Saturday, December 15, 2007

Gaia Capitalism in Bali

Guest post by Gareth Dale:

The "fervent hope" of the Financial Times
The Bali conference is ongoing. But Bali documents are being churned out thick and fast. One such is the Bali Communiqué, prepared by The Prince of Wales’s UK and EU Corporate Leaders Groups on Climate Change, and signed by the leaders of 150 global companies, including Shell, Virgin, British Airways, BAA, Pacific Gas and Electric, Anglo-American, Ferrovial, Rolls Royce, Volkswagen and News Corporation. The Communiqué – which was sent to the 130 Environment Ministers who are attending the Bali conference, and was handed personally to the UN Secretary General Ban Ki-Moon -- calls upon the negotiators to produce a “comprehensive, legally binding United Nations framework to tackle climate change.” In an article published in the Financial Times, The Prince of Wales congratulates the companies for showing “remarkable leadership” and expresses his “fervent hope” that the communiqué “will strengthen the resolve of those gathered in Bali to make the tough decisions the world so urgently needs”. Most significantly, the Communiqué argues that “the overall targets for emissions reduction must be guided primarily by science”. Its website boasts that “This is in contrast to the argument that has previously been made by some parts of the business community that it is concerns over competitiveness and cost that should set the limit of emission cuts.” One signatory, James Smith, Chair of Shell UK, gave voice to the sense of urgency, commenting: "The message from the international business community couldn't be clearer. A comprehensive, legally-binding United Nations agreement to tackle climate change will provide business with the certainty it needs to scale up global investment in low carbon technologies. The cost of inaction far out weighs the cost of taking action now. It is crucial that, at the Bali conference, countries agree a work plan of comprehensive negotiations to ensure a robust policy framework is in place, to guide us forward over the coming decades."

How encouraging that global business leaders have come to see that targets for emissions reduction should be guided by science. With this in mind they may care to consult another Bali document, the Bali Declaration. Prepared under the auspices of the Climate Change Research Centre at the University of New South Wales, it has been signed by some 150 scientists. What targets do the scientists identify? The first is that global warming must be kept “to no more than 2 ºC above the pre-industrial temperature,” that this “requires that global greenhouse gas emissions need to be reduced by at least 50% below their 1990 levels by the year 2050,” and that, in the long run,”greenhouse gas concentrations need to be stabilised at a level well below 450 ppm (parts per million; measured in CO²-equivalent concentration).” In order to meet those targets, the Bali Declaration concludes, “global emissions must peak and decline in the next 10 to 15 years, so there is no time to lose.”

No Money in Solar
How encouraging, too, that the Chair of Shell singles out the need to scale up investment in low carbon technologies. Together with BP, Shell accounts for an astounding 40 per cent of the CO2 emissions of all FTSE100 companies. Mercifully, in recent years it has been investing an average of $200m per year in renewables – admittedly, that represents just one per cent of total capital investment -- in contrast to the 69 per cent it devotes to scouring the planet for new sources of fossil fuels – but a step in the right direction nonetheless. So it is with disbelief that we learn, from The Guardian’s Terry Macalister, that Shell “has quietly sold off most of its solar business.” This is poor timing; the news will hardly make the 130 Environment Ministers and Ban Ki-Moon believe that the signatories of the Communiqué they have just received mean business, so to speak. Shell’s move, writes Macalister, together with BP’s recent decision to invest in Canadian tar sands – as Shell has been doing for years, “indicates that Big Oil might be giving up its flirtation with renewables and going back to its roots.” Shell has pulled out of its solar energy operations in India and Sri Lanka, a sell-off that follows the hiving off of its solar module production business, and which is to be followed by sell-offs in the Philippines and Indonesia. Confirming its pull-out from solar, the Anglo-Dutch oil group said it was not making enough money. "It was not bringing in any profit for us there so we transferred it to another operator.” The pull-out, the same Guardian article continues, has annoyed business leaders with interests in solar energy, who fear the impact of a high-profile company selling off solar business. Jeremy Leggett, chief executive of Solar Century and a leading voice in renewable energy circles, said Shell was undermining the credibility of the business world in its fight against global warming: “Shell and Solar Century were among the 150 companies that recently signed up to the Bali Communiqué. It is vital that companies act consistently with the rhetoric in such declarations, and as I have told Shell senior management on several occasions, an all-out assault on the Canadian tar sands and extracting oil from coal is completely inconsistent with climate protection."

Green Revolution in the Blue-Chips
The Virgin Tycoon was given personal tuition on the matter of climate change by none other than Al Gore, the former Vice President of the United States and one-time shareholder in Occidental. Branson has reported: "Looking directly at me, he said, 'Richard, you and Virgin are icons of originality and innovation. You can help to lead the way in dealing with climate change. It has to be done from the top down, instead of from the bottom up on a grassroots level.'" Branson's proposed solution is technology rather than social or economic change. To lead the way toward what he has called "Gaia Capitalism", he offered a $25 million reward to anyone who devised a device capable of absorbing and storing CO2 (there are billions of such devices already on the planet, even if the supply is diminishing, which is why one of the proposed solutions is a "synthetic tree"). No one has as yet been considered for the prize for proposing any alteration to Branson's airline business. Soon, Virgin was joined by Barclaycard, BSkyB, even the CBI. Green capitalism was quick to spread - even Exxon reportedly found itself on the end of a drive by investors worth $700bn to oust a particular executive blamed for its aggressive policies. A profusion of institutions now seeks capital-friendly solutions to climate change, based on technology. However, whatever technological solutions make it to production will use an enormous amount of energy in their production, which alone may make them unviable according to MIT engineer Howard Herzog. The chances of a suitable technology being developed is minimal.

"Extraordinary Scenes"
An 'u-turn' by the United States, apparently based on the watering down of already inadequate targets, has produced "extraordinary scenes" of high emotion at the Bali conference. Little is to change, in fact. One concrete proposal accepted is for a more entrenched global carbon market, which tripled in value last year to reach $30bn. The proposals are backed by pro-market groups such as the Global Canopy Programme, as well as by oil and gas corporations. According to Gordon Brown, it is "the best way to protect the endangered environment while spurring economic growth". The market is a "business bonanza", potentially overtaking oil in the future. Though riddled with extortion and dodgy accounting, while fuelling new forms of exploitation of the Third World, the market has proven a complete failure in reducing pollution. The ideal capitalist solution - turning disaster into profit - has proved to be no solution at all. Allowing for a massive regressive transformation in global property rights (vast oil companies get to own the right to engage in polluting activity while depriving poorer countries of those rights), it does nothing to stymy the disaster. So, while reactionaries and paid-off commentators continue to deny the science behind 'climate change', far-sighted capitalists seek to adapt to and coopt the movements for change.