Big-name mainstream economists like Nick Stern and Joseph Stiglitz have championed a “green recovery” from the current economic slump as good for “the economy” as well as “the environment”. Many politicians have said similar.
Yet the vast majority of the huge rescue packages to prop up industries and companies are being poured into the fossil fuel economy, without environmental conditions attached.
The Guardian (6 June) estimates that $509bn (£395bn), more than half a trillion dollars, worldwide, will go into high-carbon industries with “no conditions to ensure they reduce their carbon output”, but only $12.3bn to renewable energy and other low-carbon industries, and $18.5bn to high-carbon industries conditional on environmental targets.
These plans are even less green than economic stimuli following the 2008 financial crisis. The European Central Bank might channel up to €220bn to fossil fuel companies which intend to expand production.
Of 53 companies revealed on 4 June to receive payouts from the Bank of England’s “Covid Corporate Financing Facility”, several were airline companies, yet more were coachline companies, car manufacturers and oilfield service companies — to the tune of billions of pounds to date. The Bank’s CCFF is current set to support lending up to £66.6 billion.
“Green strings” attached to such loans to private companies are insufficient, but with CFFF, no such strings exist.
The UK-government-led global “Race to Zero” campaign is window-dressing. Launching on 12 June, it will ask businesses, cities, and universities to sign up to targets of net zero by 2050. The Paris/UNFCCC framework, within which this sits, is completely insufficient.
Today, low-carbon energy sources remain considerably less profitable than the fossil fuels industry.
The Covid-19 emergency has seen a rapid downturn in use of energy and fuels, including, and in many places disproportionately, fossil fuels. But their continued use remains built into global economies and infrastructures.
Transition will require abandoning and liquidating immense infrastructure projects and assets around the world. This will not happen easily, or without a fight.
The figures about “rescue packages” as lockdowns ease show there is no easy transition by way of market pressures in a neoliberal world.
Compared to current renewable energy infrastructure, the contemporary fossil energy infrastructure is in some ways more flexible. A fossil-fuel power station can easily be run well under capacity for a time, saving fuel, then ramped up again, while nothing is saved from wind or solar farm costs by a period of lower output.
Fossil energy production may bounce back with a vengeance. Fuel prices have been pushed down by temporarily reduced demand. Oil prices turned negative as in many places it was cheaper to pay for the crude to be taken (and stockpiled), than to stop pumping temporarily.
Transition of aviation and automobile industries is possible and desirable. But it will require more “interference” with the market, greater public investment, more disruption to existing companies, than restarting destructive industries with cheap fossil fuel.
Nothing about the coming months and years is, however, inevitable. The trade union and labour movement must organise and fight to demand green jobs for all, a worker-led environmental transition and recovery.