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
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
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
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.