Fossil fuel warriors in charge of ConDems energy policy

As the first cold blast of winter heads down from the Arctic, more than five million UK households cannot afford to heat their homes to the standard required for good health and comfort.

And now that the unscrupulous cartel of big energy corporations has slapped a 9% increase on fuel bills – the average bill is now over £1,300 – the number of people in fuel poverty will soar.

David Cameron talked big at his Party’s conference, claiming the government would force the energy giants to offer customers the lowest price tariff but now rushes to change his tune. The best the Coalition can offer is a letter from the supplier telling the customer what their lowest – but still  unaffordable – tariff is.  

UK governments of all stripes have consistently refused to regulate for high energy efficiency leaving the market to decide. The result is most houses being built in the UK even today, wouldn’t get off the drawing board in Scandinavia.

The much proclaimed Green New Deal replaces the former grant programme with loans at high interest rates offset by small amounts of cash back for measurable energy savings. The paltry sum set aside is £200m - £125 will go for loans and £25m on publicity. It will be used up in about three months.

The truth is Cameron’s “greenest ever government” has been taken over by the dirtiest fossil fuel warriors.

Owen Paterson, the new Minister for Energy, is a climate change sceptic who described the potential for gas fracking as "one unexpected and potentially huge windfall". His policy advisor is a former lobbyist for the Australian fossil fuel industry.

Ian Taylor, boss of energy trader Vitol, gave the Tories more than £500,000. Viton is a major shareholder in companies involved in hydraulic fracturing (fracking and coal bed methane extraction, another dirty business.

Lord Browne, the former chief executive of BP is a government energy adviser. He is chairman of Cuadrilla, the UK’s main “frackers”, and is on the board of North Sea deep water oil explorer Riverstone.

Cameron’s new advisor on energy policy is Ben Moxham, who worked for Browne at BP and Riverstone.

Vitol is a major shareholder in Dart Energy, which will soon begin coal bed methane extraction at Airth, on the River Forth. This filthy technology will start with 22 CBM wells but as many as 600 could be on the cards. It is just “the beginning of a nightmarish industrial transformation for the UK as a whole”, says Elsie Walker of campaign group Frack Off.

Do you get the picture? Energy policy in the UK is being written by the fossil fuel industry, in its own profit-driven interests and has nothing to do with keeping consumer prices low or tackling climate change.

The government argues that getting at new sources of fossil fuel is essential to keep prices down. But the exact opposite is the case.

Systems such as “fracking” or coal bed methane capture or tar sand extraction, are only now economic (profitable) because of the rising price of gas as easy to access supplies run out. When gas was plentiful and cheap, they were not viable.

A recent report from IMF on the future of oil notes that keeping oil production going at current levels will bring about a doubling of the cost in the next decade. The report speaks of “economic peak oil”, a point beyond which importer economies cannot sustain production and there is runaway inflation.

The IMF calls it a "shock" that will have "large and persistent" macro-economic effects and it calls on governments to invest heavily in alternative energy sources.

But these arguments will fall on deaf ears because government energy policy is about the corporations and the profits.

This winter, more than 20,000 people in the UK will die from cold and many more become ill or get into debt. It is time to put all energy resources into a new commons and end the corporations’ right to profit from such misery.

Penny Cole

Environment editor

It's capitalism, stupid!

In the ominously quiet moments as the world awaits the next body blow in the struggle between the ill-matched but inseparable financial and economic systems, some of those on the sidelines look for an explanation that goes beyond greed.

They’re hoping to find something that might help to avoid a re-occurrence of the catastrophic series of implosions that mark the passing of the shadowy speculative organisations populating the world of fantasy finance. Or at least, they hope to provide an early warning of the sudden collapse of demand that wrecked the profits of corporations overproducing beyond the capacity of the market and the planet.

If this all seems a bit late in the day, this is because they were caught up in the hysteria of never-ending growth promised by regulators, politicians and financiers.

The Bank of England, which sat back entranced as a series of speculative bubbles grew in size, has published a talk given last month by Andrew G Haldane, its executive director responsible for financial stability. With a job title like that you’d be forgiven for thinking he’d be well ahead of the game – but, alas, he wasn’t and he still isn’t.

In a paper entitled “Rethinking the Financial Network”, and clearly written before the global threat of a H1N1 flu pandemic gripped the media, Haldane compares the panic effect of the 2002 Severe Acute Respiratory Syndrome (SARS) outbreak in China to the collapse into bankruptcy of Lehman brothers on September 15, 2008 and its catastrophic impact on global markets.

In his analysis of the financial system, Haldane draws on the theory of complex, adaptive systems, learning, he says from ecology, epidemiology, biology and engineering. This muddle-headed, eclectic approach is not new. People, among them Andrew Lo, director of the Massachusetts Institute of Technology’s Laboratory for Financial Engineering, have been using it for years to justify and explain the operation of free, in the sense of unregulated, stock and other financial markets.

The Green New Deal from the New Economics Foundation and “Prosperity without Growth” from the Sustainability Commission, both use it to argue for intervention. Coincidentally, Lo popped up yesterday in a Financial Times interview misusing Darwin’s theory of evolution and comparing the current crisis to the impact of a meteorite on the dinosaurs.

Haldane says that the evolution of a complex network of increasingly similar financial institutions meant that “sharp discontinuities in the financial system were an accident waiting to happen. The present crisis is the materialisation of that accident.” His prescription is better information, better regulation, and restructuring “to reduce the financial network’s dimensionality and complexity”.

In attempting to borrow from other sciences, Haldane, the NEF, Lo and the others essentially acknowledge that classical economic theories, whether of the free-market or interventionist schools, are dead in the water. But in ascribing the source of the current problems to increased complexity and external accident they completely miss the point about the nature of an overarching, objective, contradictory social system known to humanity as capitalism.

Crisis is an intrinsic part of the capitalist system of social relations and manifested itself long before the appearance of the complexity that Haldane and others describe. As far back as 1848, Marx and Engels in their Communist Manifesto already observed how bourgeois society “is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells” and how the history of capitalism, then comparatively young, was one of “the revolt of modern productive forces against modern conditions of production” and how “commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly”.

In other words, the problem is not at all that complex: it’s capitalism, stupid!

Gerry Gold
Economics editor

G20 won't bail out the eco-system

Whatever the communiqué issued by G20 leaders says today, it will not address the climate crisis. Rather it will present the shared thinking of governments desperate to get the global capitalist economy rolling again at any cost. 

Just what a disaster this would be is set out in a report published this week by the Sustainable Development Commission (SDC), created to advise the government, but consistently ignored by it. 

Prosperity Without Growth moves within an inch of stating that capitalism itself is unsustainable – but then falls at the last hurdle! It rejects the idea that rogue individuals or incompetent regulators are responsible for the crisis, insisting that the economy “was undone by growth itself” and adds: 

“For the last five decades the pursuit of growth has been the single most important policy goal across the world. The global economy is almost five times the size it was half a century ago... This extraordinary ramping up of global economic activity has no historical precedent. It’s totally at odds with our scientific knowledge of the finite resource base and the fragile ecology on which we depend for survival. And it has already been accompanied by the degradation of an estimated 60% of the world’s ecosystems.” 

The report boldly questions the thinking behind the idea of a “Green New Deal”, which has become fashionable as an allegedly sustainable way of getting the economy out of its crisis. After offering some faint praise for a “green stimulus”, the report scathing adds:  

“Nonetheless, the default assumption of even the ‘greenest’ Keynesian stimulus is to return the economy to a condition of continuing consumption growth. Since this condition is unsustainable, it is difficult to escape the conclusion that in the longer term something more is needed. A different kind of macro-economic structure is essential for an ecologically-constrained world.” 

The questions that follow are what is this new “macro-economic structure” and how are we to achieve it? In his foreword, the report’s author Tim Jackson, economics commissioner of the Sustainable Development Commission, says a return to “business as usual” is not an option. Prosperity for the few founded on “ecological destruction and persistent social injustice” is no foundation for a civilised society, he rightly insists.   

Yet the 12-point plan the SDC then puts forward for consideration by the world’s leaders could never be implemented within the present economic and financial framework. Because the problem we face is not simply about “growth”, but “growth in pursuit of profit”. And if capitalism were to somehow move outside of the pursuit of profit – it would no longer be capitalism. And you can’t see capitalism voting to put itself out of business anytime soon. Put that way, it’s inconceivable that the SDC’s admirable programme can be achieved without transforming the fundamentals, creating a sustainable not-for-profit economy based on co-ownership and co-operation. 

The report says that “questioning growth is deemed to be the act of lunatics, idealists and revolutionaries” but even if that is true, our ranks are growing. The vast majority of those on Saturday’s “Put People First” demonstration and yesterday’s anti-capitalist actions know only too well that the G20 leaders and the system they represent will never “put the planet first”. They can only ever “put profit first”. That’s why Obama and Brown constantly talk about the “need to restore growth”. 

“Nature doesn’t do bailouts” was one of the slogans of the climate camp, pitched yesterday outside the City of London Climate Exchange. And the Archbishop of Canterbury said last week that God would not be stepping in to halt climate change either. So then human society -  the conscious and most active part of nature – will have to do it, rescuing the planet’s eco-system and us at the same time.

Penny Cole
Environment editor

Wales grapples with 'green' realities

The economic slump is bringing about a transformation in the way people live and how they think about themselves and the future. They are soberly looking for new ideas and ways forward that address their very real anger and fears. But at the same time, there is enormous ideological pressure to keep them tied to the status quo, as I heard yesterday.

At a conference in Cardiff exploring green economic futures for Wales, the journalist and green campaigner Colin Hines peddled the illusion that “Mandelson and Brown are listening”. Having no answers themselves to the crisis, he claimed that ministers are ready to grab at proposals in “A Green New Deal”, which he published last year through the New Economics Foundation.

It is “the answer to their prayers”, Hines claimed. It would solve unemployment by training thousands of people to bring every home up to energy efficiency standards, along with other green measures. The reality is somewhat different, however. The real face of this government was shown last night in the vote in the House of Commons, where New Labour used every underhand pressure to force through support for Heathrow expansion.

Hines and his supporters are selling pie in the sky. The only jobs Brown is interested in are those that can provide short-term gain for the corporations in crisis. In fact, the corporations welcome unemployment at this moment. Some 80,000 jobs a day are being lost across the globe and employers are using fear to force down wages and conditions of the workers that remain.

The only green measures Brown will implement are greenwash measures. For example, the shortlisted proposals for tidal power at the mouth of the Severn announced on Tuesday include at number one, an expensive and ecologically catastrophic 10-mile barrage. It would cost £14bn to build, but would produce 8GW of power. At the same time the government has withdrawn subsidy to small-scale alternative energy projects, pending a new scheme which may, or may not, be implemented in 2010 – when the world will be a very different place.

The conference, sponsored by Science Shop Wales, noted the massive contradiction in green policies adopted by the Welsh Assembly. Alongside a commitment to reducing emissions is a continued commitment to growth at all costs, desperately trying to capture foreign direct investment to create jobs. As one of the speakers said, “how 20th century”. Those days are long gone. As the Tata global corporation sheds 1,200 Corus Steel jobs in Wales, the Assembly is desperately trying to convince Welsh people that it can keep the show on the road. It cannot.

At a Transition Town meeting in Llandeilo, Carmarthenshire, the previous evening, A World to Win was able to put forward another viewpoint - that the economic slump means that all measures to reduce emissions and protect eco-systems will be abandoned, unless they can be proved to deliver some short-term profits.

What is needed is a radical transformation of ownership – both of land and resources - and democratic control over the corporations and public services. Only an end to policies that put profit ahead of people – whether in climate change, health, transport or production – can save society from a terrible descent into chaos.

But, face it folks, this is not going to be brought about by the current system of unrepresentative, unresponsive, parliamentary democracy. So it was great to have a chance to launch the People’s Charter in Wales – where the original Chartist movement was such a power in the land and where the most radical solutions were considered by the men and women who carried out the Newport Uprising.

Penny Cole
Environment editor