“Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. ” (Chapter 10 Capital, Marx)
Debra Roberts, one of the authors of the recent report from the Intergovernmental Panel on Climate Change, has said that: “the next few years are the most important in our history” (by “our” she is referring to all humanity).
“Pathways limiting global warming to 1. 5°C with no or limited overshoot [which is what we need to avoid ‘snowballing’ climate change] would require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems. . . These systems transitions are unprecedented in terms of scale.”
The report explains the need for radical transitions in land use. All scenarios rely substantial Carbon Dioxide Removal. The “unprecedented transitions” require a degree of centralised planning and international cooperation that are decidedly at odds with our geopolitical system based on private ownership, the anarchy of the free market, and competing nation states.
Until the invention of the steam engine, the creation of useful things was the work of human brains and bodies alone plus what could be harnessed from animals, water wheels, windmills and sails. Fossil fuels — compact, easily transportable, parcels of potential energy — powered the machines that unleashed today’s world-shifting productive powers. It is somewhat an accident of history that the waste product of this energy supply is a greenhouse gas.
The primary purpose of the capitalist mode of production is not the creation of useful things, but the accumulation of private profit. The capitalist, who has dictatorial control over production, is not particularly interested in what is produced, so long it sells at a profit. They are also not particularly interested in the waste products, unless they become a source of
further income or an imposed cost.
Generally, capitalists pump their raw materials through their production processes and dump the waste products wherever they can get away with it. The waste that the consumer is left with is not their problem. The rivers can die, the land can be laid waste, the air can be filled with noxious gases, so long as the profits keep rolling in. This disregard for the real material world can only go so far. Flesh and blood human beings tend to set limits on capitalism’s excesses.
In the same way that there are restrictions on the exploitation of workers, even the most neoliberal capitalist states impose environmental regulations. A nation state can legislate to protect the land, rivers and adjoining seas in its territory. But why would a nation state act against CO2 emissions that only affect the future global climate? Unlike industrial effluents despoiling a water source or human habitat, CO2 emissions have no immediate ill-effects on the general population or on local productive capacities. If the burning of hydrocarbons gives a national economy a competitive advantage, then why would a national government impose restrictions?
Around 80% of the world’s energy comes from fossil fuels. Our primary source of electricity is from coal and gas fired power stations. Almost all our transport is powered by oil. Major manufacturing processes such as cement and steel production are very fossil-fuel intensive, with technological fixes to green these industries at a very embryonic stage.
Likewise, many consumer products directly burn fossil fuels: boilers, cookers, cars etc. These fossil-fuel-dependent machines and production processes will have to be either adapted to take another energy supply or abandoned in favour of low carbon alternatives. If this infrastructure has to be adapted, then many machine manufacturers will have also have to adapt or abandon their production lines to build machines that are not dependent on fossil fuels – no more combustion engines or gas boilers means no more combustion engine or gas boiler making factories.
The obvious alternative energy supply for these machines is electricity. However, 67. 9% of world electricity generation is currently produced by burning fossil fuels. The industrial and household machines that are currently powered directly by fossil fuels could become carbon neutral technology only if electricity production itself transitioned to non-carbon based power. Electricity production and distribution would have to transition and increase to meet this extra demand. Currently electricity accounts for just 18% of global energy consumption. Lastly, the extraction and processing of fossil fuels involves mine complexes, gas and oil platforms, refineries for which there is no “transition”.
This is billions of dollars of investment that will need to be junked. In the past few years, bourgeois economists have attempted to calculate the cost of transitioning to a low-carbon economy. The IPCC report estimates that transitioning the energy sector to meet the 1. 5 º C target will cost an extra $2. 4 trillion a year. The International Energy Agency calculates that it will cost an additional $1 trillion annual investment would transition the current energy infrastructure to meet the 2ºC target.
These numbers seem very low to me. Remember world GDP is abut $80 trillion a year, as below. This is a calculation of future investment. It does not account for the huge losses involved in abandoning or adapting the current infrastructure and it concerns only the electricity generation, not the many machines involved in direct burning of fossil fuels. The Carbon Tracker Initiative argue that 60-80% of the known fossil fuel reserves are unburnable if we are to meet a 2ºC target.
Carbon Capture and Storage technology (which is still in its infancy) would only make a very small difference to this figure. The current valuation of fossil-fuel companies depends on them being able to sell their known assets. If fossil-fuel companies are prevented from doing this, they will be left with trillions of dollars of “stranded assets” of unburnable, unsellable fossil fuels. Finance company Kepler Cherveux believe this “carbon bubble” is around $28 trillion. Citigroup estimate that it could reach nearer $100 trillion.
To put these figures in context, the global workforce currently produces $80 trillion of goods and services a year. These figures are based on comparing business-as-usual scenarios for energy investment with the what is necessary for meeting global warming targets.
The purpose of these studies is to highlight the risks that future government regulation may pose to fossil fuel companies, with a view to influencing investment strategies both for the fossil fuel firms and for international financiers. That is quite different to the dismantling or retrofitting of the fossil fuel infrastructure so that our machines can run on carbon-neutral energy. The carbon-bubble theories are concerned only with fossil fuel commodities not with the vast infrastructure of machines that are powered by fossil-fuels – an infrastructure that provides the material basis for our civilisation.
Capitalists make two different sorts of investment. As commodities fall off the production line, are taken to market and sold, the money raised can be immediately reinvested in more raw materials and payment of wages. Marx calls this the “circulating capital”. However, in order to set in motion their workers and transform their raw materials into saleable commodities, capitalists have to make long-term investments in buildings, machines, vehicles and other start-up costs: so-called “fixed capital”.
Capitalists calculate on their fixed capital investments paying back incrementally over the course of their lifetime. Really only buildings are depreciated over “several” decades. Equipment is mostly depreciated over 10-20 years maximum. If a capitalist has to abandon a machine or building before the investment has paid off then they make a loss. “Stranded assets” are not simply the oil, gas and coal reserves that fossil fuel firms may be forced to leave in the ground, but the abandoned oil platforms, mine complexes, blast furnaces, jumbo jets, gas boilers and cement works.
Of course, many of the machinery and consumer products that currently exist have a shorter lifetime than those structures. Many of them are already old and can be replaced by green technology. However, the IPCC report recognises that the next few years are crucial: “The challenges from delayed actions to reduce greenhouse gas emissions include the risk of cost escalation, locked-in carbon-emitting infrastructure, stranded assets, and reduced flexibility in future response options in the medium to long-term”If each capitalist had to individually save up before making long-term investments then progress would be very slow indeed.
Banks exist to provide ready cash, they sell time. The banks take in people’s and firms’ spare cash and lend it out at interest. A large portion of the banks’ wealth is now in the form of IOUs and these pieces of paper are themselves bundled up and sold on as promises of future income. The realisation that many of these pieces of paper were worthless caused the global financial crash of 2007-8. Yet the world derivative market is bigger than it has ever been, worth an estimated $1. 2 quadrillion.
An unprecedented transition in the world’s economy would mean that a lot of capitalists who borrowed to buy their mines, oil platforms and fossil fuel dependent machines are unable to repay their debts. As the credit crunch of 2007-8 shows, large amounts of bad debt in the system can trigger a huge global crash.
FINANCIAL
The world’s financial institutions, which decide where money is invested, have trillions of dollars of future income tied up in the actually-existing fossil fuel infrastructure and will have created trillions dollars more on derivatives linked to this debt. Under capitalist norms, any radical break with business-as-usual would bring an economic crash.
Apart from these economic obstacles, there are also technological obstacles to transition to a low-carbon world. Although many low-carbon energy alternatives exist, many are still in their infancy. The resources and time have simply not gone into tackling this problem. According to Mariana Mazzucato, author of The Entrepreneurial State (2014), the problem lies in neoliberal ideology, which claims capitalist enterprise alone is creative and dynamic whereas state-run enterprises only leads to stagnation. Her research suggests that the opposite is the case. Almost all great technological innovations were created and developed by scientists and engineers working for public institutions rather than private bosses.
In the USA, the National Institute for Health (NIH) has spent billions funding health R&D leading eventually to the biotechnology revolution that is changing the face of medical science and agriculture. DARPA, CERN and NASA were central to almost all IT innovation and developed all the technologies necessary for the creation of the smartphone (internet, GPS, touch screens etc. ). Mazzucato argues that capitalist states, through strategic R&D, are central to the creation of new markets, which private firms later profit from. The hegemony of neoliberal ideology has meant not only cuts to state-run research and development, but also given private corporations greater control over once public universities.
Mazzucato’s conclusions remain quite modest — advocating a greater role for strategic “mission focussed” state sponsored R&D as a means of creating new markets – specifically in green technologies. We should take a broader view.
We live in a period of unprecedented abundance built on the most technologically dynamic 200 years in human history.
The explanation for this extraordinary technological development lies in the capitalist mode of production. As Marx explains, bigger, faster and more productive machines mean that capitalist firms can undercut their competitors on price whilst still making above-average profits. The replacement of workers with machines is also one of the most effective weapons in a capitalist’s struggle against organised labour.
Competition for the most efficient machine technology is the deep structural driver of capitalist innovation. Nevertheless, for an individual firm the aim of R&D is dictated by this search for competitive advantage. Capitalist firms tend to focus their research and development in increasing the efficiency of their current operations. Even when capitalist firms do take some innovative risks, the innovation generally fits into the existing business model and the infrastructure of the rest of the organisation.
This inherent conservatism of capitalist enterprise could be checked by aggressive state intervention. Firms that currently extract fossil fuels could be stopped. Firms that burn fossil fuels in their production processes could be forced to green their industry. Firms that build machines dependent on fossil fuels could be forced to transition to green technologies. Energy suppliers could be forced to decommission their coal and gas fired power stations and build nuclear and renewable power stations. Landowners could be forced to use their land on the basis of an environmental plan. But it is very difficult to imagine any capitalist nation state attempting any of these things.
Bourgeois politicians the world over are loth to intervene in the running of capitalist business for fear that this will put their own country at a competitive disadvantage. Precisely at the time when we need to take collective democratic control of economic decision making, the anarchy of the market is king.
In his book Socialism Makes Sense, Sean Matgamna observes: “Contrast the unbelievably laid back and irresponsible way governments are responding to the prospect of irreversible ecological catastrophe with what they did in World War One and World War Two. Then, capitalist governments, faced with fighting major wars, took great powers of direction and control over industry. . . The allocation of resources, including labour power, was subordinated to the government’s perception of what would promote or disrupt the waging of war. ”
The mainstream green movement advocates various lifestyle changes: recycle, use less plastic, buy organic, vegetarianism.
Such individual acts are not unimportant but mostly they expose the gulf that exists between the values of the working-class majority and ruling-class who own and control society. The real decisions about what is produced and how it is produced are made in the board rooms of multinational corporations, and the people making those decisions only care about the bottom line.
We need to raise our aspirations, to extend our powers beyond our own individual consumer choices, to seek power in the workplace, in the town hall and in parliament for working-class demands of public ownership and democratic control of economic life. In Capital, Marx explained how the products of our work, in the form of machines and raw materials (dead labour), stand against us (the living labour) as a vampire-like force, commanding and draining our life and vitality.
The vast fossil fuel infrastructure we have produced, the dead labour of many millions of workers, now dictates that we have to keep burning hydrocarbons for decades to come, regardless of human or environmental cost. We have every interest in taking this dead labour, the privately owned means of production, under democratic control and directing the vast machinery and infrastructure that our civilisation depends upon in a way that averts ecological catastrophe and facilitates human freedom.
If this means junking a load of polluting technology, and collapsing a monstrous pile of IOUs, then so be it. There is no hope of achieving this scale of change without an international organisation that has an interest in planning and executing the most radical transformation of economic life in human history: that organisation can only come from the workers’ movement.
