Battlegrounds of Labour’s Green New Deal

| 30th September 2019
The Labour party conference adopted the most radical climate policy of any in a G20 economy - but there will be battles ahead: with the leadership, and with union bosses.

Alongside the political battles...we need an ideological battle.

The Green New Deal policy passed by the Labour conference at Brighton last week was among the most far-reaching attempts by any big political party to face up to the climate and ecological emergency.

The conference urged a future Labour government to “work towards a path to net zero carbon emissions by 2030”, guaranteeing “an increase in good unionised jobs” and ensuring that the cost is “borne by the wealthiest, not the majority”.

It also called for “public ownership of energy, creating an integrated, democratic system”, including “public ownership of the Big Six [electricity generating companies]”.

Union

The resolution (text here) was passed on 24 September by an overwhelming majority, with support from trade unions including Unite and Unison.

A separate resolution supported by the GMB union and urging decarbonisation as fast as possible – but without the 2030 target – was also passed. That amounts to a “challenge to the Labour party and its grassroots activists to come up with a concrete plan to meet the 2030 target”, the journalist Ellie Mae O’Hagan argued.

More than 128 Constituency Labour Parties sent in motions on the Green New Deal – more than on any other topic – after a whirlwind campaign by Labour For A Green New Deal (LGND).

This is an important shift, forced by the upsurge of radical climate protest. It is no coincidence that it came straight after the school students’ global “climate strike” on 20 September.

But these aims of these resolutions will not be achieved without conflict – not only with energy companies, but also with senior Labour politicians and union bosses who talk green but support carbon-heavy policies.

Grid

The Labour leadership’s existing energy policy was crafted in part to avoid conflict with these powerful interests.

In the electricity sector, Labour is committed to nationalise networks, but not generation (i.e. power stations) or supply (i.e. the marketing of electricity to customers). It is silent on nuclear power, effectively leaving the pro-nuclear GMB to drive policy.

On transport, Rebecca Long-Bailey, Labour’s shadow minister for business, energy and industrial strategy, announced in Brighton a proposed “electric car revolution”. This risks wrapping the carbon-heavy car industry in green colours, instead of focusing on the shift to cities with overwhelmingly non-car transport.

To shift these policies, along the lines the conference urged or even further, will be a battle. The grounds on which it will be fought include:

a. Labour’s current electricity sector policy, Bringing Energy Home, would extend public ownership to electricity networks (cables that carry electricity from place to place, now owned by National Grid, Scottish Power and regional distribution companies).

b. The generation of electricity (power stations, wind farms, and so on), and its supply (essentially, the marketing of the electricity to users) would stay private.

Renewables

It is hard to see how a Labour government could implement strong policies on climate change and socially just electricity provision, with this half-public-ownership approach, for at least three interconnected reasons:

1. Modern electricity technologies – renewables, plus networks that distribute flows – can only realise their decarbonisation potential as part of integrated systems. The electricity sources need to be coordinated not only with each other, but with gas, heat and transport systems. If bits of these are owned by private companies, profits will be put before climate and social justice imperatives. (See a separate article on decentralised electricity, here.)

2. To roll back the effects of neoliberalism, the market model under which electricity is sold to people as a commodity needs to be challenged. The Big Six and other corporates will resist this fiercely.

3. If investment decisions are left in corporates’ hands, the shift to renewables will never happen on any timescale relevant to tackling climate change. Labour’s plan to invest heavily in publicly-controlled offshore wind, announced at Brighton last week, could be part of the answer to this.

When Jeremy Corbyn was elected Labour leader in 2015, there was talk of taking the whole electricity sector into public ownership. David Hall of the Public Services International Research Unit showed how cost-effective it would be (see his very good paper here).

Tide

But Labour’s approach was watered down under pressure from some unions. The GMB in particular values the agreements on pay and conditions negotiated for staff at the Big Six – and behind the scenes, union bosses have argued that nationalisation would endanger these agreements.

This twisted logic even found its way into Labour’s Bringing Energy Home document, which said: “The fragmentation of larger energy companies can also weaken the ability of energy workers to organise collectively.”

The obvious answer is that public ownership firstly need not cause “fragmentation”, and secondly, could guarantee a regulatory framework more, not less, favourable to workplace organising.

Other unions are ready to go further than the GMB. Dave Prentis, general secretary of Unison, recently called for the supply business to be taken into public ownership. And the Trades Union Congress passed a resolution in September for the whole electricity sector to go public, paving the way for the Labour party conference to do the same.

The movement can now build on these decisions, to reverse the neoliberal tide with public ownership, and move towards a future where electricity is a right and not a commodity.

Investment in renewables

Rebecca Long-Bailey announced at the Labour conference a “people’s power plan” to deliver a seven-fold increase in offshore wind turbines in 12 years.

“We can’t rely on the market to act fast enough”, she said: a Labour government would therefore take a majority stake in all new offshore wind farms, and “allocate £6.2 billion to jumpstarting a home-grown renewable industry”.

This sounds promising, because – despite the cost of renewable generation assets plummeting – investment in them has slowed down substantially in recent years.

Recent research by Trade Unions for Energy Democracy (TUED) showed that internationally, excluding China, levels of investment in renewables have fallen for three years running. In Europe, renewables investment peaked at $138 billion in 2011, slumped to $70 billion in 2013, picked up slightly, and fell to $57 billion in 2017.

The heart of the problem is that renewables have big up-front capital costs (to install wind turbines or solar panels), and minimal running costs. Electricity is sold on markets where prices change daily, and renewables supply drives down prices.

Investors

This proves that renewables are competitive with fossil fuels – but also means that companies wait longer to get a return on their initial investment.

Green hype churned out by the electricity industry and others usually ignores these harsh realities of capitalism.

Governments, including in the UK, have arranged various forms of subsidy to make companies’ investments worthwhile – most commonly, a “feed in tariff” where renewable suppliers are guaranteed a level of return.

But as soon as these schemes produce some results, governments are tempted to withdraw or alter the subsidies schemes.

And then, as TUED puts it: “Investors then see diminishing profit margins and lose interest. (‘Too bad about the planet but, hey, there are other things to invest in.’)”

Current

TUED continues: "Because of falling auction prices [in electricity markets], many people still assume that the market share of renewables will reach a 'tipping point' once they become the 'least cost option'. [And certainly friends in the Labour Party have put that argument to me, in defence of its approach.]

"But because there is simply not enough profit in 'low carbon solutions' like renewable power generation – at least, not without subsidies – renewables are unlikely to attract the levels of capital needed to achieve the Paris [climate change] targets.

"[...] The insistence on private-sector-led investment in renewables, which we are told needs to be 'unlocked' through various incentives – subsidies, feed-in-tariffs, guaranteed returns through power purchase agreements, etc – has proven to be a disastrous failure."

History shows that, under capitalism, large-scale public investment – whether to build railways or sewage systems, or to electrify the countryside – is almost always borne by the state. Corporations are too short-sighted and too profit-focused. State-led investment is surely the best way to start a rapid transition away from fossil fuels, too.

So Labour’s plan to invest in offshore wind is welcome – although it’s not clear how it will fit with current policy of leaving the Big Six privately owned.

Nuclear power

The GMB and many Labour MPs see nuclear power, rather than renewables, as the main alternative to fossil-fueled electricity generation. Tim Roache, GMB general secretary, argued recently for “a fleet of new nuclear power stations to make emissions reduction a reality”.

Were such an approach adopted, a future Labour government would help to lock electricity into a centralised system, closely allied with the UK’s reactionary (and deluded) military aims. Renewables, and the decentralisation that realises their potential, would suffer.

Under the Tory government, subsidies to renewables are being cut, while the new nuclear power station being built at Hinkley has been guaranteed a price for its electricity, far above the market rate, for 35 years into the future. There is no sign Labour intends to change this.

Dave Toke, the energy policy researcher, reckons that the GMB will use the regulatory structure that Labour proposes to nuclear’s advantage.

He commented: "The proposals [in Bringing Energy Home] make a gesture in favour of municipalisation, but for most places the reality will be central control.

"[...] The GMB has consistently urged the government to shore up plans for nuclear power stations with state money. This is despite the fact that the nuclear power plants are taking decades to deliver at very high costs for the energy consumer and almost certainly also the public finances.

"Of course the GMB is guided by its members, and many of them work in nuclear power stations. Fair enough. But why should this fact dominate UK energy policy? Yet Labour's centralist dominated proposals seem destined to achieve just this."

Transport

The Labour conference’s Green New Deal resolution called for “community transport”, a “transition to sustainably powered rail freight” and “local schemes that make walking and active travel safe, attractive, environmentally sustainable options”.

This is at odds with votes and statements from leading Labour politicians which enthusiastically support huge infrastructure projects that will increase the number of cars on the road and planes in the skies. These include, most notoriously:

■ The planned third runway at Heathrow, for which 115 Labour MPs voted last year; and

■ The Silvertown tunnel in east London, which is opposed by a local residents’ campaign – as well as most local Labour councils and Labour party branches – but is being pushed ahead by London mayor Sadiq Khan.

Electric cars

The “electric car revolution” announced by Rebecca Long-Bailey, which aims to “strengthen British car manufacturing and tackle climate change”, is potentially the most damaging piece of greenwash endorsed by Labour.

On day one of forming a government, Labour says it will consult with industry and unions on the transition from internal combustion engines (ICEs) to “zero emission vehicles” – classic double-speak that ignores technological reality.

There is simply no credible possibility of vehicles being “zero emission”. Until a radical change in the way electricity is generated – which under Labour’s plans could be a couple of decades away – there is not even much chance of electric vehicles being significantly less carbon-intensive than those running on petrol.

That’s because, while electric engines are about twice as efficient as ICEs, gas-fired power stations - the most common type in the UK - are less than 50 percent energy-efficient: that is, for physical reasons, half of the energy content of the gas is lost at the power station.

Apart from that, there are the energy and emissions costs of building cars, roads and parking spaces.

Revenue

Resources put into electric cars could instead be invested in public transport and urban development schemes, that would focus on drastically reducing the number of cars. This means changing not only the way we move around cities, but the way we live and work in them. It means envisioning cities in which there is no rush hour.

All this is well understood by LGND, and the campaign group wrote in a briefing paper: "Many strategies for a decarbonised transport system envisage a virtually one-for-one swap from petrol and diesel cars to electric vehicles (EVs).

"Aside from the role of continued personal vehicle use in driving inequality [...] a private-car dominated transport system will have other serious negative impacts, [including adding to demand for cobalt and clean electricity, air pollution, etc].

"The Green New Deal will therefore prioritise green, low-cost or free public transport that avoids these damaging impacts.

"Premising the decarbonisation of transport on supply of EVs by major automotive companies looking to maximise the remaining revenue they can extract from fossil fuel powered vehicles could become a serious bottleneck to rapid decarbonisation, particularly as the automotive industry continues to dismantle climate legislation [in the USA] despite claiming to support an EV-based future."

Tax havens

Campaign groups including ScotE3, and Extinction Rebellion Scotland, are urging a just transition away from oil production in the North Sea, to ensure that communities dependent on it do not suffer. Labour has yet to formulate a policy on the issue.

Traditionally, Labour went along with the government-backed strategy of “maximising economic recovery”, that is, recovering every last drop of oil and gas possible, as the North Sea’s production levels go into natural decline. That approach contradicts all the climate targets signed up to by Labour and Tory governments alike.

Under Jeremy Corbyn’s leadership, Labour’s stance has started to change. Clive Lewis, shadow treasury minister, has denounced tax cuts that form part of “maximising economic recovery”.

Along side this, the Labour conference resolution included laudable statements on “supporting developing countries’ climate transitions”, welcoming climate refugees and pressing for heavy UN penalties for “ecocide”.

To put teeth into such principles, LGND advocates measures including closing down the UK’s tax havens and eliminating subsidies including international public finance support.

It called for actions to address the “unjust, neo-colonial and unsustainable economic structures” that help multinational corporations to plunder countries in the global south and use indebtedness to keep them poor. Obviously all this depends on a future Labour government’s ability and willingness to challenge international financial capital more broadly.

A concluding thought

Many of the policies advocated by LGND implicitly challenge the Labour party’s traditional commitment to “economic growth”. Alongside the political battles mentioned above, we need an ideological battle.

Naomi Klein, the ecosocialist writer, offered a challenge last week to “a left worldview that is essentially only interested in redistributing the spoils of extractivism and not reckoning with the limits of endless consumption”. Too right.

This Author

Gabriel Levy is a writer with People & Nature, where this article first appeared

Further reading

How to win a socialist Green New Deal, by Chris Saltmarsh

What does “climate emergency” mean? Let’s define that OUTSIDE parliament (People & Nature, May 2019)

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