Our Burning Planet

CARBON CRISIS OP-ED

Why the fossil-fuel industry is a distraction to understanding the failure of COP27

Why the fossil-fuel industry is a distraction to understanding the failure of COP27
From top: Trucks queue at the Korczowa border crossing in Poland on Thursday, 17 March 2022. Russia’s war on Ukraine is snarling supply chains, driving up costs and squeezing profits. (Photo: Angel Garcia / Bloomberg via Getty Images) | Motorist fill tanks before a petrol price hike on 2 November 2021 in Ekurhuleni. (Photo: Gallo Images / OJ Koloti) | (Photo: Waldo Swiegers / Bloomberg via Getty Images)

We should not be distracted by holding the fossil-fuel industry accountable for the failures of the COPs. Instead, we must understand the incestuous links between politics and business and why world leaders ignore science and condemn us all to a long suicide.

At the opening of COP27 on 7 November 2022, United Nations Secretary-General António Guterres shunned diplomatic speak: “We are on a highway to climate hell with our foot on the accelerator,” he warned. Humanity, he said, faced the starkest of choices: “Cooperate or perish”.

After more than two weeks of talking, he gave his verdict on the concluded 27th annual conference of the 196 countries represented: “Our planet is still in the emergency room. We need to drastically reduce emissions now — and this is an issue this COP did not address. The world still needs a giant leap on climate ambition.”

He was hardly alone in this sombre assessment.

Listen, for instance, to the President of COP26, the then member of Boris Johnson’s (very) Conservative cabinet in Britain, Alok Sharma:

“Friends, I said in Glasgow that the pulse of 1.5 degrees was weak. Unfortunately, it remains on life support. And all of us need to look ourselves in the mirror, and consider if we have fully risen to that challenge over the past two weeks.”

All the governments at COP seemingly accept the science of climate change. Let the last words, therefore, be from the frustrated world-renowned climate scientist, Bill McGuire, professor emeritus of geophysical and climate hazards at University College London (UCL):

“The real legacy of Cop27 could well be exposing the climate summit for what it has become, a bloated travelling circus that sets up once a year, and from which little but words ever emerge. … It is becoming increasingly difficult to view these events as anything other than photo opportunities for presidents and prime ministers who turn up simply to make the world think they care.”

No! No! One can hear people saying. COP was a success. Criticisms of it are Eurocentric or a Global North assessment. After all, the dominant theme of the conference was financial help for developing countries, with Africa as the particular focus. And this, they say, was achieved. For Sameh Shoukry, the Egyptian foreign minister and COP27 president, this was an African COP with emphasis on African needs.

“Cop27 has done what no other Cop has achieved,” said a jubilant Mohamed Adow, director of the thinktank Power Shift Africa.

“This has been something which vulnerable countries have been calling for since the 1992 Rio Earth Summit. … After 30 years of hurt, climate action is finally coming home on African soil here in Egypt.”

(For similar statements see here, and here, and here).

This jubilation, however, is more wish-fulfilment than fact. Behind the smoke and mirrors is the reality of no sums of money being actually committed. Even worse, the rules of how the fund would work have been deferred to next year’s COP28. In the absence of these crucial details, Loss and Damage, the claimed success of COP27, remains little more than having created “an empty bank account” in the pithy words of Henry Kokofu, Ghanaian politician and head of the Climate Vulnerable Forum.

It’s the fossil-fuel industry, stupid!

There is one thing about which there is universal agreement: fossil fuels are responsible for the Anthropocene, for human-caused climate change. One doesn’t have to be a Marxist to conclude that this industry has the most to lose from the now globally accepted imperative of a just transition from fossil fuels to renewable energy. It is therefore hardly surprising that lobbyists for this industry have had a major presence at all 27 of the COPs.

But their presence is attracting ever-increasing disquiet. With a 25% increase over COP26, there were 636 lobbyists from the oil and gas industries registered at COP27. These lobbyists outnumbered any single national delegation, the only official Party recognised at these Conferences of the Parties.

The failure of COP27 is indeed now being laid firmly at the door of these fossil fuel lobbyists. Damian Carrington, The Guardian’s Environment editor, speaks for many, when declaring “the fight to end the fossil fuel industry must be ramped up”.

Commenting on COP27’s effective burial of the essential need to reduce carbon emissions, the climate scientist, Bill McGuire, noted: “It really does beggar belief, that in the course of 27 COPs, there has never been a formal agreement to reduce the world’s fossil fuel use.”

Like so many others, he attributed this outcome to COPs’ “hijacking by the fossil fuel sector”.

Despite appearances, how valid is this understanding?

Ignoring their own evidence

The very people fingering the fossil fuel industry also provide enough information about the problem being far more complex than the fossil fuel industry and its lobbyists. They all allude to political power but without any elaboration. Thus, there are passing references to: “COP27 has shown it is politically impossible” to achieve the still physically possible 1.5°C goal; or “nations controlled by political elites”. But nothing more.

Similarly, Bill McKibben, the veteran environmentalist and climate change campaigner, notes: “In countries like the US or Canada, the political power of the fossil fuel industry is still considerable. Barack Obama boasted to a Texas audience last year that during his administration the US had passed Russia and Saudi Arabia as the biggest producer of hydrocarbons; even the progressive Canadian prime minister Justin Trudeau recently spent billions in tax dollars to finance a pipeline designed to increase exports from the country’s environmentally ruinous tar sands.”

Moving from North America to the world, McKibben further notes the “unrelenting political power of the fossil-fuel industry.” But he remains silent about the nature and implications of this political power.

Then, there’s South African Robyn Hugo, of Just Share. She advises us: “We must also understand and expose the link between government lethargy on climate action and the unprecedented lobbying activity by the fossil fuel industry and associated industry associations to weaken, delay and oppose climate-related regulation.”

Despite her unelaborated “link”, her move from a highly generalised “political” to a focus on governments is useful, for it’s where we ultimately need to go. But, first, there’s the need to dispose of another popular idea.

Politicians for sale 

Damian Carrington, informing his Guardian readers of a new report detailing the profitability of the fossil-fuel industry, writes about $2.8-billion a day or $52-trillion being the “pure profit” the industry has made since 1970. He quotes the report’s author, Prof Aviel Verbruggen, an energy and environmental economist at Antwerp University and a former lead author of an Intergovernmental Panel on Climate Change report as saying:

“It’s a huge amount of money. You can buy every politician, every system with all this money, and I think this happened. It protects [producers] from political interference that may limit their activities.” 

George Monbiot is among the many repeating the idea of bought politicians. 

Apart from offering no evidence for corruption being the sole or even major reason for the political support enjoyed by the fossil-fuel industry, Verbruggen’s analysis shows that the huge profits involved were the result of the inflated prices created by the cartel, the Organization of Petroleum Exporting Countries’ (Opec), manipulation of supply. This, according to Verbruggen, “changes the fundamentals of the markets,” resulting in the then $100 a barrel of oil rather than what he calculates to be the free market price of $20-$30.

What Verbruggen doesn’t do is say anything about this cartel — which he doesn’t even name — or why the usually assiduous enforcers of the many international agreements and national laws proscribing cartels — the US and EU, for example — accept this frontal offence against free markets.

Answering this puzzle takes us into the political labyrinth way beyond the fossil fuel industry.


Visit Daily Maverick’s home page for more news, analysis and investigations


Economics is a political argument” – Ha-Joon Chang (Economics: The User’s Guide, 2014, p.451)

The connecting threads I give to Cambridge economist Ha-Joon Change’s aphorism, include:

Politicians as national salespeople

President Cyril Ramaphosa — who before his formal parliamentary roles was a successful businessperson and is still among the richest South Africans — recently went on an official state visit to Britain. Business was his visit’s open mission. A Times report, with the headline: “Ramaphosa woos UK businesses to invest in SA, wants wine exports to double”, makes this clear. The article bears quoting if only because what it reports is what is expected of political leaders. Yet it is this very obviousness that mostly fails to get recognised as the standard economic involvement of political leaders.

Ramaphosa met the British prime minister and business leaders “to discuss trade and investment… in a bid to convince them South Africa was open for business”. With bilateral trade between South Africa and Britain worth R226-billion, Ramaphosa informed his hosts that “exports from South Africa to the UK are estimated to support about 140,000 South African jobs, which is quite significant, a number we would like to see growing on an annual basis.”

With Britain also being the largest foreign investor in South Africa, Ramaphosa said the government was keen to know what still needed doing to encourage businesspeople to increase investment in South Africa

“It is important for the South African government to understand the issues, concerns and expectations that you as business in the UK have on us. We have in the past listened very carefully to some of the concerns and have taken dramatic steps to address a number of the issues raised with us.”

Britain’s Secretary of State for International Trade, Kemi Badenoch, reassured Ramaphosa: “We wouldn’t be here [meeting you] if we didn’t want to do more because when South Africa flourishes, so does the UK.”

Before seeking to make clear why — other than limited corruption — governments take on this often huckstering role, a brief look at some of the other threads to “economics is a political argument” is needed.

Governments’ further business promotions, protections & priorities

Subsidies:

According to the World Bank, the global fossil-fuel industry receives government subsidies of $16-billion a day.

Climate finance, Covid-19 rescue and debt:

In a Guardian interview on the eve of COP27, the UN’s António Guterres noted that $16-trillion was mobilised to finance the economic recovery from Covid-19. Although he didn’t do so, this puts in perspective the rich world’s singular failure to raise the $1-billion a year for climate change finance pledged at COP15 in 2009. What Guterres did do, however, was to draw attention to the developed world’s failure to provide debt relief, especially to those poor countries devastated by climate change. The government-driven political economy of debt should be noted, even though it is beyond the scope of this article.

Carbon tax relief

South Africa’s carbon tax, first introduced in 2008, remains a sham 14 years later, as Robyn Hugo details in a telling summary of this delay. Yet, the minister of finance, who is responsible for this tax, reassured Parliament earlier this year that the carbon tax is still the “main mechanism to ensure we lower our greenhouse emissions”. One may well ask: why the protection of the fossil-fuel industry and the deception of Parliament? Indeed, why was Parliament so ready to be deceived?

Others, besides business, are involved in the political argument that is economics. This, however, is for another time.

Reform or revolution: What happens when the marriage between politicians and businesspeople ends in divorce?

I have deliberately personalised the relationship as being between people, rather than the dehumanised entities of politics and economics. This is because we are all social individuals shaped by — while shaping — the living organism we know as society, an organism open to change while it self-replicates.

One of the universal features of society’s modern form is inequality, as Thomas Piketty demonstrates in his monumental Capital in the Twenty-First Century. The privileged few sit on top of whatever structure the inequality takes in each particular society. They are held together by the privileged wealth and status they enjoy, regardless of the multiple forms of their wealth.

While the wealth of the most privileged is economically based, the income of parliamentarians — starting at R1.14-million a year in South Africa — together with the economic connections they make, allows them to establish direct, personal interests in the health of the economy.

The political interests in the economy are replicated by business interests in politics. The revolving door between business people and politicians is a global feature, prominently represented in South Africa by finance ministers and governors of the Reserve Bank moving into the finance sector’s most senior positions.

Democracies give a particular political urgency to economics. This is because the state of the economy, including employment, is (usually) a key determinant in elections. Moreover, parliaments everywhere have a permanent interest in the economy. This begins with the fundamental issue of state revenues being determined by various national taxes, royalties and rents, the size of which vary according to the changing condition of the national economy.

Mark Campanale at Carbon Tracker helps us understand one aspect of why governments are eager to protect oil companies: “To keep to 1.5°C, this means [international oil companies alone] forgoing around $100-trillion of potential revenues. You can see why oil oligarchs and nations controlled by political elites want to keep their fossil-fuel rents, the source of their power.”

Despite Campanale, without explanation, confining this insight to “nations controlled by political elites”, it applies no less to whoever he thinks are “democracies”. If this were not the case, these democracies would not be protecting this $100-trillion — to say nothing of their failure to act on the research Carbon Tracker provides them for tackling climate change.

Over and above these political and economic connections are the social ones, which overcome the otherwise economic-political divide. These social connections ensure that the businesspeople/politicians and their families mix together, play together, are educated together, and marry together. It is these social links that organically bind political and business practitioners.

Any significant break in these bonds precipitate and/or result in big societal changes. The “miracle” of the South African transition of 1994 made the South African privileged multiracial. In exchange for preserving the capitalism feeding all the privileged, and the opening of economic wealth to a black elite, political power was given to the previously disenfranchised in a unitary state subject to one-person-one-vote elections. Despite subsequent economic crises — including global ones — the privileged have grown in number, while retaining their relative privileges.

Whether these reforms have benefitted the large numbers of everyone else, is another matter.

While the marriage holds, this means not being distracted by holding the fossil-fuel industry accountable for the manifest and prolonged failures of the COPs. This, in turn, unavoidably adds enormously to the challenge of stopping the climate catastrophe.

Parliaments, whatever their form across the world, make the laws, state policies and through their leaders represent their countries at the COPs. A better understanding, therefore, of the close marriage between politicians and business leaders the world over highlights the far deeper reasons why the world leaders ignore the very science they proclaim to be upholding — and thereby condemning all of us to a long suicide.

Being depressed or merely shouting “hypocrisy” gets us nowhere. What we do instead remains the burning issue. But at least we won’t be diverted by mistaken understandings of the problem.

Even if one were to agree that something more than reform of the marriage is required, it still leaves us begging the question: How? How to mobilise sufficient numbers of us with a voice the Cop-Out politicians can no longer ignore. DM/OBP

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