The economic logic of the capitalist system is obstructing
the critical transition from fossil fuels to alternative energy sources.
Though nothing could be more urgent than curbing the amount
of coal, oil, and gas which is burnt, the market demand for the solar
photovoltaic (PV) goods is far lower than the industry’s capacity to make them.
Last year the world had 60 gigawatts of PV manufacturing
capacity, but fewer than 30 gigawatts were produced.
Far from a green revolution leading to growth and jobs induced
by the scent of profit, hundreds of small German installers are now closing
down, with the consequent loss of thousands of jobs.
After a period of expansion, the number of new solar power
installed in Europe fell sharply for the first
time in a decade last year. Globally, the solar photovoltaic (PV) industry had
installed a total of 102 gigawatts by the end of 2012, up from less than two in
2001.
But new installation fell dramatically in 2012, taking Europe ’s share of new capacity down from 74 per cent to
55 per cent in what the solar industry said was a “turning point in the global
PV market that will have profound implications in coming years”.
Now European solar panel makers battered by a declining
market have persuaded the European Union to propose import tariffs ranging as
high as 68% to reduce cheaper imports from Chinese companies. This European
initiative follows a similar US
move last year.
Solar entrepreneur Jeremy Leggett places the blame for the
developing, protectionist trade war on ‘a campaign by the companies that
dominate energy markets, seeking to hold back renewables in defence of their
interests’, leading to severe cuts in government support for alternative
energy.
Leggett says ‘the incumbents in carbon fuels and nuclear are
the root cause of the trade war. They have managed to curb soaring demand for
solar, accelerating global price-cutting beyond what manufacturing economies of
scale would have produced.’
A key contribution to the declining European PV market is to
be found across the Atlantic in the USA where the relatively cheaper
gas released by fracking has in turn reduced the demand for, and hence the
price of coal.
American coal exports to Europe
increased by 29 per cent last year. The resulting oversupply, exacerbated by a
slowdown in Chinese demand, sent European coal prices plummeting from $130 a
tonne in March 2011 to around $86 now.
So there was a sharp increase in the level of the greenhouse
gases blamed for global warming emitted by the European Union’s coal-fired
power stations in 2012, as plant owners rushed to take advantage of high
profits.
The rise was as high as 17 per cent according to Brian
Potskowski of the Bloomberg New Energy Finance research group, while Europe ’s total power plant emissions rose 3 per cent over
the same period.
“I would say that the increase in power emissions is due in
large part to the increased attractiveness of burning coal relative to gas in
2012,” he said.
In the capitalist dream world inside Leggett’s
entrepreneurial head, the leaders of the countries where solar panel production
takes place will issue ‘instructions to their ministries to think of common
global energy security rather than narrow national energy insecurity.’
The rise in burning dirty fuels confirms a recent International Energy Agency’s report which
showed that, “despite a boom in renewable energy over the last decade, the
average unit of energy produced today is basically as dirty as it was 20 years
ago”.
In the harsh reality of capitalist economics, the search for
the highest profits determines the retreat to coal and accelerating climate
change. The notion that market
mechanisms, or indeed consumer choice, can even begin to solve the eco-crisis
is a non-runner if there ever was one.
Gerry Gold
Economics editor
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