Time to end the market farce of energy transition: we need a pro-public democratically controlled energy system.

Time to end the market farce of energy transition: we need a pro-public democratically controlled energy system.

In 2019, climate change hit the headlines across the world due to increasing severity of its impacts and the rising protests on the streets for our national governments to take action.  This followed a stark analysis by the UN intergovernmental Panel on Climate Change report in 2018 that popularised the message we have until 2030 – or now just ten years – to stabilise global temperature to stay within the 1.5 degrees target of the Paris Agreement.

Transformation of the energy sector and our fossil fuel based economies, as the biggest contributor to greenhouse gas emissions, is at the heart of the action we need to take.  But whilst renewable energy is a growing part of the global energy mix, we are not seeing the parallel decrease in fossil fuels. On the contrary. Analysis by the global Trade Unions for Energy Democracy initiative shows[1] growth in fossil fuel energy is rising and outpacing the increase in renewables generation.

Meanwhile another round of climate talks in Chile-Madrid have again ended in failure to reach agreement on the steps needed to halt the impending climate catastrophe. This time they floundered on the operation of global carbon markets as part of finalising the ‘rule book’ ahead of the Glasgow/COP 26 where nationally determined contributions (NDCs) will be reviewed.  A big carbon emissions trick that helps countries which aren’t cutting their carbon emissions quickly enough to buy carbon credits from other countries. A get clause that basically enables the biggest polluting countries and corporations to carry on with business as usual but with a bit of green ‘flare’ to the message.

Often described in terms of ‘lack of ambition’, this is in reality a lack of political intent. Those governments compliant to the 2015 Paris Climate Agreement (and the US now seeking to withdraw) have no intention to limit the carbon profit margins of election funding corporations. And along with it growing global inequality between the haves and have nots, the energy rich and energy poor, the frontline communities namely in the global south most impacted by climate change versus maintaining the way of life of the rich global north.

But why is there such a contradiction between the reality of terrifying wild fires and drought/flood induced starvation and displacement of peoples, and doing what we need to be doing to slow global heating?  The answer lies in the rapacious pursuit of neo-liberal capitalism of the proverbial 1%, and hence why our political and social responses to energy transformation resides in taking on the corporate capture of energy and the structures of power that maintains their position. In short, energy democracy.

Energy democracy is fundamental to energy transition

A focus on switching from fossil fuels to renewable energy is essential but not enough to make the transformations in the time and scale required.  We need to address climate change as a toxic by product of capitalism, unfettered growth and its related greenhouse gas emissions, and the concentration of ownership of public goods in private hands within a context of liberalised energy markets.

We also need to tackle it as a political, social and economic process that confronts the inherent inequality and imbalance of power in our societies globally. Therefore, challenging the conventional market based solutions of climate agreements, and seeking action based on ecological and socially productive needs.

The global Trade Unions for Energy Democracy initiative provides a labour movement response to this which sees the energy transition to a zero carbon economy based on public ownership and democratic control of our energy system. Its founding principles set out the need to reclaim, resist, and restructure our entire energy system, and end its corporate ownership and control.  It also embeds within it economic, social and environmental justice issues such as energy and fuel poverty, a Just Transition for workers and communities across all sectors of the economy, and provides an opportunity to re-vision our public services providing energy as a public good, rather than a commodity to be traded for the favourable profit margins of a global corporate elite. 

Energy democracy is not just an idea whose time has come, its pro-public framing is fundamental to ensuring we achieve the energy transition and in a way that enshrines climate justice.  The liberalisation of energy, exemplified by the UK complete privatisation of its energy system, is failing on decarbonisation and price.  Whilst the European Union has claimed liberalisation is part of the success in deploying renewables, the reality is that this has been predicated on ‘out of market’ mechanisms such as feed-in-tariffs and as such subsidised by public money.  Once removed, as is happening across Europe, investment drastically drops off and along with it the deployment rate of renewables. Arguments which are set out in the recent EPSU report: Going Public: The failure of energy liberalisation.[2] 

One challenge therefore is to reverse these privatisations and an ideological approach that says markets will deliver the energy transition. But we also have to guard against new privatised renewables sector growing up where there is currently state ownership of fossil fuels. For example, the proposed ‘unbundling’ of the South African state owned energy utility, Eskom, which is responsible for the nations ‘coal power plants and being heralded as a route to increase the renewables sector via Independent Power Producers (IPPs).[3]  

We also have to be clear on what we mean by energy democracy. Community energy and cooperatives are posited as an example of regaining democratic control. With some success in Germany and Denmark there are certainly models to learn from. However as noted above, this has often been dependent on feed-in-tariffs.  Some environmental NGO’s such as friends of the Earth Europe believe that this will pave the way for a faster and fairer energy transformation addressing social aspects of energy alongside.[4] As such they have celebrated the new community and individual rights conferred by the EU on member state to generate, store, consume and sell their own energy.

In energy transition, size matters. Many community energy projects are small scale, and dependent on people with capital and/or personal resource wealth such as time to make them happen. Therefore whilst there is an important place for different models of energy generation, to address the scale needed including to run our public services of schools, hospitals and transport, we have to think in gigawatts terms of energy needed not creating new classes of energy ownership and accessibility.  The community energy driver also unfortunately accepts market liberalisation but with community actors as part of a ‘third way’ between public and private.

Energy has to be understood as a system, what it is needed for, which shifts the focus solely on energy supply. Demand reduction is also critical in the energy transformation and can help to allay concerns over intermittency of renewables, along with greater development of storage capacity.  There is too much emphasis at the moment that the decarbonised economy will look the same as the fossil fuel one particularly in industrialised nations. This recreates an industrial development model that fails to promote self-determined development pathways of the global south, and which unfortunately dominates the Just Transition for workers and communities which will be returned to below.  

The notion that every private combustion engine car will be replaced with an electric one adding more pressure to demand has to be challenged.  Initiatives led by the International Transport Workers Federation (ITF) for mass public transit which looks at transport as a mobility service for people rather than a commodity for profit are again vital in the overall energy transformation picture.  As they argue, energy and transport democracy go hand in hand as a way to ensure that “the decarbonisation of both sectors can proceed unhindered in a planned and coordinated way…”[5]

Breaking free of market failure in the UK

The term ‘market failure’ is often used to describe the lack of action on climate change, and much quoted from the Stern report of 2006.[6]  It is often linked in the same turn with references to lack of political will and ambition but the reality is that climate change is a political and social failure.  Our politicians don’t lack political will, they lack political desire to change the system given their ideological attachment to free-markets.  It’s also a social failure. Liberalised energy systems are dominated by high prices and high rates of fuel poverty, including energy poverty in large parts of the world whereby more than a million people globally are said to lack access to electricity.[7] Thereby not just a question of affordability of energy as blights most of Europe[8] and particularly rich industrialised nations such as the UK.

Energy provided as a public good would overcome this through nationwide programmes of energy transition that link up issues around housing, transport and general domestic energy needs. Public ownership is also extremely popular.   Whilst there was a dramatic defeat for the UK Labour Party at the December 12 elections, conversely this was not a defeat for the ideas around energy transformation. Polling has consistently shown high levels of support from even right-wing analysis for energy public ownership:

We find that on almost every issue, the public tends to favour non-free market ideals rather than those of the free market. Instead of an unregulated economy, the public favours regulation. Instead of companies striving for profit above all else, they want businesses to make less profit and be more socially responsible. Instead of privatised water, electricity, gas and railway sectors, they want public ownership. Legatum Institute 2017[9]

For many of us working in this space in the UK, we have come a long way in a few short years from winning the arguments on the political left. From initial discussions in convincing of the need to own the transmission system as the communications system of the energy revolution, there is an emerging pro-public narrative and greater engagement in understanding what democratic control of energy means. In the face of justified criticism of the previous UK energy nationalisation seen as driven by central Government or Whitehall (the area in London where central government departments have traditionally been located), this new thinking was premised on workers and energy users being part of publicly owned energy companies.

The UK Labour Party’s proposals have been greatly developed from their early encouraging pronouncements in the 2017 manifesto.  In 2019 they had developed this into a coherent programme that was not just about a private versus public ownership model – public ownership no more guarantees affordable, clean energy than the private sector. Rather it was about meeting climate change targets, addressing social issues such as fuel poverty, with energy transformation at the heart of a new Green Industrial Revolution.[10]

These plans were not perfect and if Labour had won the elections, we’d be critical of them today.  For example they did not extend to a full reclaiming of the generation side of the energy system, they advocated for local energy communities, and failed to answer some of the questions of market mechanism about Independent Power Purchase Agreements, or capacity markets.  However it was the first real attempt to break free of the failed market logic and take on the challenge of meeting ambitious decarbonisation targets premised on a pro-public goods approach.

A pro public Green New Deal

Energy is not just about decarbonisation but has a much more powerful role.  It is a glue that binds us nationally and globally. It defines our social relations through which we play out the inequalities of justice as “people and places unevenly experience the costs and benefit of energy extraction, generation, financing, distribution and consumption.”[11] This is key to understanding why fixing our energy system, will also help fix inequality and fix our climate. What makes or doesn’t make this happen however lies in resolving issues of ownership and control. Factors that market driven policies are indifferent to.

If 2019 is characterised by an uprising on the streets for action on climate change, it should also be seen as one in which the solutions are increasingly being seen to lay within a Green New Deal to tackle climate change and inequality as one and the same.  The idea for this is not necessarily new and in the UK has resonance as a response to the 2008 financial crisis as part of a ‘triple crunch’ facing the global economy along with accelerating climate change and rising energy prices.[12]

The idea however became popularised from the US as a plan introduced into the Senate by the young congresswomen Alexander Ocasio Sanchez “to battle economic and racial injustice while also fighting climate change.”[13] This has been taken up in the UK with groups campaigning to make this Labour Party policy (adopted at their September 2019 conference[14]) and school student groups who are part of the non-political Green New Deal UK.[15] There is also a Green New Deal for Europe founded by the Democracy in Europe Movement (DIEM).[16]

Whilst these have all included laudable aims including the creation of millions of jobs for workers, they have not necessarily emphasised a strong pro-public narrative. Bernie Sanders has at least attempted to go further on this in releasing his vision for a green new deal by stating that “renewable energy generated by the Green New Deal will be publicly owned”[17] but we need to ensure this is core in the emerging narrative.

Not least because the pro-public approach is also key to the Just Transition for workers.  Whilst posited as a social safety net policy for workers transitioning out of the fossil fuel energy sector, this narrow focus misses the opportunities across the whole economy.  As emphasised throughout, energy transformation is not just predicated on the fuel input – fossil fuels or renewables – but a transformative transition that is rooted in climate justice globally.  Therefore we have to guard against making a new global north versus south divide and work collectively, internationally, for an energy transformation that is part of a pro public Green New Deal on working class terms.

As we have been captured by the corporations in the energy transformation, so we have in the Just Transition debate.  As spelt out by Zwelinzima Vavi, General Secretary of the South Africa Federation of Trade Unions, unless we link this to a pro-public narrative then there will be no Just Transition, or energy transformation on the terms of workers and communities.[18]

In 2020, the climate talks move to Glasgow for COP 26 and what will be the most significant since the Paris agreement was reached in 2015.  This will be an important energy democracy moment for our movement in the UK.  We are currently facing five years of a hard right Conservative Government firmly wedded to the failed market logic of energy transformation.

But we will continue to build our power on the streets and within our workplaces to win these arguments.  If there is one lesson we can take from a dismal UK election result, it is that our fight for energy transformation has to be part of global political transformation against neo-liberal far right regimes if we are ever to realise a just and transformative energy transition.

The text was originally published in polish quarterly magazine "Nasze Argumenty", Nr 02/2019, ISSN 2658-0209 published by Fundacja Naprzód.