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Are economics and ecology on a collision course?

by David Cromwell

In their 1996 book Who Owns the Sun?, solar energy campaigners Daniel Berman and John O’Connor rightly declared that “democracy is a false promise if it does not include the power to steer the energy economy”. It’s a crucial point that not even Greenpeace and Friends of the Earth appear to have grasped; should we really be leaving it to the oil companies to create the solar revolution?
Climate change is arguably the greatest threat facing humanity. Society’s addiction to fossil fuels—hard-wired by corporate greed and government handouts to the fossil fuel industry in the form of tax benefits and subsidies—is driving us down a highway of self-destruction. Diverting from such a suicidal course will require a twin revolution: switching to renewable energy generation while also boosting the power of local democracy. This may seem an odd combination at first sight, but the reasoning behind it shows why opposing economic globalisation and replacing it with an ecological alternative is so important for the well-being of people and the planet.

Here in the UK, the Royal Commission on Environmental Pollution has told the government that carbon dioxide emissions must fall by 60% in the next 50 years if there is to be any realistic possibility of even “a tolerable effect on the climate”. But how likely are such “huge cuts” while transnational corporations dictate how society produces and consumes energy? According to the San Francisco-based Transnational Resource and Action Center (TRAC), “Big Oil’s long-term strategy is still dictated by the urge to explore”. New exploration and pipelines threaten the survival of peoples in the Amazon basin, Southeast Asia and North America. BP Amoco, the world’s largest solar company, is committed to spending $5 billion in the next 5 years on oil exploration and production in the sensitive environment of Alaska alone. This dwarfs the trifling sum of $45 million recently spent on its solar business division. Meanwhile, Shell proudly proclaims that it is “focusing [its] energies on developing [renewable energy] solutions” even as its annual reports project fossil fuel growth. Shell’s investment in renewables is only 10% of their spending on hydrocarbon exploration ($1 billion annually), 0.8% of its global investment ($12 billion) and only 0.06% of its global sales ($171 billion): a drop in the barrel, in other words.

In the global economy, the unsustainable expansion of corporate activities into ever-larger markets means that there is an almost irresistible force driving the formation of mega-companies of all types. Growth demands further growth, and if companies do not expand in today’s “internationally competitive” markets they stagnate and die. Smaller enterprises are swallowed up whole or trampled underfoot in the stampede to maintain or increase returns on short-term investment, or even simply to repay loan capital. The business of generating energy is no different in this respect to other industrial operations; there is an inherent trend away from small-scale, community-based enterprises towards large-scale, centralised operations. It should therefore come as no surprise that oil companies are engaged in a frenzy of mergers similar to news corporations, investment firms and biotech industries. Describing the ongoing BP Amoco merger, The Independent newspaper in London coolly reported that “the existing cost reduction plan involves 10,000 redundancies, of which 6,000 have already been achieved”. At Exxon and Mobil, job losses will exceed 9,000.

Local Energy

Rather than pursuing such a destructive energy policy—in which corporations continue to overload the atmosphere with global-warming gases, destroy jobs and damage sensitive ecosystems—society could be using local renewable energy sources. These come in many forms: wind, wave, solar, geothermal, small-scale hydro, biomass fuels. Some are available at every location around the globe. Consequently, small-scale decentralised economies would be able to make use of a range of local energy sources for local needs. On the other hand, large industrialised economies are locked into centralised power sources that convert fossil fuel or nuclear power into electricity, which is then transmitted over hundreds or even thousands of miles. This is extremely wasteful: two-thirds of the energy in fossil fuels is lost in the production and transmission process. Electricity is an indefensible luxury for 90% of our energy uses. Lighting and heating homes, for example, can be made much more energy-efficient by adopting “passive” solar building designs, low-energy lights and tight insulation.

Energy efficiency is vastly under-exploited. US journalist Ross Gelbspan points out that “as a bridge to a new energy era”, the economics panel of the UN Intergovernmental Panel on Climate Change has identified a number of “no regrets” steps. At virtually no cost, these could reduce greenhouse gas emissions by around 20%. They include such simple steps as implementing known efficiency and conservation techniques, planting more trees (to absorb carbon dioxide), and instituting international standards for energy-efficient appliances. Such measures should be encouraged at the same time as a switch to green energy. Removing fossil fuel and nuclear tax credits and subsidies which currently promote the destruction of the global environment and diverting them to windmill farms, home-based fuel cells, photovoltaic panels and hydrogen fuel plants would provide the necessary boost to propel renewable energy into the big league of global industry. Renewable energy analyst Scott Sklar estimates that for every million dollars spent on oil and gas exploration, only 1.5 jobs are created; for every million on coal mining, 4.4 jobs. But for every million spent on making solar water heaters, 14 jobs are created. For manufacturing solar electricity panels, 17 jobs. For electricity from biomass and waste, 23 jobs. 

In modern “civilisation”, the population tends to cluster in large cities in which a high-consumption lifestyle is encouraged. Profligate energy use, international trade and the concentration of millions of people in urban centres are thus intimately linked. This is why a decentralised, solar-based economy must go hand in hand with a revitalised locally-based democracy; one cannot succeed without the other. What would such a society look like? Based on suggestions presented by Berman and O’Connor in Who Owns the Sun?, a blueprint for a solar society would incorporate:

® Public ownership of energy—just as is the case with water or schools in some countries and American states.
® Massive investment in renewable energy technologies and building design, by diverting tax breaks and subsidies from fossil fuel and nuclear energy.
® Access to loans, tax credits and rebates for photovoltaics, solar water heating, wind and small-scale hydro generators, and other forms of renewable energy technologies.
® Net metering (i.e. monitoring electricity flows) and rate-based incentives, so independent home- and business-based electricity producers are paid the same price for electricity they supply to the grid as they would be required to pay for the grid power if they used it.
® Partnerships between industry, government and local communities to oversee the new green industries, in order to ensure that the public knows what is being produced in a factory, by what means, and how wastes and by-products will be managed.
® New government legislation to ensure that all this is carried out.

Local Democracy

None of the above will happen if we simply leave it to the giant oil corporations to tinker with solar renewables—as Shell and BP Amoco are doing—while they bulldoze ahead with exploration and production of new oil and gas reservoirs. Citizen control over a decentralised solar economy is in direct competition with the profit imperative of such large companies. The present policy of governments and mainstream environmental organisations is to leave it up to fossil-fuel corporations and big utility companies to bring about a solar revolution. As Berman and O’Connor warn: this will “guarantee that the coming Solar Age will arrive a century behind its time, and that it will be every bit as autocratic as today’s fossil-fuel economy”.

Decentralised renewable energy directed by local communities will only be won at the expense of the private energy monopolies who are currently engaged in cut-throat competition to protect and expand their share of the energy market. Warlike metaphors abound in company rhetoric. Earlier this year, Shell group chairman Mark Moody-Stuart glowingly described his company as “a great fleet of destroyers and torpedo boats”. It’s time to scuttle this fossil-fuel armada and launch a new fleet of solar-driven vessels fit for the twenty-first century.

David Cromwell is an oceanographer and writer in Southampton, UK. His first book
Private Planet was published later  by Jon Carpenter (Charlbury, UK).