revolutionary reflections | ‘Green Capitalism’: a critical review of the literature: part 2

Part 2 of Stephen Graham’s critical review of the ‘Green capitalism’ literature examines the relationship between capitalism and fossil fuels. Discussion focuses on the particular advantages that ‘energy dense’ fossil fuels afford capitalist production, and examines some of the major barriers that impede the transition to a future based on renewable energy sources.

See Parts 1 and 3. A pdf of the whole article is available here.

Part 2

2.1. Capitalism and fossil fuels

It is now widely accepted that the dangerously high levels of accumulated carbon dioxide in the atmosphere are in large part the historical result of the activities of (certain groups of) humans. It is also commonly accepted that fossil fuel combustion constitutes a key driver of CO2 emissions.[1]

Fossil fuels have been central to capitalist production for over two centuries.[2] Although capitalist social relations did exist prior to Watt’s invention of the double-acting steam engine[3], the development of steam power as the prime mover in capitalist industry enabled the expansion of capitalist social relations on a scale hitherto unimaginable. As Altvater notes:

Although something like capitalist social forms occasionally could be found in ancient societies (in Latin America and Asia as well as in Europe), they could not grow and flourish without fossil energy… growth was limited, and in fact the average annual growth rate was close to zero before the industrial revolution of late eighteenth century. But in the course of the industrial revolution economic growth rates jumped from 0.2% to more than 2% a year until the end of the twentieth century.[4]

Perhaps the most influential historical narrative regarding the marrying of fossil energy to capitalist production suggests that, through their combination, manufacturers were at last able to transcend the historic limits imposed on production by a lack of available land for growing wood fuel (the ‘land constraint’).[5]

Wrigley set out to demonstrate the importance of this limitation by converting amounts of coal consumed into the acreage of woodland required to produce an equivalent amount of energy.[6] For example, Wrigley states that in 1750, the coal produced in England would have required 4.3m acres of woodland – 13% of national territory; by 1800, this figure had risen to 11.2m acres (35%). By 1850, the amount of woodland required to match energy from coal was 48.1m acres – or 150% of national territory. Considering the geographical confines of the state boundary, the economic limitations imposed by wood-fuelled production are clear. On Wrigley’s view, as coal-fired production entailed expanding down into the earth, instead of across its surface, its utilization unleashed the power of industrialist capitalist production held in fetters until then.[7]

However, as Huber notes, although forms of energy are central to the ways that people reproduce themselves, it is necessary to steer clear of any kind of ‘energetic determinism’ that ‘divorces historical development from its true social and political basis’. While energy matters, ‘it is important to retain a perspective of dialectical complexity that emphasizes the mutually constitutive relations between energy and society’.[8] This consideration will inform the analysis that follows.

The rise of fossil production

Prior to the industrial revolution, around 80-85% of all mechanical energy came from human and animal sources; the rest came from wind and water.[9]

During the 19th century, the shift to fossil fuels displaced human muscles as the core productive force and placed machinofacture centre stage. By freeing workers from certain types of manual labour, fossil fuel-powered machines allowed for an ever more complex division of labour and opened increasing possibilities of ownership of the means of production by an emerging capitalist class over propertyless workers shorn from the means of subsistence.[10] This, Huber suggests:

…provides the social basis for the development of the productive forces based on capital… The whole notion of workers divorced from the means of production began to make social sense only in the context where the worker is no longer a prime physical force of production.[11]

He adds that:

…the emergence of large-scale fossilized production hastened the generalization and extension of the wage labor relationship on a scale heretofore unseen.[12]

Malm, too, examines the changes in social relations that fossil fuel-based capitalist production enabled. His analysis of the transition from water to steam power in the British cotton industry from the 1820s onwards is useful for our analysis of the relationship between fossil fuels and capitalist production today.[13] In his study, he challenges the popular view that 1) coal replaced water power as the former was more cost-effective; and 2) that manufacturers seeking to utilise the latter were critically hampered by a shortage of suitable sites.

Malm instead demonstrates how steam power displaced water power even though water-powered mills were cheaper to run than steam plants, and although plenty of suitable sites for water mills remained. Contrary to the commonly-held view, he argues that steam power came to dominate in the cotton industry as fossil energy enabled capitalist enterprises to move from often isolated riverside sites – where mill output depended on natural fluctuations in water levels – to the emerging industrial towns where a concentrated oversupply of labour power had settled.[14] Here, capitalist manufacturers could expand production by drawing on reliable reserves of cheap, expendable labour; and no longer at the mercy of seasonal river flows, capitalist production could potentially take place 24 hours a day, seven days a week.

These advantages offered by fossil (‘stock’) energy over renewable (‘flow’) sources proved central to the development of early industrial capitalism. They remain no less important to capitalist production today.

This point is emphasised by Altvater, who suggests that, compared to other energy sources, fossil fuels hold so many advantages for capitalist production that they fulfil ‘almost perfectly the requirements of the capitalist process of accumulation’.[15] Unimpeded by low windspeeds, unpredictable water levels, or the amount of sunlight available at particular times of day, fossil energy allows surplus value extraction to continue around the clock. As the early cotton capitalists discovered, once production is based on fossil fuels, energy availability need no longer be a primary factor in the location of an enterprise; today, as energy resources (particularly oil and liquid natural gas (LNG)) can easily be transported around the globe, manufacturing can take place wherever labour costs are cheap and environmental regulations lax. By contrast, any dependence on place-bound energy would restrict such freedoms ‘as it cannot be assumed that cheap labour and political stability coincide geographically with abundant flows of WWS [wind, water, solar] and low energy prices’.[16]

Another advantage of fossil energies over renewable sources relates to their high Energy Return on Energy Input (EROEI). While it must be noted that not all fossil fuels are equal in this respect – consider the energy required to obtain a barrel of oil from a Saudi field compared to that needed for the same amount from the Canadian tar sands – compared to renewable sources, fossil fuels can be considered a ‘thick’ energy source. Its entropy is low, its energy concentration very high, and therefore it yields a high energy surplus.[17]

So central have fossil fuels been to capitalist development to date that some deny the very possibility of a non-fossil fuel-based capitalist social formation. Eco-socialist thinker Ian Angus, for example, believes that fossil fuels ‘are not an overlay that can be peeled away from capitalism, leaving the system intact’. Instead, they are ‘embedded in every part of the system’.[18] Arguing along similar lines, Altvater suggests that the advantages of fossil energy for the capitalist system make this fuel source ‘unique and indispensable’.[19] In contrast to many green growth advocates, he argues that ‘[t]oday, and possibly for ever, it is impossible to power the machine of capitalist accumulation and growth with ‘thin’ solar radiation-energy’ as this lacks the ‘potential of time and space compression, which “thick” fossil energy offers’.[20] Kallis, too, argues against the possibility of a capitalist accumulation regime powered by non-fossil energies. He suggests that if a technology existed that provided abundant, cheap and clean supplies of energy, capitalism would have taken it up by now. The problem, therefore, is more fundamental:

The coal lobby did not prevent the development of oil, and neither did oil interests block the development of natural gas. If renewable energies could sustain growth, they would have been adopted as quickly as fracking was. My hypothesis is that renewable energies are not adopted because they cannot sustain an economy of the scale and pace of the contemporary global economy.[21]

Such views run counter to the general green capitalist outlook, which (at least ostensibly) considers renewable, non-fossil energies as the de-carbonized power source for the ecologically sustainable capitalist production regimes of the future.[22]

To enable us to move on to the next part of the discussion, I will here draw a preliminary conclusion from Part II’s findings so far. Fossil fuels have been central to the development of industrial capitalism to date. Compared to energies derived from wind, water and sun, ‘thick’ fossil fuels offer certain advantages that match almost perfectly the needs of capital accumulation. Primarily, these are: the means to extract surplus value 24 hours a day, seven days a week, regardless of weather fluctuations; the capacity to shift production to wherever labour is cheap and ‘flexible’; and the ability to manufacture commodities where environmental protections are weak.[23]

Even with due consideration for these advantages, in theory there may be no reason to doubt the potential future existence of a capitalist social formation powered entirely by wind-, water- and sun-based energies. In practical terms, however, such an outcome is extremely unlikely. More likely is the continuation for the foreseeable future of dangerously high levels of fossil fuel combustion, despite the well-known ecological consequences of such a course of action. I will now set out a basis for this suggestion.

2.2 Barriers to a renewable energy transition

  • Fossil fuel corporations

One significant barrier impeding a shift away from fossil energies is the political and economic power of fossil fuel corporations. These businesses rank among the largest in the world.[24] While we must be careful not to overstate their influence, it is now well known that these institutions have for decades sought to obfuscate the negative environmental consequences of their operations, and have spent huge sums in efforts to thwart action on climate change.[25]

Given that fossil fuel combustion is a key driver of rising CO2 emissions, preventing runaway climate change will require that most known fossil energy reserves remain in the ground; exploration for new reserves must also cease. However, as Mahnkopf suggests, ‘financial investors who currently spend large sums on finding new reserves are not prepared to be directed away from high-carbon options’.[26]

The existing investments in fossil fuel infrastructures are huge. According to Smil, the global network of oil and gas-fields, along with all the coal carrying vessels, oil and Liquid Natural Gas (LNG) tankers, treatment plants and refineries ‘constitute the world’s most extensive, and most costly, web of infrastructures’.[27]

The following extract from the UN’s 2011 World Economic and Social Survey highlights the scale of the problem:

There are thousands of large coal mines and coal power plants, about 50,000 oilfields, a worldwide network of at least 300,000 km of oil and 500,000 km of natural gas pipelines, and 300,000 km of transmission lines. Globally, the replacement cost of the existing fossil fuel and nuclear power infrastructure is at least $15 trillion-$20 trillion. China alone added more than 300 GW of coal power capacity from 2000 to 2008, an investment of more than $300 billion, which will pay for itself only by 2030-2040 and will run maybe until 2050-2060. In fact, most energy infrastructures have recently been deployed in emerging economies and are completely new, with typical lifetimes of at least 40-60 years. Clearly, it is unlikely that the world will decide overnight to write off $15 trillion-$20 trillion in infrastructure and replace it with a renewable energy system having an even higher price tag.[28]

An unwillingness to write off such investments leads to inertia. As David Harvey shows in Limits to Capital: ‘When capitalists purchase fixed capital, they are obliged to use it until its value (however calculated) is fully retrieved’.[29] And as Malm notes, this is not simply about recuperating expenses:

…once a power plant has paid back, the owning firm will be wise not to knock it down, but rather keep it in operation for as long as possible. Already paid for, it can now be treated as costless fixed capital and used a base for capturing larger market shares; decommissioning the complex and constructing another would be to start all over again.[30]

While fossil fuel corporations are hugely powerful, they are, however, not invulnerable. As Warlenius notes:

Capitalism has always developed through phases of destruction and phases of creation, and the substitution of one technology or energy regime for another might be a threat to jobs, firms, even to people, towns and landscapes, but not necessarily a threat to capital as such, since it will relocate to expansive, profitable sectors.[31]

Indeed, Holgersen and Warlenius suggest that the ‘creative destruction’ of fossil fuel infrastructure could pave the way for the resolution of both the economic and climate crises. For the former, capital must be destroyed; for the latter, fossil fuel infrastructure must be demolished. However, the difficulty comes – particularly when one considers the dense web of links between fossil fuel corporations and capitalist states – in ensuring that the ‘right’ type of capital is destroyed. [32]

Their argument, however, assumes that renewable energy sources will be sufficient to drive the capitalist economies that emerge – a claim questioned above; they also prioritise climate change over other ecological considerations. This stance constitutes what I call a ‘weak’ conception of green development.

  • Power and decentralisation

Renewable energy lends itself to local, decentralised production and distribution. This is considered a virtue by many.[33] However, as Warlenius notes, such thinkers would be naïve to assume that this decentralised vision is shared by capital or social elites.[34]

In terms of geopolitical leverage, as no single country can dominate the source of solar energy, it cannot be weaponized as an imperial tool.[35] And although locally-based production would eliminate the need for much of the centralised grid system, minimise transmission losses, and help manage supply and demand, the market domination of a few energy companies ‘leads to a preference being given to central, grid-based approaches that retain their market power (offshore wind parks, nuclear energy and project proposals for huge solar power generation facilities)’.[36]

For Warlenius, such considerations make it:

…hard to imagine industrial capitalism, based on competition, commodification and monopolization, willingly adopting an energy system based on a decentralized network of rather cheap and low-tech devices generating electricity from wind, water and sun… Probably the concentrated ownership of capital will fetter the development of such a decentralized energy system, whose full potential could only be developed under different circumstances.[37]

  • The neoliberal conjuncture: bad timing

As Malm points out, the hyper-globalised economy of the current conjuncture can only be understood as a ‘most unpropitious moment… for embedding the world’s energy system in the spatial and temporal matrix of wind, water and sun’.[38]

Given neoliberalism’s (ostensible) aversion to state intervention, as well as to any forms of potentially profit-inhibiting regulation,[39] politicians operating within the limits of its normative frame are far from ideally placed to deal with the climate crisis (let alone ecological crises more broadly).[40] For Warlenius, this is a classic case of ‘bad timing’:

…a deal on climate change agreed under the Fordist era would probably have adopted measures and policies that would have mitigated climate change more effectively… [Such a course of action, however, would be] regarded as economically ‘inefficient’ by today’s neoclassical economists.[41]

Carbon emissions have exploded under neoliberalism – and taking account of current trends, as an accumulation regime neoliberalism appears incapable of dealing in any meaningful way with the climate crisis.[42]

This inability need not necessarily create a problem for neoliberal accumulation, however. Indeed, the multiple environmental crises we face present potential opportunities for a new wave of innovation and neoliberal expansion.[43] Examples include carbon markets, payments for ecosystem services (PES) and the commodification of nature, insurance and climate finance mechanisms (for example ‘catastrophe’ bonds), renewable technologies, geoengineering, electric vehicles, green chemistry, and green nanotechnology, to name just a few.[44]

Advocates of market-based solutions to ecological crises are quick to point to the recent expansion of renewable energy capacity as evidence of the unparalleled mobilising force of neoliberal regimes.[45] Indeed, on current trends, such renewable capacity is set to increase markedly in coming decades. Yet due to the inner logic of capitalist production, rather than displacing production based on fossil fuels, new renewable energy capacity is augmenting existing energy supply. Richard York analysed data from across most nations of the world during the period 1960-2009 and found that each unit of total national non-fossil energy displaced less than one-quarter of a unit of fossil energy; regarding electricity in particular, each unit of non-fossil fuel-generated electricity displaced less than one-tenth of a unit of electricity generated from fossil fuel sources. These results, he suggests, ‘challenge conventional thinking in that they indicate that suppressing the use of fossil fuel will require changes other than simply technical ones such as expanding non-fossil-fuel energy production’.[46]

We are brought once again to the environmental problematics rooted in capitalism’s inner logic. Production takes place with the primary aim of capital accumulation. Consequently, new renewable energy capacity is put in service of this goal. And as there exist no real boundaries between ‘green’, ‘grey’ or ‘black’ capitalist sectors, money invested in ‘green’ sectors might produce profits that are later invested in ‘black’ sectors.[47] Profit is the ‘bottom line’; environmental concerns are cast aside.

  • Material resources

Renewable energy systems require large amounts of earth materials. The development of a global renewable energy system and the electrification of transport would require 50%of current copper reserves; regarding platinum, nickel and lithium, the need would be larger than (or a large proportion of) respective existing reserves.[48]

According to Mahnkopf, due to decreasing discovery rates, major minerals – silver, lead, copper, nickel, uranium – at acceptable prices are set to become exhausted between 2030 and 2050. Lower grade ores require relatively more energy for extraction. Also, due to the ecological impacts of mining, mining corporations in many places around the world are facing increasing levels of resistance.[49] Such issues pose problems for the development of a global renewable energy system.

And whether capitalist or not, any future social formation that increases renewable energy capacity to deal with atmospheric carbon emissions will likely amplify other ecological stresses. While the impacts of solar energy production, for example, might be milder than those of fossil energy, in an expanding economy the total amount of energy produced, and the materials extracted, will sooner or later overshadow such differences. Kallis warns that if world energy consumption was to triple by expanding renewable energy capacity, the impact of materials extracted and land used would ‘become a major force of environmental degradation and pollution’.[50] Could a major shift to renewables signal the return of ‘the land constraint’ in 21st century form?

These issues constitute significant obstacles to those who propose to power the ‘green’ capitalist economies of the future entirely by renewable energy sources. For Kallis, this problematic brings forth the issue of ‘de-growth’: although powering the global economy of today entirely by renewable energy is unlikely, it is possible, he suggests, ‘to thus power a much smaller one’.[51]

Continue reading Part 3.

______________

Notes to Part 2

[1] Intergovernmental Panel on Climate Change (IPCC), Climate Change 2014 Synthesis Report (2014); Ian Angus, Facing the Anthropocene: Fossil Capital and the Crisis of the Earth System (New York: Monthly Review Press, 2016); Malm, Fossil Capital.

[2] Elmar Altvater, ‘The Social and Natural Environment of Fossil Capitalism’, Socialist Register, 43 (2007), 37-59; Matthew T. Huber, ‘Energizing historical materialism: fossil fuels, space and the capitalist mode of production’, Geoforum, 40:1 (2008), 105-15; Malm, Fossil Capital.

[3] Ellen Meiskins Wood, The Origin of Capitalism: A Longer View, 2nd edn. (London: Verso, 2017); Huber, ‘Energizing historical materialism’.

[4] Altvater, ‘Social and Natural’, p. 42.

[5] Edward Anthony Wrigley, Energy and the English Industrial Revolution (Cambridge: CUP, 2010).

[6] Wrigley, Energy; Malm, Fossil Capital, pp. 21-2.

[7] Wrigley, Energy.

[8] Huber, ‘Energizing historical materialism’.

[9] Carlo Cipolla, The Economic History of World Population, 7th edn (New York: Harvester Press, 1978), p. 45.

[10] Huber, ‘Energizing historical materialism’; cf. Marx, Capital, vol. 1, ch. 27.

[11] Huber, ‘Energizing historical materialism’, 108-9.

[12] Huber, ‘Energizing historical materialism’, 110. Fossil fuel-powered machine production allowed more and more commodities to be produced, for which new markets – often in other parts of the world – had to be found (Huber, ‘Energizing historical materialism’, 111). Increasingly, demand was also driven by requirement of domestic wage workers whose only way to obtain the necessities of life – now that access to means of substance was denied – was through the sale of their labour power and the exchange of wages for these commodities; see: Wood, Origin of Capitalism.

[13] Malm, Fossil Capital.

[14] This shift had other advantages for capitalist manufacturing, for example, better access to transport links and supplies of raw materials.

[15] Altvater, ‘Social and natural’, 41.

[16] Rikard Warlenius, ‘A renewable Energy Transition: capitalist barriers, socialist entitlements’, in: Eskelinen et al. (eds.) Politics of Eco-socialism, p. 90.

[17] Altvater, ‘Social and natural’, 39; cf. Vaclav Smil, Power Density: A Key to Understanding Energy Sources and Uses (Cambridge: MIT Press, 2015).

[18] Ian Angus, Facing the Anthropocene: Fossil Capital and the Crisis of the Earth System (New York: Monthly Review Press, 2016), p. 56.

[19] Altvater, ‘Social and natural’, 42.

[20] Altvater, ‘Socical and natural’, 45.

[21] Giorgos Kallis, ‘Socialism without growth’, Capitalism Nature Socialism, (2017), 7.

[22] Sachs, Age of Sustainable Development; Arthur P. J. Mol, David A. Sonnenfeld, Gert Spaargaren, (eds.) The Ecological Modernisation Reader: Environmental Reform in Theory and Practice (London and New York: Routledge, 2009).

[23] Not only do fossil energies allow production to take place at sites away from ‘place-bound’ energy sources; thanks to the cheap transport possibilities they afford, commodities produced in such locations can easily be transferred to distant markets. ‘Containerisation’, for example, has played a key role in global commodity flows in recent decades. This is an example of what Marx described as ‘the annihilation of space by time’: Karl Marx, Grundrisse: Foundations of the Critique of Political Economy (Harmonsdworth: Penguin, 1973), p. 524.

[24] Fortune 500: Full List (2017).

[25] Klein, This Changes Everything; Damian Carrington, ‘“Shell knew’” oil giant’s 1991 film warned of climate change danger’, The Guardian (28 February 2017).

[26] Birgit Mahnkopf, ‘Lessons from the EU: why capitalism cannot be rescued from its own contradictions’, in: Dale et al., Green Growth, pp. 145-6.

[27] Vaclav Smil, Energy Transitions: History, Requirements, Prospects (Oxford: Praeger, 2010), pp. 125-6.

[28] United Nations, World Economic and Social Survey (2011), p. 53.

[29] David Harvey, Limits to Capital (London: Verso, 1999), p. 220.

[30] Andreas Malm, ‘Socialism or barbeque, war communism or geoengineering: some thoughts on choices in a time of emergency’, in: Eskelinen et al. (eds.) Politics of Eco-socialism, p. 181.

[31] Warlenius, ‘A renewable energy transition’, p. 87.

[32] Ståle Holgersen, Rikard Warlenius, ‘Destroy what destroys the planet: Steering creative destruction in the dual crisis’, Capital & Class, 40:3 (2016), 512; cf. Klein, Shock Doctrine, p. 316.

[33] e.g. Jeremy Rifkin, The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World (New York: Palgrave Macmillan, 2011).

[34] Warlenius, ‘A renewable energy transition’, p. 91.

[35] George A. Gonzalez, Energy and Empire: The Politics of Nuclear and Solar Power in the United States (Albany: SUNY Press, 2012), p. 8.

[36] Hoffman, ‘Can green growth really work’, p. 35.

[37] Warlenius, ‘A renewable energy transition’, p. 97.

[38] Andreas Malm, ‘The origins of fossil capital: from water to steam in the British cotton industry’, Historical Materialism, 21:1 (2013), 61.

[39] Philip Mirowski, Never Let a Serious Crisis go to Waste: How Neoliberalism Survived the Financial Meltdown (London: Verso, 2013); David Harvey, A Brief History of Neoliberalism (Oxford: OUP, 2005).

[40] Klein, This Changes Everything.

[41] Warlenius, ‘A renewable energy transition’, p. 95.

[42] Malm, Fossil Capital, p. 359.

[43] The Natural Edge Project, Waves of Innovation (2004).

[44] Harvey, Seventeen Contradictions, p. 248; Razmig Keucheyan, Nature is a Battlefield (Cambridge: Polity, 2016).

[45] Howard Johns, Howard Johns: Energy Revolutionary and Solar Entrepreneur (2015).

[46] Richard York, ‘Do alternative energy sources displace fossil fuels?’, Nature Climate Change, 2 (2012), 441-3.

[47] Holgersen, Warlenius, ‘Destroy what destroys the planet’.

[48] Antonio García-Olivares, Jordi Solé, ‘End of growth and the structural instability of capitalism – from capitalism to a symbiotic economy’, Futures, 68 (2015), 31-43.

[49] Birgit Mahnkopf, ‘Lessons from the EU: why capitalism cannot be rescued from its own contradictions’, in: Dale et al., Green Growth, p. 145.

[50] Kallis, ‘Socialism without growth’, 4.

[51] Kallis, ‘Socialism without growth’, 6.

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