In other words, failure to invest in decarbonisation is essential to a private energy sector. There is no redemption arc for private energy companies.
It's no coincidence that the intensification of the climate crisis has occurred in parallel with the far-reaching privatisation of the global economy.
The neoliberal project of reorganising every corner of society to adhere to the competitive logic of the “free market” has systematically undermined the collective action needed to avert runaway climate change.
The capitalist project of ensuring the profit motive dominates the production of every good and provision of every service has afforded the fossil fuel industry life-support lasting decades longer than it should have ever been allowed.
Fossil fuel companies like Exxon and Shell knew about the climate breakdown their extraction would induce before everybody else. They didn’t just refuse to change their business model. They actively funded climate change denial to suppress the authority of the science. Why? Fossil fuels are still profitable.
Even as fossil fuel share prices begin to fall, they remain among the assets with highest returns for investors. Left to market forces and the profit motive, private energy companies will continue the exploration and extraction of new fossil fuels as the world around them burns.
A new report published by campaign group We Own It, ‘When We Own It: A model for public ownership in the 21st century’, offers the starting points of a response to the rampant privatisation that has precipitated climate breakdown and wider social crises like inequality.
The report comes in response to the Labour Party’s consultation on democratic public ownership. It draws on best practice case studies from Brazil to Barcelona to call for public ownership of water, energy, public transport and the Royal Mail.
‘When We Own It’ is clear in its framing of the problem: “Private energy companies fail to invest in our green energy future.” Significant here is the tense of the claim. The assertion is not that private companies have failed in the past tense (though they incontestably have) but that they fail in the continuous.
In other words, failure to invest in decarbonisation is essential to a private energy sector. There is no redemption arc for private energy companies. It is their necessary pursuit of private profit which blocks investment in a renewables sector tending towards abundant, decentralised energy production.
The alternative is public ownership of key services locally, regionally and nationally to shift the energy sector’s focus towards renewables in a transition to a zero-carbon economy.
The report’s first point in support of public ownership is that “publicly owned companies can put their purpose or mission ahead of profit.”
Currently, private companies are preoccupied with returning sizeable dividends to shareholders. Social and environmental concerns are necessarily secondary.
With participatory democratic control, and with no shareholders to be satisfied with profits, publicly owned services are free to prioritise the common good.
As well as structuring profit out of the equation, the report argues that public ownership provides the space “to build collective responses to the huge challenges we face.”
Individualist and consumerist strategies to address climate breakdown have emphatically failed. The public have not taken to voluntarily reforming their lifestyles and consumption habits to save the planet.
Even if they did, consumer choices within capitalist “free markets” will never be enough to fully decarbonise society. Our economy has fossil fuel extraction structured into its fundamental logic.
Only a collective response mediated through democratic ownership can transform the economy to marginalise fossil fuels and embrace renewables on the necessary timescale.
Alongside a just energy transition, one of the most exciting ambitions ‘When We Own It’ is an integrated public transport system. Public ownership of trains and buses is already popular with the promise of cheaper, faster and more connected services.
The radical expansion of integrated public transport across the country and continents also provides a key opportunity to lock the economy into zero-carbon infrastructure while marginalising short-haul aviation.
Grand ambitions aside for a moment, we should be clear that in the context of the climate crisis we seek to address our models of public ownership must be intentionally directed to solve these problems.
Done carelessly, we could easily extend public ownership across the economy while maintaining fossil fuel extraction. State-owned oil companies including from Saudi Arabia to China, Malaysia, Venezuela and Kuwait make this abundantly clear.
The report recommends required duties for public companies. For example, they may have a duty to decarbonise or promote biodiversity. With this explicitly enshrined duty, the public can hold their companies to account and themselves set targets commensurate with the crises they seek to address.
After decades of failure by private companies to do anything towards tackling climate breakdown, the responsibility to take action must now exclusively sit in the hands of the people. ‘When We Own It is an apt name for this report. It can no longer be a matter of ‘if’ but ‘how soon’ with discussions of public ownership.
A future our democratic, public ownership of our shared resources is in sight. To fully address the climate crisis, it must now be inevitable.