The association of slavery with big energy companies and
global warming might not seem to make sense, but there is a context in which it
does. Christopher Hayes discussed the
relationship in his article in The Nation:
The New Abolitionism.
Hayes was particularly intrigued by a calculation reported by Bill Mickibben, the
well-known author and environmental activist.
“….a fairly straightforward bit
of arithmetic that goes as follows. The scientific consensus is that human
civilization cannot survive in any recognizable form a temperature increase
this century more than 2 degrees Celsius (3.6 degrees Fahrenheit). Given that
we’ve already warmed the earth about 0.8 degrees Celsius, that means we have
1.2 degrees left—and some of that warming is already in motion. Given the
relationship between carbon emissions and global average temperatures, that
means we can release about 565 gigatons of carbon into the atmosphere by mid-century.
Total. That’s all we get to emit if we hope to keep inhabiting the planet in a
manner that resembles current conditions.”
The problem becomes obvious when we learn that proven,
worldwide energy reserves are five times the amount that can be consumed within
that temperature constraint. Hayes
concludes that somehow the fossil fuel companies are going to have to be
persuaded or coerced into leaving at least 80% of their wealth buried under
ground. Placing a value on this fuel is
difficult, but he suggests $20 trillion as an estimate.
Hayes then suggests that the only time such an enormous
economic change was required was when the slave economy in the Americas was
dismantled. He estimates that the
economic value of the slaves relinquished in the United States alone would be
equivalent to about $10 trillion in today’s economy. Consequently he concludes that the economic
consequences were similar in scope to eliminating access to fossil fuel
reserves.
Slavery did not end easily in the United States. It took years of a civil war that was easily
the bloodiest conflict the nation has ever participated in. While limiting the access of energy companies
to their claimed wealth in fossil fuels may not lead to violence, Hayes claims
it is no less radical an idea in our time and will likely not be accomplished
without some level of strife.
“….the parallel I want to
highlight is between the opponents of slavery and the opponents of fossil
fuels. Because the abolitionists were ultimately successful, it’s all too easy
to lose sight of just how radical their demand was at the time: that some of
the wealthiest people in the country would have to give up their wealth. That
liquidation of private wealth is the only precedent for what today’s climate
justice movement is rightly demanding: that trillions of dollars of fossil fuel
stay in the ground. It is an audacious demand, and those making it should be clear-eyed
about just what they’re asking. They should also recognize that, like the
abolitionists of yore, their task may be as much instigation and disruption as
it is persuasion. There is no way around conflict with this much money on the
line, no available solution that makes everyone happy. No use trying to
persuade people otherwise.”
Hayes then goes on to question the business model that
the energy companies seem to be following and suggests a path for climate
activists to follow in contending with them.
“Fossil fuel extraction is one
of the most capital-intensive industries in the world. While it is immensely,
unfathomably profitable, it requires ungodly amounts of money to dig and drill
the earth, money to pump and refine and transport the fuel so that it can go
from the fossilized plant matter thousands of feet beneath the earth’s surface
into your Honda. And that constant need for billions of new dollars in
investment capital is the industry’s Achilles’ heel.”
The energy companies must keep their shareholders happy
and they must act in such a way as to maintain the value of company shares and
continue to have access to new capital.
Hayes’s plan is for activists to convince shareholders and other investors
that the energy companies are pursuing a business plan that is doomed to
failure.
“Investors, even those unmotivated by stewardship of the planet, have
reason to be suspicious of the fossil fuel companies. Right now, they are
seeing their investment dollars diverted from paying dividends to doing something
downright insane: searching for new reserves. Globally, the industry spends $1.8
billion a day on exploration. As one longtime energy industry insider pointed
out to me, fossil fuel companies are spending much more on exploring for new
reserves than they are posting in profits.”
“Think about that for a second: to stay below a 2 degree Celsius rise, we
can burn only one-fifth of the total fossil fuel that companies have in their
reserves right now. And yet, fossil fuel companies are spending hundreds of
billions of dollars looking for new reserves—reserves that would be sold and
emitted only in some distant postapocalyptic future in which we’ve already burned
enough fossil fuel to warm the planet past even the most horrific projections.”
“This means that fossil fuel companies are taking their investors’ money
and spending it on this extremely expensive suicide mission. Every single day.
If investors say, ‘Stop it—we want that money back as dividends rather than
being spent on exploration,’ then, according to this industry insider, ‘what
that means is, literally, the oil and gas companies don’t have a viable
business model. If all your investors say that, and all the analysts start
saying that, they can no longer grow as businesses’.”
When Britain
passed a law outlawing slavery in most of its possessions in 1833—and all lands
soon thereafter—it was accomplished peaceably by offering slave owners
financial compensation for their lost slaves.
The former slaves did not go away necessarily. Most remained available as laborers, but
laborers who had to be paid. The businesses
affected could switch business models and resume activities in many cases. There is no similar backup plan for the energy
companies at this point.
There may be more to the energy companies’ business model
than Hayes suspects. It could be that
part of the justification for continuing to search for energy reserves is the
hope for eventual compensation for their inevitable loss.
It could also
mean that big energy believes that human nature is on their side and they will
be allowed to provide pollutants indefinitely into the future. There is little indication of mass movements
to rein in the energy companies. In
fact, there appears to be support being given to those who would experiment
with geoengineering solutions in an
attempt to counter the rising temperatures while eliminating the need to
constrain fossil fuel consumption.
The energy
corporations seem to believe that preserving their stock market valuation must
be their primary objective. The
shareholders would probably agree with that as a strategy because they would
rather have shares that they could sell if they wished and pay taxes at the
capital gains rate rather than have dividends that are taxed at a higher rate
as regular income. The wealth of the
company is judged in terms of current income and possessed assets. If a company were to even hint that it was
getting out of the energy exploration business, the stock price would likely
plummet as shareholders jumped off a sinking ship.
It would seem
that the best way to end fossil fuel extraction is the traditional way—by
making the demand for fossil fuels drop so low that it is no longer a viable
business. The recent fall in the price
of oil is often interpreted as being harmful to alternate energy
solutions. It is not clear that that is
a correct assumption. People and
businesses will not necessarily consume more energy because it is cheaper. That usually makes no sense. There is the possibility that the switch to
renewable energy sources may slow down a bit, but one lesson that should be
learned from the recent price excursions is that fuel prices are very volatile
and that what goes way down can also go way up.
Long-term plans are unlikely to be much changed.
It is
interesting to note that while the price of fuel dropped dramatically, the
level of demand was little changed.
Price changes were based on projections into the future. The way to limit the activities of energy
companies is to create a future projection of demand that will drive prices
lower permanently—so low that future energy extraction becomes uneconomical.
The
technologies are already available to dramatically lower demand for fossil
fuels. Just striving for greater
efficiency in transportation and in heating and cooling homes and businesses
can provide enormous savings. There are
no wondrous breakthroughs required. We
must merely speedup processes that are already underway. One such path to the near elimination of
fossil fuel demand is described here.
Activists’
time would be better spent attacking demand rather than supply.
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