If we really want to reduce carbon emissions and avert an energy crisis, Peter Judge thinks it’s time to move beyond fixed political positions
Questioning capitalism can be a dangerous thing. Business secretary Vince Cable is in trouble this week for apparently casting doubts about the market. But last week, a sustainable business conference heard that it could be time to reinvent capitalism, to protect the planet.
Cable was talking about the “murky” business practices of the city, but last week’s IBM Start Summit was addressing the world crises of energy and global warming… and the extent to which we need something more than capitalism here.
During IBM’s nine-day summit, there were plenty of ideas on how organisations can use technology to reduce environmental impact. IBM suggested analytics can do a lot, while other business leaders chipped in with thoughts on smart grids, and more efficient transport.
But the technology was not the whole story. This was an open-ended event, with an agenda that was more about asking questions than imposing answers (and ironically enough, this led to it being less than open in another sense – many of the sessions were not on the record, to give the participants the freedom to think out loud).
Failing to curb carbon
For the final wrap-up, the Summit fielded veteran campaigner Jonathon Porritt, who described the world’s failure.
After agreeing to prevent “dangerous climate change” at the Rio Summit in 1992, the nations have yet to agree how to stop it.
There is pretty wide verbal support for the idea of carbon pricing as a means to modify business behaviour. Companies have to buy a permit to pollute. This puts up the cost of burning fossil fuel, and that should mean we all burn less fossil fuel. But in practice, it’s not happening.
There are a handful of schemes in the world, the largest being the EU’s Emissions Trading Scheme (ETS), which applies to utilities, a system which Porritt said is “dysfunctional”. It “has not changed behaviour,” he said, and is better known for the various kinds of fraud and corruption that has gone on within it. ETS applies to electricity generators, while the UK’s CRC scheme which applies to large energy users is about to properly start. It seems that many companies will fail to register, and others are not prepared for the act’s requirements.
If you set these half-hearted efforts against the $850 billion that still goes in tax subsidies to the hydrocarbon industries, it is “truly disgraceful”, said Porritt, calling it a “moral failing of unbelievable proportions”.
And there you have the problem. There’s a strong tradition that business does not deal in morals. The invisible hand of the market, and the laws of supply and demand, are supposed to make things work out for the best. But that is not happening here.
It’s time to “reinvent capitalism,” said Ian Cheshire, head of Kingfisher group, the company behind DIY firm B&Q. Carbon credits are trying to fix the input values to the system so capitalism can produce a result that is of benefit to the world. In a sense that’s reinventing capitalism – or at least tinkering with it.
But it’s also not remotely new. As Vince Cable said this week, “markets are often irrational or rigged,”, and it takes intervention to clean that up. The carbon credit concept is no more artificial than the network of pro-polluter subsidies which Porritt described, nor the systems of bankers’ bonuses which drive irrational behaviour in the money markets.
But what happens if carbon markets don’t work? Campaigners like Porritt say that carbon trading schemes need to get tougher in order to change behaviour. The UK government seems to buy into that idea, with energy secretary Chris Huhne promising a high price for carbon to drive business change. But others can’t stomach the idea of allowing companies to buy credits that allow them to pollute. They dismiss the idea of carbon trading as a “scam”.
When Huhne’s Energy Deal puts prices up, it will be branded as socialism. The cost of carbon credits will be called a “tax” – a word which, along with the idea of collectively funding things, goes against the grain of the people who form the real power in the UK government.
But, let’s not pretend. When governments make prices go up, it’s a tax. And when governments impose collective actions to remind us that the planet actually belongs to all of us, it’s not far off socialism. We are talking about collective ownership – or stewardship – of the world.
The fundamental fact of collective responsibility may well be behind the fanatical outbursts which greeted the so-called Climategate affair.
The far right suddenly knew that climate change was a threat to libertarianism. For some, the only way to fight back was to attempt to destroy climate science, to become experts overnight and hype up small holes in evidence they scarecely understood.
It all got very personal – and I think that’s because some people actually interpret any call to collective action as a personal threat to themselves.
So at the Summit, we had a call to reinventing capitalism – but it might just as easily have been an urge to rebrand socialism.
Both systems are ideals that are never completely embodied in the world. So what we have is neither one thing nor the other. And the answer won’t come from one system or the other – it comes from our human commitments to effective change, and our ability to re-examine all the possible ways to achieve it.