climate change isn't the only way capitalism fucks up the environment, and I wouldn't be surprised if it simply displaces the most urgent crisis into other areas). But who knows, maybe we'll all be insulating lofts under 'green workfare' in the next few years, as states scramble for the leadership of the emerging 'green economy'.