In the final few days before COP26 starts, there’s been a rush of policies and pronouncements from governments setting out how they aim to ‘close the gap’ between current carbon emissions and reaching net zero emissions by 2050.
For the most part, campaigners and journalists alike have focused on pointing out how big this gap is. Even if new commitments and pledges are fulfilled, only around 40% of the necessary cuts will likely take place by the 2050 deadline. This gap is the target of protests such as Insulate Britain’s recent roadblocks, alongside endless reports and online campaigns.
Throughout the COP we’ll no doubt see more of the same. Calls for better pledges or tighter deadlines. Calls for more money. Calls for clearer plans, and for ‘taking action’.
But this battle has been won. Governments and business are acting. What’s more, the continued focus on pressuring governments to act is misplaced. While campaigners will be focused on trying to close the gap at this COP, business has already stepped in to fill it.
To be sure, governments aren’t acting as quickly or decisively as they should – but we shouldn’t mistake the remaining emissions gap as evidence the transition to a different, ‘green’ global economy isn’t underway. What we’re seeing take shape is a green new deal for business, where government investment in sustainable innovation and infrastructure props up stagnant economies. And unless we succeed in refocusing what the transition looks like, we’ll have no say in the shape of the world for years to come.
Over the past several years, ‘net zero’ has come to dominate the political landscape. And while it is decried as a farce, as a way for polluting industries and recalcitrant governments to avoid taking action, what has actually happened is that net zero has become a business plan.
There are two key elements to this plan. The first is to aggressively campaign for state financial backing for green industries, looking to take up state funding in order to secure low carbon forms of steel, nuclear power, aviation and other high-value forms of production. Governments want to avoid the kinds of dramatic disruption foreshadowed by the pandemic; they want a transition that changes as little of the existing economy as possible. Innovation offers to make the economy we have sustainable and, at the same time, drive economic activity in a period of global economic stagnation.
What this means in practice is a greening of neoliberalism’s habit of public funding for private companies. The UK government has set aside £500m to bribe car companies in an effort to ensure they continue to produce cars in the UK, £30m of which is going to Ford to make sure they don’t close their Merseyside plant. In a much publicised ‘win’ for the UK government, Nissan agreed to invest £1bn in Sunderland to expand their existing car operation to build electric batteries. It only cost the UK £100m – and the local council another £80m – to upgrade the grid for them, while (maybe) creating upwards of 1,200 direct jobs, with possibly thousands more in the supply chain. It’s unclear how many of these new jobs are jobs not lost, just ‘saved’, or already exist and are being double counted. Or how many of the 1,500 people Nissan made redundant from 2015 onwards will be eligible for them. Perhaps some of the people being made redundant by Honda – 3,000 directly, with another 6,000 in the supply chain – will be able to apply.
This story is repeated across the economy. The electric vehicle industry will be funded to the tune of £1.6bn; ‘sustainable’ aviation fuel gets £180m; heat pumps and retrofitting gets £3.9bn; carbon capture and storage gets at least £140m (but there’s also a £1bn innovation fund projects can access); £120m for nuclear power, the heart of the UK government’s green energy transition and a notorious white elephant; and the list goes on, totalling, according to the government, £26bn for the ‘green industrial revolution’. The aim is to make the UK an ‘attractive’ investment opportunity, doubly difficult post-Brexit.
There is no way to reach zero carbon emissions without investment, certainly. But we should be asking whether public money should be used for generating profits and future revenue for big business when other public and community options exist. As it stands, what we’re looking at is a massive transfer of wealth from the public to private capital, standing to make huge profits off a crisis caused by their factories, oil wells, planes and trucks.
But as we know, even if green steel, aviation’s ‘jet zero’, and sustainable fast fashion all come to pass – and that’s a big if – there will still be an emissions gap in the order of at least 20% of the necessary emission cuts. There is only so much that can be done with existing industries to reduce their emissions. Rather than propose to reduce these activities, to ‘degrow’ polluting sectors, the plan is to financialise the gap.
There are two main ways the gap will be financialised. The first is to generate state-support for innovations that claim they can close the gap. From carbon capture and storage (CCS) to reforestation (the latter receiving £625m), there will be huge profits to be made, even if the technologies never quite make it to full implementation. The government just announced two CCS schemes that will receive funding, drawn from the £1bn innovation fund, to be built in the north, with more proposed. And we’re already seeing carbon offsets playing a key role in the continuation of fossil fuel production, with Shell selling ‘carbon neutral gas’, and Sinopec shipping ‘carbon neutral oil’.
The second way is through the creation of new financial instruments, focused on trading and offsets, while seeking to offload insurance costs for at-risk households. We can see this in the creation of carbon neutral fossil fuels, but also in every current business’ net-zero plan, as well as in the emphasis on the creation of carbon markets.
While this is not likely to close the gap, it will make the gap profitable. And there are other industries that are likely to thrive in it too, from border protection and security industries, to those that offer private solutions to climatic disasters.
All of this is looking very much like a neoliberal revamp of state capitalism – the 1960s on Wolf of Wall Street steroids. Yet, as throughout the 90s and 00s, what we are seeing is state expenditure not as an effort of state-led development, but as a kind of desperate competition for corporate attention. We’re entering the era of a neoliberalised state-capitalism, where states just provide investment opportunities for corporate monopolies to cash in on, while we wait for late trains in flooded houses to go to our shitty jobs where things are going slow because the supply chain has broken down. Again.
The UK’s green business plan won’t be all smooth sailing, though. Wealthy countries are mobilising huge sums to attract green business investment. While the UK government aims to spend £500m funding car manufacturers, the EU has assembled a €2.9bn war chest to bid for investment. In fact, most wealthy countries have investment funds that dwarf the UK’s, and given the world is already awash with excess industrial capacity, competition will be fierce. Protectionism may boost some national investment, as it will become cheaper to produce locally than pay import tariffs, but it’s more likely the overall effect will be to depress economic activity, not increase it.
While we can expect some union complicity in the government’s plan, recent and upcoming industrial action – from car workers to university lecturers, from bin and refuse workers to offshore oil platform workers – signals that disruption is always a possibility. Far from an investor’s paradise, post-Brexit Britain could end up engulfed in political and economic struggle. Some of which, like the current situation with HGV drivers and farm workers, will drive up wages and improve conditions, reducing profit margins further.
Finally, while the gap is being financialised, it’s not being closed. Climate change itself will undermine the future profitability of big business in the UK. Whether it’s through climatic disasters and flooding, new pandemics, or disruptions to supply chains and access to crucial resources, a 2-3°C degree world will be one racked by crises and shortages.
To continue focusing on the emissions gap will mean we miss the bigger picture. The transition is underway, and at the moment it is shaping up to be a nightmare: a nuclear-powered kind of monopoly capitalism, where global platform giants control the core of the global economy, while the rest of us scrap for work and the best jobs are to be found patrolling the razor wire around the border.
There are better futures, ones that turn out differently for all of us. We need to shift our attention to the kinds of jobs and industries we want to see take us through to a low carbon future, however, and not be content with chasing big business. The future doesn’t have to be privatised. We are on the verge of the biggest transformation of the global economy in generations – we should take the opportunity to radically rebuild it.