EU ditches climate change action for growth

New climate change targets announced by the European Union are a major step backwards and virtually end any chance of keeping global warming below 2ºC. They are the result of pressure from governments desperate for growth, whatever the cost environmentally.

Naturally, that’s not how the EU is putting it but the reaction from business on the one hand and climate change campaigners on the other says it all. EU officials talked up the agreement to cut greenhouse gas emissions by 40% below the 1990 level by 2030, claiming this puts Europe at the forefront of action on global warming.

But they are not fooling anyone. The Financial Times reports the announcement as a major step back from the "ambitious environmental agenda that made the EU a global green leader" adding that it is all about "the need for economic growth and industrial competitiveness".

Officials spoke excitably about a binding agreement to produce 27% of European energy from renewables by 2030. But Europe already reached 22% renewables in 2012. They are saying that in the next 17 years, Europe will achieve the same percentage increase in renewable energy that was reached in the five years from 2007 to 2011. Germany could practically reach that on its own, with its current programme of replacing nuclear with renewables.

Britain's energy and climate change minister Ed Davey fought hard to prevent even that weak ambition. He didn't want any binding agreements at all because his ConDem government has withdrawn support for renewables in favour of fracking for gas. He got his way because each country is left to work out its own renewables target.

Just to reinforce what the energy commissioner called the need for “mainstream competitiveness”, the EU – under UK pressure – has backed off from any regulation of fracking. As the Financial Times noted, the announcement “in effect gives the green light for shale exploration throughout the region”.

The Climate Action Network (CAN), a coalition of more than 120 environmental groups, said the agreement "could lock the EU into such a low level of climate action it would make keeping the EU's international pledge to stay below 2 degrees of global warming all but unattainable".

The most disgraceful response came from the UK's energy generators who want the government to use it as a basis for reducing the UK's own internal emissions target from its current 50% by 2030 level.

The industry’s trade body stated: "It has been clear for a while that others in Europe have little appetite to match the UK’s binding 50% target and this announcement merely serves as confirmation. Government must ...bring the UK back in line with Europe and send a clear signal that it is committed to ensuring the UK will remain a competitive place to invest through the 2020s."

These targets have nothing to do with climate science. They reflect life in the bubble of unreality where corporations and states live, and where nothing matters except growth, competition and profits. Governments will not act to halt climate change because the corporations will not allow them to even if the political will existed (which it doesn’t).

Today's deal is what Europe will put on the table at international climate talks in Paris in 2015. Connie Hedegaard, the European Commissioner for climate action, claimed: "We have made it possible for EU to play its role to the full..."

Europe's weak targets and failure to consider energy saving or even the regulation of fracking, sets the tone for a summit that will - like the previous summits - fail to act. It will become a game of "how low can you go" in capitalism’s race to the bottom on climate action.

Penny Cole

Environment editor

Cameron's fracking big lies

Prime minister David Cameron is the snake oil salesman for the fracking companies, making claims about jobs and he knows are false while attempting to bribe councils to speed up controversial planning applications that local people oppose.

Visiting a drill site in Lincolnshire this week, he claimed that a fracking boom would create 74,000 jobs and bring investment of £3.7 billion a year to local areas. But those are figures from the crazy free marketeers at the Institute of Directors.

Why is the government using these figures, instead of the more measured claims from research commissioned by its own environment department?

Energy consultants and engineers Amec have said even if the UK goes all out for fracking, the number of new full-time jobs at the absolute peak would be between 16,000 to 32,000. Indeed, the very same figures are quoted in a government press release published only last month!

Amec’s forecast amount to just 7% of the total number of people already employed in the gas industry; the government could achieve that increase just by making a modest investment in helping people replace out of date gas boilers!

Yet, incredibly, the government’s own web page carrying Cameron’s speech sends you to the IoD research, rather than its own!

Cameron knows fracking will not cut energy bills, because energy secretary Ed Davey told him so. “North Sea gas didn’t significantly move UK prices – so we can’t expect UK shale production alone to have any effect,” Davey said in a speech last September.

As economist Lord Stern explained, fracked gas will simply be hurled on to the world energy market. “I do think it’s a bit odd to say you know that it will bring the price of gas down. That doesn’t look like sound economics to me. It’s baseless economics,” he told The Independent.

Cameron is slavering over the US fracking boom, but gas prices there are rising. At the boom's peak they were $2 per million thermal units in 2012 but a year later doubled to $4 per million thermal units. In 2013, US power companies switched back to coal, and for the first time in eight years the country’s CO2 emissions rose, by 2%.

The volume of gas in a shale is very different from the volume that can be profitably extracted. Wells become unproductive rapidly, so more and more must be drilled to keep production up. It costs more to produce less; profits fall and investors pull out. The shale gas bubble in the US is already bursting.

The point is that whatever the fracking companies do – drill, not drill, profit, not profit – the consumer is always at the mercy of the world energy market and that never operates in their interests.

Cameron announced a series of desperate bribes aimed at overcoming local opposition. All the business rates from fracking will go to the local council, and communities will get pay offs from the frackers. Along with that paltry carrot goes a big stick. The time between application and decision will be cut to just two weeks, giving communities no time to organise opposition.

The government boasts it has created the most competitive tax regime in Europe for shale gas, even lower than in the US, so the Treasury will get very little from frackers to put towards paying off the deficit.

So why is the government going down this road? They are desperate to find new areas to attract speculators with even a sniff of profit-driven growth. But in reality they are simply pushing another asset bubble, as we wrote in Fracking Capitalism:

"The insatiable global demand for energy drives speculation in shares of the fracking companies, causing an asset price bubble that, like all bubbles, will burst. When over-optimistic production goals are not met, and it becomes impossible to go on producing the gas at the prevailing low market price, the massive debts of the fracking companies will be another phase of sub-prime junk debt."

Still, when growth at any cost is the only game in town fracking looks worth a punt. But whatever Cameron says, there is absolutely nothing in it for us. Get your copy of Fracking Capitalism and join the debate about alternatives.   

Penny Cole

Environment editor

Dash for gas exposes corporate-state fix

"Baseless economics" underlie the mad dash for unconventional gas, says economist Nicholas Stern. And whilst Cameron and Osborne link their fate to the fossil fuel corporations, Lord Stern has rubbished their claim that fracking will bring down consumer bills.

Gas, he points out, is an international commodity and will be sold to the highest bidder. UK households already experienced this effect when North Sea gas was pumped on to the world market, leaving fuel costs in the UK unchanged. And when the gas ran out, the price to consumers soared.

As we showed in last week's blog, this has been the experience in the United States where gas exports have increased but household fuel bills remain high and subject to volatile market forces.

Lord Stern lashed the Government for making no real impact assessment. Do we have enough water for fracking, especially in areas where supply is already fragile? Would fracking pollute the water supply? Will it release dangerous quantities of methane? “We’ve not had a proper discussion on these serious issues," says the economist whose pivotal 2006 report called climate change "the biggest-ever market failure".

But the Con-Dems don't care about all that. They are a desperate clique pursuing any financial bubble that might keep greasing the wheels of the state. And unconventional gas is a classic bubble with companies rampaging from one drill hole to the next, causing environmental and financial mayhem.

Dart Energy, which is seeking permission for coal-bed methane capture at the former Airth Colliery in the Forth Valley, has seen its share price collapse after its plans were thwarted by local opposition in Australia. Dart denounced new environmental regulations by the New South Wales government and pointed to the Con-Dems as an example of forward thinking on energy supply (yeah, right!).

The company had to stop trading shares whilst they formulated a new plan and yesterday issued £14m worth of new shares on the Australian securities exchange. They told investors it will kick start operations in Scotland, though they don't yet have Scottish government permission.

So this is a company in trouble by any standards, but Alex Johnstone, Conservative MSP for North East Scotland, demanded campaigners stop attacking such "legitimate businesses". He denounced what he described as “some disgraceful scenes south of the border by environmental organisations “ and said that “we need to encourage companies which have a lot to offer Scotland.”

This yawning gap between the ruled and their rulers, is pushing people to start making their own very different plans for the future. Local campaigners in the area around Airth have worked with their Community Council (Scottish equivalent of a Parish Council) to develop a Community Charter. It sets out their "cultural heritage" which they declare to be: 

"the sum total of the local tangible and intangible assets we have collectively agreed to be fundamental to the health and well-being of our present and future generations. These constitute an inseparable ecological and socio-cultural fabric that sustains life, and which provides us with the solid foundations for building and celebrating our homes, families, community and legacy within a healthy, diverse, beautiful and safe natural environment. This is the basis of a true economy, one which returns to its root meaning (oikos - home, nomia - management)."

Now the big challenge is how to see such a new vision can become our future. As an AWTW network member reports from a meeting in Havant (a possible future target for fracking): 

"People are making the connections between the system that is breaking up lives and communities through austerity, and the shortcomings of a corrupt financial system, and the law-unto themselves that are fossil fuel companies who are continuing to do what they have always done, ever more aggressively. It goes to show you the majority know who is public enemy number one - and they are beginning to see the crucial role the state plays."

Transforming the state to create a real democracy that gives people power over what happens in their communities has to be the way forward.

Penny Cole

Environment editor

George Obsorne - CEO of Britain PLC

“The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” So wrote Karl Marx and Friedrich Engels in 1848. And today George Osborne confirmed how true this observation remains.

The chancellor, or should that be the chief operating officer (CEO) of Britain PLC, announced that firms involving in fracking – the highly-dangerous, controversial, ecologically-damaging extraction of shale gas – will only have to pay a 30% top rate on production.

That compares to 62% on new North Sea oil operations, rising to 81% for established offshore fields. Leaving aside for a moment that Osborne’s father-in-law is head of a lobbying organisation for big oil and gas companies, the position is clear.

The government, any government, will use its authority to command the state to do what’s best for business – often to the detriment of a particular community or society at large.

Desperate to create new energy supplies as North Sea oil runs down, the government is hoping that a shale gas bonanza is the answer to their prayers. Hence the tax breaks announced today.

Every day there’s another example of this ever-closer alliance with business that is the hallmark of this particular period of globalised capitalism. Last night, the UK’s state-owned blood supply was sold to a US-based private equity firm.

The Department of Health sold an 80% stake in Plasma Resources UK to a Bain Capital. This company was founded by Republican presidential candidate Mitt Romney, which paid £230m for a controlling interest.

This is consistent with the approach of all governments over the last 30 years. In 2004, New Labour prime minister Tony Blair said: “Our aim is to open up the system, to end the one-size-fits-all model of public service, which too often meant one supplier fits all, with little diversity, irrespective of how good new suppliers – from elsewhere in the public sector, and from the voluntary and private sectors – might be.”

In 2011, David Cameron remarked: “From now on, diversity is the default in our public services. What does that mean? It means that instead of having to justify why it makes sense to introduce competition, as we are now doing with schools and in the NHS, the state will have to justify why it makes sense to run a monopoly.”  

As a result, public services wholly provided for by the state are an increasing rarity. Today roughly £1 in every £3 that government spends on public services goes to contractors of one sort or another. That’s about £100 billion a year. That’s a bigger proportion than in any other country, the US included.

With the state lacking expertise in contract negotiating, let alone auditing what’s going on, the scene is set for creaming off the top, also known as scamming or gaming. Last week it was revealed that government contracts for tagging offenders held by G4S and Serco had been suspended.

The firms had been charging for tagging people who were either dead, in prison, or never tagged in the first place. Even this government had to act when the truth came out. This week, an extensive report by the Institute for Government into the outsourcing bonanza, gave chapter and verse on “gaming” by all sorts of agencies. The report noted:

“Such ‘gaming’ behaviours included excessive ‘parking’ of service users with complex needs and ‘creaming’ of users who are easier to support, and therefore more profitable to serve… Such gaming was most apparent in the Work Programme where the combination of low fees and specific design choices in the ‘payment by results’ system of reward acted to discourage investment in helping those who were less likely to get back into work swiftly.”

Choosing easier-to-pass qualifications is an education form of “gaming”, often used to maintain or attract fund. One head teacher told the researchers: “Schools that turn themselves around often do it… [by] exploiting tactics to improve exam results in the short term which are not about the experience that every child gets in every lesson.”

For Osborne and his corporate chums, however, it really is one big game which ends with directors and shareholders laughing all the way to the bank.

Paul Feldman

Communications editor

Obama's greenwash won't wash

President Obama's much-publicised climate change speech this week was simply a smokescreen for the forthcoming decision to allow the second phase of the Keystone tar sands pipeline to go ahead.

Obama claimed to be boldly taking on the climate change deniers in Congress, by issuing a presidential memo instructing the Environmental Protection Agency (EPA) to use Clean Air laws to cap greenhouse gas emissions.

But there's little to get excited about here, because the level of the cap is unstated. It won't be announced until next year for possible implementation in 2015. No doubt the level will still be mired in political and legal battles long after Obama has left the White House.

Campaigners are convinced this is a sleazy trade-off to silence opposition to Keystone 2.

And it seems to be working, with the Sierra Club, one of the US's biggest environmental organisations and a key member of the anti-Keystone campaign, issuing a gushing call on its members to "thank the President".

But what Obama actually said was "climate change issues" will be "relevant" to the decision on the pipeline carrying heavy crude tar sand products from Canada to refineries on the Gulf of Mexico. Relevant maybe, but not decisive. As Tom Steyer, former hedge fund investor turned environmental activist said, curbing emissions will be meaningless if Keystone goes ahead.

Obama made much of the fact that the US is now the world's biggest gas producer. He failed to point out that this "natural gas" (sounds nice doesn't it?) mostly comes from fracking. Across the US, communities are being destroyed by this process, which pollutes water supplies and makes people ill. But he mentioned none of that.

Obama claimed the fact that the US is once again building nuclear power stations as a positive. But given that there are already some 65,000 tons of dangerous nuclear waste in temporary storage throughout the US, it is hard to see how this can be a good thing!

He used this speech to herald federal support for stepping up gas exports, but isn't that just what the Thatcher government did and look where it got the UK. The North Sea gas supplies are all gone, burned up or sold cheap on the world market.

Energy supply relies on Russian imports, pushing prices through the roof. No wonder the state is so excited about shale gas as an alternative. A new survey by the British Geological survey showing there is a greater quantity of shale gas than was previously thought is being presented as some wonderful bonanza.  

The boom in unconventional oil and gas is a mark of how desperate governments are to keep the fossil fuel market stable. The question is, do we want to pay the price in pollution and health risks? The British and US governments say yes, but then they would, wouldn't they?

Obama pointed out that since 2006 the US has made the world's biggest emissions reductions. But just as in the UK, most of this was achieved by switching power stations to natural gas.

He also claimed natural gas is a 'transition fuel' whilst the economy switches to renewables but that will turn out to be as much of a fraud as here in the UK where renewables still amount to just 7% of the UK energy mix. In fact the only fuel that increased its share in 2012 was coal!

What Obama described was a fantasy climate change policy. It delivers big profits, needs no significant public investment, pushes fundamental change far in the future and requires no change in behaviour by companies. This may be the corporate government's dream scenario but for the rest of us, it's a total nightmare.

Penny Cole

Environment editor

Shale gas will increase emissions

Supported by governments and floating on a raft of dubious claims, shale gas is the new global fossil fuel of choice for the corporations.

Explorations are taking place across the world, including deposits that would in the past have been economically unviable. Rising gas prices and new extraction methods have brought vast new areas into play and the energy corporations smell profits.

They are charming governments with claims of freedom from dependence on imported oil and reductions in greenhouse gas emissions without all the bother of developing renewable energy sources or looking to reduce consumption.

But their claims are extremely dubious. For example, the European Gas Advocacy Forum paid McKinsey to rework base data from a European Climate Foundation (ECF) report, to show that shale gas is the way to go for emissions reductions.

The ECF is furious at this manipulation of their data. Its report had in fact shown that the best and most sustainable way to reduce emissions is by urgently developing a low-carbon generation network and moving away from fossil fuels altogether.

And a report from Cornell University shows that far from reducing carbon emissions, it could be as damaging as burning coal. Natural gas is mostly methane, and researchers found that between 3.6% and 7.9% of the methane was released into the atmosphere in the course of production. Methane emissions are between 30% and 50% higher than from conventional gas.


There are also environmental and health risks associated with the process of hydraulic fracturing – or "fracking". This involves drilling a hole deep into the dense layer of shale rocks and then pumping in at very high pressure vast quantities of water mixed with sand and highly toxic chemicals to release the gas.

Communities near production facilities in the US report respiratory problems, and polluted water supplies. In the award-winning documentary
Gasland, people are shown setting light to the water from their tap.

The Cameron government has turned down a request for a moratorium on shale gas extraction from the Tyndall Centre for Climate Change Research. It said that Cuadrilla, the firm involved, “has made it clear that there is no likelihood of environmental damage and that it is applying technical expertise and exercising the utmost care as it takes drilling and testing forward”. The phrase “well they would say that, wouldn’t they” springs to mind.

Cuadrilla is working on two sites near Blackpool, and has permission to explore four more. Bridgend-based Coastal Oil and Gas is exploring sites in Wales. The Scottish midlands are said to hold the shale deposits with the greatest potential.

Protests have halted developments in the south of France, but in Poland, credited with Europe’s largest shale gas deposits, ConocoPhillips is poised to start drilling next month near Gdansk on the Baltic coast.

Based on projections that China may be sitting on 30 trillion cubic metres of shale gas reserves, the Chinese government is rushing ahead, and says it will begin production in 2015 to deliver 10% of the country’s energy by 2020.

It’s nothing short of a new profit-driven global bonanza which can entirely derail development of renewable energy sources and tie human society into fossil fuels for a further two or three generations. As long as the corporations remain in control of our energy future, this will be the continuing disastrous reality.

Penny Cole
Environment editor