Roman Șarov

Introduction

Public ownership and democratic control represent key concepts and fundamental rights that were taken away from consumers, as over the course of the last decades the energy sector in the United Kingdom continuous to be highly privatized and monopolized by the Big Six energy companies.³ A recent YouGov⁴ poll highlights that 68% of the population considers, that energy companies should activate exclusively in the public sector, this outcome exemplifies the need to re-municipalise the energy system as part of a worker-public partnership. The following analysis has at its core of examination three main factors: the Status Quo of global energy systems, public ownership, and energy democracy exemplified through the case study of the United Kingdom.

To begin with, should two opposing arguments be further explored. On the one hand, from a top-down perspective, can six positive trends that provide an empirical basis for a global rethink on the energy production and consumption be identified: (1) falling coal consumption- 9.7% in China (2016) and 13% in the USA (2015). (2) Falling investment levels in fossil fuels- worldwide investment in the development of oil and gas resources from 2015 to 2020 will be $740 billion lower than anticipated. (3) The sharp rise in both renewable energy investment and deployment- global investments during 2015 in solar and wind power combined ($270 billion) was more than double that invested in fossil fuel generation capacity ($130 billion). (4) Improving energy intensity- the average amount of energy needed to produce a unit of GDP. (5) Slowing energy demand- the overall rate of growth in global demand for energy has been slowing. (6) The leveling-off global CO2 emissions- the rise in renewable energy and improving energy efficiency.¹

On the other hand, are the identified sources of economy-based optimism not adequate, as in fact the world is not moving away from Fossil Fuels and much of the recent “we are winning” optimism is misplaced, misleading, and disarming. Although there are changes taking place within the overall energy economy, what is happening cannot be considered as a full-force transition to a renewables-based energy system. Moreover, are the existing movements not seriously challenging the dominance of fossil-fuel-based power globally. Measuring against the climate targets adopted at the Conference of Parties (COP21) in Paris in December 2015, is the progress in renewable energy to date profoundly inadequate in terms of its contribution to reducing emissions to levels that are consistent with the “well below 2 degrees Celsius”.

Another crucial argument in this regard is that global coal usage has doubled since the mid-1980s and grown by 748% since 1971.² The optimistic narrative tends to attribute the crisis of profitability to the deteriorating economics of fossil fuels vis-à-vis the growing competitiveness of renewable energy, thus giving the impression that the economic position of renewables is strengthening and that this is happening at the expense of fossil fuels.

Furthermore, according to the International Energy Agency do current estimations show that in order to be consistent with containing warming to two degrees Celsius, investments in renewables would need to be in excess of $1 trillion each year, from 2012 to 2050. Total global investment in renewable energy for 2015—a record year, surpassing the previous record in 2011 by three percent—amounted to just under one-third of the required level, at $329 billion. These changes are significant, but they do not signal the kind of transformation of the power sector that the optimists say (and perhaps believe) is already underway. Relative changes within the overall energy mix should not be confused with changes in the overall levels of production and consumption of any given form of energy. By focusing, only on the levels of growth achieved in the deployment of renewable energy in recent years, outside the context of the broader growth in overall energy demand. The only way renewable energy can begin to displace fossil fuels in the electricity sector is if they grow faster than the global demand for electrical power. This would require renewable power generation to grow by 30% per year in order to hold the proportion of fossil-fuel-based power at present levels.

Community energy and cooperatives are exemplified as successful models of regaining control, as the positive impact in Germany and Denmark already indicates. In relation to the renewable energy development in the United Kingdom, has since 2010 a systematic rolling back of policy support for the renewables sector in solar, onshore wind. and the zero carbon homes program been registered. The Solar Trade Association reported a loss of near 18,000 jobs due to policy decisions in the years 2015-2016, the government justified these measures based on keeping down household bills. That might be credible if parallel steps were taken to address the profits of the “Big Six” energy companies and energy efficiency.

In order to have a real chance of achieving “well below” 2 degrees Celsius target on climate change, an immediate stop in exploiting 80% of known fossil fuel reserves has to be taken by 2050 and it also means the end to searching for and extracting new fossil fuel resources. An immediate solution towards macro scale public ownership would be a shift to municipal energy, as undertaken by the Nottingham City Council with the Robin Hood Energy program in 2015. The UK’s first local authority-owned energy supply company offers lower tariffs than the Big Six on a not for profit basis. Energy is currently sourced from its own incinerator, solar panels and food waste along with gas and electricity bought on the market, the long-term aim is to be able to source itself entirely from renewable energy, other cities followed the precedent already (Leeds and Bristol).

Energy policy is also greatly influenced by fiscal and macroeconomic policy as set by the Treasury, who have oversight in controlling all public expenditure, therefore is sustainability for the Treasury primarily about economic growth, not sustainable development. As part of their departmental plan however, does the Treasury speak of long-term investments and “reliable and low carbon energy, at a price we can afford”. Nevertheless are vested interests in maintaining a fossil fuel economy predominant, which it does by generous tax relief to corporations, with aims to cut corporation tax to 18% by 2020. With the decision to leave the European Union, is the United Kingdom now forced to define its own contribution to reducing greenhouse gas emissions.

In short, switching from fossil fuels to renewables is not enough. Climate change has to be addressed as a toxic byproduct of capitalism, unfettered growth and greenhouse gas emissions, and the concentration of ownership of public goods in private hands with ‘light touch’ government. Furthermore, it has to be tackled as a political process that confronts the inherent inequality and imbalance of power in the global political and economic systems. Not surprisingly, energy policy is influenced by the underlying political philosophy of the government. Meeting emissions reduction targets involves a level of central government planning and control, which does not fit with the current model of privatization and liberalized energy markets laid down from the first privatizations of the 1980’s. So far, the unions rightly fighting to protect current jobs are doing so backing corporate interests by calling for more extraction given the lack of a credible alternative for a just transition into new jobs in a renewables economy.

More importantly, for a large-scale macro scale public ownership transition to succeed needs an immediate solution for the nexus of jobs versus environment to be identified and implemented. History proves that transitions to a new economy are never an unpretentious process, adjustment was made through class conflict and attacks on the former stronghold of organized labor. As fossil fuel is phasing out, millions of workers will need to find new jobs, many have transferable skills, which will need to be relocated into new renewable energy jobs. The Lucas Corporate Plan and the One Million Climate Jobs – Campaign against Climate Change exemplify a first attempt to start the transition:

Lucas Corporate Plan: in the 1970s, workers at the Lucas Aerospace Company in Britain set out to defeat the bosses’ plans to cut jobs. They produced their own alternative “Corporate Plan” for the company’s future. Their proposals were radical, arguing for an end to the wasteful production of military goods and for people’s needs to be positioned before the owners’ profits.

One Million Climate Jobs: the initiative has a common link to the Lucas plan and reinforced the idea that climate change is a trade union issue: it demonstrated the technical and economic potential of one million skilled, unionized climate jobs and at the same time cutting CO2 emissions by 80% over a 20-year period. With the necessary investment and public planning, climate jobs could be created in energy efficiency, insulation of homes and public buildings, mass transit on a public. Both initiatives are notable starting points in formulating an alternative to the anti-worker and environmentally destructive role the energy giants who wield such economic power. The opportunity to think and develop a strategy and program that puts workers at the center of the economic transformation.

Additionally, a just transition from an International and European trade union perspective would have to include the following elements: greener jobs, worker representation, social protections, support for innovation and technology, fair distribution of costs and social dialogue with all relevant parties. The restructuring of the concept of Energy Democracy is also vital for a successful manifestation of the transition, also is an immediate energy transition to a zero-carbon economy based on public ownership and democratic control of the energy system necessary.

Conclusion

In order to have a real chance of achieving “well below” two degrees Celsius target on climate change an immediate stop in exploiting 80% of known fossil fuels reserves by 2050 has to be taken and this also means the end to searching for and extracting new fossil fuel resources. A system of Energy Democracy that will underwrite a just transition for workers and communities across all sectors will also be crucial, as natural assets such as energy resources coal, oil, gas and water supply are extracted and transmitted by networks all owned by private companies.

According to David Hall, a new public energy system should include three key elements:

• Public ownership of the natural monopolies of the transmission and distribution grids.
• Regional or local public bodies responsible for expanding renewable energy generation and its maintenance.
• Establishment of public sector suppliers of electricity and gas available to all consumers.

The only way to a fundamental change and a transition to macro-scale public ownership will be through reclaiming ownership. As energy flows across national grid networks whose ownership has been transferred by the government to private capital, the only role citizens play in their energy system is to consume it. Restructuring the relationship between central and local government, workers, and communities to exercise democratic control is a key element for the transition to succeed. Re-municipalising the energy system as part of a worker-public partnership is crucial, as a shift to municipal energy is already happening. Pressure from the London energy democracy campaign Switched on London (SoL), supported by trade unions and anti-poverty groups is paying results. The London Mayor, Sadiq Khan has committed to a municipal energy company – Energy for Londoners – which would be by far the biggest and challenging yet. Boldness to move beyond binary arguments of ‘jobs versus environment’ and build a movement for an energy democracy transition uniting trade unions, trades councils, community groups, social justice organizations, faith groups, the climate movement, our families and those who haven’t yet realized this matters to them. The vision for an alternative ownership will only remain a pipe dream if there is no articulation and battle for it: politically, industrially and socially. Moreover, if clear demands are being set out and become central to our industrial, bargaining, political agenda, and build democratic alliances in support of them the dream might eventually become a reality. A transition is achievable if there will be a move beyond the jobs versus environment discussion, recognizing that there is little room for negotiation with the physical world when it comes to climate change and face up the threats and challenges lying ahead of us.

[1] Sweeney, Sean; Treat, John. “TUED Working Paper #9: Energy Transition: Are We ‘Winning’?” (2017).
[2] International Energy Agency. “Key Coal Trends”, excerpt from Coal Information (2016).
[3] Public and Commercial Services Union. “Just Transition and Energy Democracy: a civil service trade union perspective” (2017).
[4] Dahlgreen, Will. “Nationalise energy and rail companies, say public”. Additional information can be found under: https://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/ (2013).

Bibliography

1. Dahlgreen, Will. “Nationalise energy and rail companies, say public”. Additional information can be found under: https://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/ (2013).
2. International Energy Agency. “Key Coal Trends”, excerpt from Coal Information (2016).
3. Public and Commercial Services Union. “Just Transition and Energy Democracy: a civil service trade union perspective” (2017).
4. Sweeney, Sean; Treat, John. “TUED Working Paper #9: Energy Transition: Are We ‘Winning’?” (2017).