Capitalism without carbon

April 24, 2002
Issue 

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REVIEW BY JIM GREEN

Running from the Storm: The Development of Climate Change Policy in Australia
By Clive Hamilton
UNSW Press, 2001
176 pages, $35 (pb)

Running from the Storm, Clive Hamilton's book on climate change, and in particular climate change policy under federal Labor and Liberal governments in the 1980s and '90s, is essential reading for environmentalists.

No-one is better equipped than Hamilton — an academic and executive director of the left-leaning Australia Institute — to cover this ground. He has followed the debates closely since the 1980s (both as observer and as a combatant), his economic training enables him to cut through corporate and government lies quicker than most, and he is well able to situate greenhouse policy in the context of broader issues such as neo-liberal economic policies. Picture

Throughout the period of the Labor governments of the 1980s and '90s, government policy was marked by procrastination: announcing grand initiatives but not funding or implementing them; commissioning reports but ignoring their recommendations; and relying heavily on voluntary emission reduction programs.

The 1996 transition from Labor to Prime Minister John Howard's Coalition government did not bring any significant change in greenhouse gas emission policies.

In the lead-up to the 1997 Kyoto conference, at which developed countries were expected to agree to binding emission-reduction targets, various myths regarding Australia's "special status" were promulgated by corporate polluters and the Howard government: Australia's heavy dependence on fossil fuels (including energy-intensive exports) makes it more costly to cut emissions here; Australia is much more dependent than other countries on fossil fuels for transport because it is a large, sparsely populated country; and Australia is responsible for just 1.4% of global greenhouse gas emissions so reductions or increases here will have almost no global effect.

Hamilton uses two simple principles to frame his analysis: the "polluters pay" principle, which holds that countries with greater per capita emissions have an obligation to accept more stringent emission reduction targets; and the "ability to pay" principle, which holds that, other things being equal, countries or other entities in a better position to pay the costs of emissions reductions should be required to do so.

Using these principles, wide-ranging empirical data and rigorous analysis, Hamilton destroys the myths about Australia's "special status". For example, he shows that greenhouse gas-intensive industries and exports are not significantly more important in Australia than elsewhere, so there's simply no case for Australia to be given exceptional treatment on that score.

In any case, the existence of such industries does not necessarily make it more difficult to reduce greenhouse gas emissions. The opposite can apply, especially in Australia where historical inaction has meant that there are many low-cost and no-cost measures still awaiting implementation that can reduce greenhouse gas emissions.

The Howard government's efforts to kill the Kyoto Protocol before its birth, and its subsequent efforts to gut the treaty of any substance, are recounted by Hamilton.

Emissions trading

While Running from the Storm is an important, must-read book, and I wish I had more space to sing its praises, it might be more useful to raise some concerns.

Hamilton champions the creation a market in carbon emission certificates within and between countries. He is alert to the potential loopholes, such as the vulnerability of emissions trading systems to a variety of creative accounting scams, but claims that trading systems can be designed without loopholes.

Trading systems generally give greenhouse gas emitters the option of either reducing emissions or buying carbon credits if they fail to meet allocated targets. Why give the option? Why not simply enforce emissions reductions on corporate greenhouse gas polluters (amongst other measures to reduce greenhouse emissions)?

Hamilton's answer is that a trading system "without loopholes offers the best opportunity of achieving sustained reductions in global greenhouse [gas] emissions as it minimises the cost of cutting emissions while maintaining the environment integrity of the [Kyoto] protocol". And by "greatly reducing the costs of greenhouse gas mitigation, it should permit more rapid reduction in global emissions".

Costs for whom? The cheapest methods of earning carbon credits for greenhouse gas polluters can be extremely costly for others. In a briefing published by the British non-government organisation, the Corner House, Larry Lohmann cites the example of Norwegian companies which lease land in Uganda for plantations to (temporarily) soak up carbon being emitted elsewhere — a takeover which threatens the livelihoods of 8000 people (Lohmann's important analysis, Democracy or Carbocracy?, is at <http://www.thecornerhouse.org.uk/briefing/24carboc.html>).

Why trust the market to decide the most effective and equitable ways of reducing greenhouse gas emissions? Theory and practice suggest trust is misplaced. Equity could be built-in at the design stage — for example through the principle that each human has an equal right to the atmosphere. That's a good principle, but in the context of the corporate marketplace, fine principles are easily bastardised and remoulded to suit corporate interests (witness the new-look Kyoto "Lite" Protocol). The equal rights principle can be applied without being tied to an emissions trading system, although Hamilton asserts otherwise.

Market-based instruments such as emissions trading systems, whether effective within their own narrow parameters or not, reinforce the primacy of markets and corporate power. They often close-off other options (hence their relative popularity among corporate polluters and neo-liberal governments) such as mandating reforms in polluting industries, nationalising polluting industries, public sector initiatives and investments and so on.

Private-sector dominance appears to be a fait accompli for Hamilton; he asserted on ABC Radio National's Earthbeat on April 6 that renewable energy projects "are going to be done for the most part by private companies" without explaining why corporate dominance is a constant around which everything must revolve (see <http://www.abc.net.au/rn/science/earth/stories/s525709.htm>).

Unreliable allies

Hamilton applauds the corporations that have swung behind the Kyoto Protocol, mostly renewable energy industries and speculators gearing up to make a killing on emissions trading. These are, at best, unreliable allies whose primary interest is profit, not environmental sustainability or social equity.

Enron is a case in point: its social and environmental credentials were appalling, but it favoured US ratification of the Kyoto Protocol because of its extensive interests in gas.

If Hamilton is, at times, too kind to big corporations, he couldn't be accused of romanticising the environment movement. On the contrary, he launched into a broadside against environmentalists in an article published in the Melbourne Age on January 21 (and in the March 2002 edition of Australasian Science).

He alleged that environmentalists are responsible for "a pattern of knee-jerk resistance to a range of renewable energy proposals across the country". Examples of knee-jerk resistance can be demonstrated, but I'm not sure there's evidence of a pattern. Fossil fuel industries and neo-liberal governments pose vastly greater obstacles to renewable energy growth than do environmentalists.

Environmentalists and many others will have to come to terms with various adverse impacts from renewable energy sources, but that doesn't mean uncritical acceptance of any and every renewable energy project (a generalisation with which Hamilton would agree).

The wind power station near Albany in Western Australia is a case in point. It is now widely accepted by the local community, but only after they were able to exert sufficient pressure to force the developer, Western Power, to make numerous modifications to the project such as burying transmission lines.

Overall, Running from the Storm reads as a manifesto for capitalism without carbon. Hamilton could well be right that climate change is the single most important global environmental issue. But I'm not convinced that corporations and markets can solve the problems that corporations and markets created.

And even if stripped of carbon, even with climate change brought under control, capitalism will remain both environmentally unsustainable and inhumane.

From Green Left Weekly, April 24, 2002.
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