Resources Research

Culture and systems of knowledge, cultivation and food, population and consumption

Posts Tagged ‘coal

The power-guzzling Indian steel genie

leave a comment »

The Parliamentary Consultative Committee to the Ministry of Steel and Mines has just met. Its chairperson, the Union Minister of Steel and Mines, Narendra Singh Tomar, has following the meeting made an announcement which, if even partly pursued, will alter hugely India’s energy use, our energy mix and our emissions of CO2. Its ecological impact can barely be guessed at.

Tomar said that until 2014 India was the fourth largest producer of iron and steel in the world (after China, Japan and USA). The first five months of 2015, according to industry data, indicate that India will end the year one position higher. This possibility is seen as a triumphant landmark by the present government, for USA will then be relegated to fourth place.

As the table alongside shows, India produced 81.3 million tons of steel in 2013 and 86.5 million tons in 2014 (data from the World Steel Association). The achievement that the minister is so proud about is the data for January to May 2015, during which time India produced 37.6 mt compared with the USA which produced 33.1 mt. On this basis, Tomar and the ministry and the country’s iron and steel industry see a bright future.

Country-wise steel production. Table and data: World Steel Association

Country-wise steel production. Table and data: World Steel Association

So bright indeed that Tomar (having duly consulted the mandarins who are in the know of such things in the ministry) announced that as India’s per capita steel consumption is “quite low, 60 kilograms as against the world average of 216 kilograms, this low consumption no doubt indicates huge growth potential for Indian steel industry”. It hasn’t occurred to any inside the ministry or outside it apparently to wonder whether we would get by quite nicely with 60 kg per person per year or even 50 kg, now that so much has already been built using iron and steel.

But no, Tomar has instead grandly announced to the members of the Parliamentary Consultative Committee that “India has fixed a target of 300 million tonnes production capacity by 2025 and steel ministry is working out action plan and strategies to achieve this target”!

Where did this absurd ‘target’ come from? Does the Union Minister of Steel and Mines simply make numbers up as he wanders about gawking at blast furnaces and iron ore mines or are there advisers in this ministry, in the Ministry of Power (which includes coal and renewable energy), in the Ministry of Environment, in the Ministry of Rural Development and in particular in that ministry’s Department of Land Resources, who has given him these numbers? Or has this monstrous and foolish number come from the world’s iron and steel industry and in particular its Indian private sector heavyweights?

The World Steel Association, which serves as the apex association of the metalmen, scarcely bothers to camouflauge what it wants – that the two big and neo-liberally growing Asian economies continue to feed their appetite for iron and steel. “Despite continued turbulence around the world in 2014, it has been another record year for the steel industry,” explained the Association in its 2014 statistical round-up. “Crude steel production totalled 1,665 million tonnes, an increase of 1% compared to 2013. 2014 also saw the emergence of a new phase in steel markets. For the past decade, the steel industry was dominated by events in China. The evidence is that the steel industry is now entering a period of pause before undoubtedly picking up again when markets other than China drive new demand.”

That phase concerns India, the pause is the building of new steel-making capacity in India (and the staking out of new areas, many under dense old forest, to dig for iron ore and for coal), we are the market other than China (whose steel plants are working at 70% of capacity, if that, and whose consumption growth has stopped), and it is India, in this metallic calculation, that will drive new demand. That is the reason for Tomar’s announcement of per capita kilo-consumption of steel and the 300 million ton figure.

It is scandalous that a minister in charge of a major ministry makes such an announcement without a moment’s thought given to what it means in terms of energy use and what it means in terms of raw material. It takes a great deal of energy to make a ton of steel. Industry engineers call it energy intensity and, including the wide range of methods used to make steel and the wide variety of raw materials used, this energy intensity varies from about 15 gigajoules (GJ) per ton to about 23 GJ per ton.

Put another way, it takes as much energy as 22 average urban households in India use in a month (at about 250 units, or kilowatt hours, per month each) to make a ton of steel. This is the equivalence that ought to have been discussed by the Parliamentary Consultative Committee so that choices can be made that lead us to decisions that do not bury us under kilograms of steel while we suffocate from pollution and have no trees left to provide shade. The equivalence begins with the 86.5 million tons of steel India produced in 2014. This is 237,000 tons per day. India also generated some 1.2 million gigawatt hours of electricity in 2014-15. The two measures are not operands in the same equation because steelmaking also uses coking coal directly.

What we do know is that the residential and industrial sectors consume about 40% and 30% respectively of energy generated, that the making of iron and steel is extremely energy-intensive (it is estimated to account for about 6.5% of India’s total emissions), and that this sector alone accounts for a quarter of India’s total industrial energy consumption. And this is at 86.5 million tons, whether we stand at third or fourth place on the world steelmaking victory podium.

To make these many tons (for our regulation 60 kilos per year ration) it takes a gigantic quantity of raw material. A ton of steel produced in a basic oxygen furnace (which is how 42% of our steel is made) requires 0.96 ton of liquid hot metal (this in turn comes from 1.6 ton of iron ore and 0.6 ton of coking coal) and 0.2 ton of steel scrap. A ton of steel produced in an electric-arc furnace (58% of steel is made this way in India) requires around 0.85 tons of steel scrap and supplementary material amounting to about 0.3 tons (the coal having been burnt in the thermal power plant elsewhere).

What justification can Minister Tomar and his associates provide for this mad project to enclose all Indians in choking suits of armour? it comes from the world’s foremost ironmongers, speaking through their association: “The impact of urbanisation will have a key role to play in the future. It is estimated that a little more than one billion people will move to towns and cities between now and 2030. This major flow will create substantial new demand for steel to be used in infrastructure developments such as water, energy and mass transit systems as well as major construction and housing programmes.” And there we have it – the urbanisation obsession of India translated into ever heavier per capita allotments of metal, and to hell with the trees and the hills.

Written by makanaka

July 7, 2015 at 23:18

India’s giant megawatt trap

leave a comment »

A panel of charts that show India’s energy consumption, imports, and dependence on fossil fuel.

A panel of charts that show India’s energy consumption, imports, and dependence on fossil fuel.

Electricity as fundamental right and energy convenience as the basis of ‘development’ in Bharat and in India. If this is what Piyush Goyal means when he says his government is “is committed to ensure affordable 24×7 power” then it will come as yet another commitment that supports energy provision and consumption as the basis for determining the well-being of Bharat-vaasis and Indians (the UPA’s Bharat Nirman was the predecessor). But the Minister of State (Independent Charge) for Power, Coal and New and Renewable Energy cannot, using such a promise, ignore the very serious questions about the kind of ‘development’ being pursued by the NDA-BJP government and its environmental and social ramifications. [This article is also posted at the India Climate Portal.]

Goyal has said, via press conferences and meetings with the media, that the NDA government is committed to ensuring affordable power at all times (’24 x 7′ is the expression he used, which must be banished from use as being a violent idea – like nature our lives follow cycles of work and rest and ’24 x 7′ violently destroys that cycle). Goyal has promised, pending the taking of a series of steps his ministry has outlined, that such a round the clock provision of electric power will be extended to “all homes, industrial and commercial establishments” and that there will be “adequate power for farms within five years”.

The summary of India’s power generation capacity, by type and by region. Source for data: Central Electricity Authority

The summary of India’s power generation capacity, by type and by region. Source for data: Central Electricity Authority

Some of the very serious questions we raise immediately pertain to what Goyal – with the help of senior ministry officials and advisers – has said. The NDA-BJP government will spend Rs 75,600 crore to (1) supply electricity through separate feeders for agricultural and rural domestic consumption, said Goyal, which will be used to provide round the clock power to rural households; and (2) on an “integrated power development initiative” which involves strengthening sub-transmission and distribution systems in urban areas. This is part of the “transformative change” the ministry has assured us is for the better. Goyal and his officials see as a sign of positive transformation that coal-based electricity generation from June to August 2014 grew by nearly 21 per cent (compared with the same months in 2013), that coal production is 9% higher in August 2014 compared with August 2013, and that Coal India (the largest coal producer company in the world which digs out 8 of every 10 tons of coal mined in India) is going to buy 250 more goods rakes (they will cost Rs 5,000 crore) so that more coal can be moved to our coal-burning power plants.

UN_Climate_Summit_2014_smWe must question the profligacy that the Goyal team is advancing in the name of round the clock, reliable and affordable electricity to all. To do so is akin to electoral promises that are populist in nature – and which appeal to the desire in rural and urban residents alike for better living conditions – and which are entirely blind to the environmental, health, financial and behavioural aspects attached to going ahead with such actions. In less than a fortnight, prime minister Narendra Modi (accompanied by a few others) will attend the United Nations Climate Summit 2014. Whether or not this summit, like many before it, forces governments to stop talking and instead act at home on tackling anthropogenic climate change is not the point. What is of concern to us is what India’s representatives will say about their commitment to reduce the cumulative impact of India’s ‘development’, with climate change being a part of that commitment. [Please see the full article on this page.]

Written by makanaka

September 13, 2014 at 18:33

The common good of India and the Planning Commission of today

leave a comment »

Montek_Singh_questionThe Deputy Chairman of the Planning Commission, Government of India, has in an interview starkly emphasised the priorities for the current government, priorities which accord no importance whatsoever to the principles governing the work of the Planning Commission itself, principles that were clearly enunciated 63 years ago.

In the interview, titled ‘We can’t get on a 9% growth path if we underprice energy’, Montek Singh Ahluwalia, the Deputy Chairman of the Planning Commission, has been asked a series of questions by reporters of one of India’s English-language business and financial dailies.

Q 1. Of late, there have been moves to correct the under-pricing of energy. Is the government moving the way the 12th five-year Plan document wanted it to? [In this question the reporters provide as a given the idea of ‘under pricing’ of energy in India.]

A 1. If prices do not reflect the real cost of energy, why will anyone invest in energy-saving equipment? Also, if prices don’t reflect the marginal cost of supply, which is imports, why will people invest to produce energy? Our problem is that energy is generally under-priced. Diesel, cooking gas and kerosene are under-priced.
We need a complete rethink on energy prices and align close to world prices. We cannot close the gap at one go but phased adjustment is necessary. Nobody likes to pay a higher price but we must recognise that we cannot expect to get on a nine per cent growth path if we don’t align its energy prices with global prices.

Ahluwalia wants nine per cent annual growth of the Indian economy at all costs. That these costs are social, ecological and ruinous are of no concern to him. He is only interested in the ‘marginal cost of supply’ of energy, of investment to produce more energy. He has ignored the data from the Government of India (in fact the Central Electricity Authority) which shows that the transmission and distribution losses between power generation and consumption are still 24% averaged for the last five years. Ahluwalia is either ignorant of or unmindful of the steep rise in the ‘fuel and light’ sub-index of the All-India Consumer Price Index. Over a single month, from November to December 2012, the fuel and light index for agricultural labourers rose from 760 to 769 and for rural labourers it rose from 758 to 766. What will this index reach for these two groups if Ahluwalia (and his supporters) has his way? What fearful cost will be exacted from India’s agricultural and rural labourers when our prices are ‘aligned’ with global prices? For whose benefit is this alignment being promoted by Ahluwalia?

Q 2. What should be the direction in coal?

A 2. We need some difficult decisions there. In the Plan, we have clearly said the nationalisation of coal needs to be reconsidered. There is no economic logic in keeping the private sector out of coal if it is allowed in petroleum and natural gas. Why do we allow the private sector in these areas? Because we want to bring in as much investment as possible into energy production and we want new technology.

Ahluwalia is (a) contemptuous about the Planning Commission’s own ‘Low Carbon Strategies for Inclusive Growth’ direction paper, in which the adoption of renewable energy sources and the steady reduction of coal and oil as primary fuels is advocated, and (b) conceals the truth that in India there are 455 new coal-powered generation plants under construction or have been approved (who needs clearances from the castrated Ministry of Environment and Forests? who needs environment impact assessments, pesky things that hinder our gallop towards GDP growth rates? who needs public consultation when the Prime Minister’s Office itself rams through projects?) or being planned. These 455 coal burners are to generate some 519,396 megawatts. For whom? For those agricultural and rural labourers struggling to buy kerosene for a stove on which to cook their evening meals? No, for the urban middle classes  who are being gathered together by India’s unspoken social engineering project that herds the income-privileged into towns and cities.

Many of these new coal burners are private sector already. I mention coal burning power plants currently under construction in three states only to overturn Ahluwalia’s economy with the truth. In Andhra Pradesh who are VSF Projects, Thermal Powertech Corporation, Indu Projects Limited and Dr. RKP Power? In Bihar who are AES India, Mirach Power Pvt. Ltd, Triton Energy Ltd and Buxar Bijlee Company? In Maharashtra who are Indiabulls Power, Ideal Energy Projects, Mantri Power and Lenexis Energy? Who are they if not private?

The World Resources Institute’s Global Coal Risk Assessment explained: “International public financial institutions are important and long-time contributors to the coal industry. Since 1994, multilateral development banks (MDBs) and industrialised countries’ export credit agencies (ECAs) have helped finance 88 new and expanded coal plants in developing countries, as well as projects in Europe. Together, MDBs and ECAs have provided more than US$37 billion in direct and indirect financial support for new coal-fired power plants worldwide. The World Bank has actually increased lending for fossil fuel projects and coal plants in recent years. An analysis by the Environmental Defense Fund concludes that the lending strategies of MDBs and ECAs in the energy sector do not sufficiently consider the environmental harm wrought by fossil fuel projects.”

Q 3. There is a talk of a food security law and there is a five-year map for the fiscal deficit. Can both go hand in hand?

A 3. Yes. If food security is a critical programme, we can give it top priority and cut something else. We have talked about reducing subsidies from 2.4 per cent of GDP to 1.5 per cent. We have not said there should be no subsidy. There is enough room in the limit indicated to accommodate a sensible food security bill but it does mean other subsidies will have to be cut more.

Why is Ahluwalia using an ‘if’ to misqualify the need for the Republic of India to provide affordable food to its citizens? What is meant by “cut something else”? Who is to decide what essential programmes need support if not the citizens of India through their representatives and through public participation and consultation? Ahluwalia’s are the statements of a ruling regime that has abandoned every last shadow of democratic practice.

To turn to the Planning Commission itself. In its description of its functions the Planning Commission has provided this information:

“The 1950 resolution setting up the Planning Commission outlined its functions as to: (a) Make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nation’s requirement; (b) Formulate a Plan for the most effective and balanced utilisation of country’s resources; (c) On a determination of priorities, define the stages in which the Plan should be carried out and propose the allocation of resources for the due completion of each stage;” [There are four other functions mentioned.]

Worryingly, what has been omitted is far more significant. What do these functions relate to? The answer can be found in the introduction to the First Five Year Plan:

“The Planning Commission was set up in March, 1950 by a Resolution of the Government of India which defined the scope of its work in the following terms:

‘The Constitution of India has guaranteed certain Fundamental Rights to the citizens of India and enunciated certain Directive Principles of State Policy, in particular, that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life, and shall direct its policy towards securing, among other things—

that the citizens, men and women equally, have the right to an adequate means of livelihood;
that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and
that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.’ “

Citizens, welfare, people, social and economic and political justice, control by the people of the material resources of India, the common good, no concentration of wealth, no means of production to the common detriment. These have now been hidden by the Planning Commission of today, shamefully. And it is from that base act of concealment that Montek Singh Ahluwalia speaks.

Countries awash with carbon

leave a comment »

Even though countries are burning unprecedented amounts of oil and gas, the estimates of how much is left continue to grow, thanks to high prices and new technologies that have enabled companies to find and extract new resources. Graphic: Nature

Even though countries are burning unprecedented amounts of oil and gas, the estimates of how much is left continue to grow, thanks to high prices and new technologies that have enabled companies to find and extract new resources. Graphic: Nature

More than ever, these charts by Nature, the science magazine, show, countries are providing themselves with energy from (what they continue to believe are abundant supplies of) fossil fuels.

“Renewables such as solar and wind power are growing faster than any other source of energy, but are barely making a dent in fossil-fuel consumption,” said the Nature text accompanying these graphics. “The scale of the challenge will only grow as the expanding global population requires more energy. This tour of global and regional energy trends makes clear that even with aggressive action to reduce energy consumption and curb emissions, fossil fuels will be around for a very long time.”

A decade ago, it was the tar sands of Canada and Venezuela. More recently, hydraulic-fracturing technologies have opened up oil and gas resources in the United States. Across the globe, proven oil and gas reserves are 60% higher today than they were in 1991. Graphic: Nature

A decade ago, it was the tar sands of Canada and Venezuela. More recently, hydraulic-fracturing technologies have opened up oil and gas resources in the United States. Across the globe, proven oil and gas reserves are 60% higher today than they were in 1991. Graphic: Nature

Nature also has a clickable guide to the world’s energy use which you can use to find out which countries were using up Earth’s resources fastest in 2011 (they’ve charted the numbers from the BP Statistical Review of World Energy 2012) and which ones were taking a lead on renewable energy.

At current consumption rates, fossil fuel reserves would last for about 60 years — and that could be extended by new discoveries and unconventional deposits. Coal reserves have not increased in size, but the supply will last for at least a century at current rates of consumption. Graphic: Nature

At current consumption rates, fossil fuel reserves would last for about 60 years — and that could be extended by new discoveries and unconventional deposits. Coal reserves have not increased in size, but the supply will last for at least a century at current rates of consumption. Graphic: Nature

Written by makanaka

December 10, 2012 at 12:59

We are stifled by growth greed, our air reeks of carbon dioxide

leave a comment »

An image from the Atlas of Health and Climate, a joint publication by the World Meteorological Organization and the World Health Organization: “Human health is profoundly affected by weather and climate. Extreme weather events kill tens of thousands of people every year and undermine the physical and psychological health of millions. Droughts directly affect nutrition and the incidence of diseases associated with malnutrition. Floods and cyclones can trigger outbreaks of infectious diseases and damage hospitals and other health infrastructure, overwhelming health services just when they are needed most.”

The World Meteorological Organization has said that the amount of greenhouse gases in the atmosphere reached a new record high in 2011. Between 1990 and 2011 there was a 30% increase in what the climate scientists call “radiative forcing” – the warming effect on our climate – because of carbon dioxide (CO2) and other heat-trapping long-lived gases.

Since the start of the industrial era in 1750, according to the WMO’s 2011 Greenhouse Gas Bulletin, about 375 billion tonnes of carbon have been released into the atmosphere as CO2, most of this from fossil fuel combustion.

Our stifling (and that of the flora and fauna with which we share our Earth, and who are victims as much as we are) is taking place because about half of this CO2 remains in the atmosphere (the rest gets absorbed by the oceans and biospheres, usually forests – which are being cut down at a fearsome rate – around the world).

Do they learn and listen? Not at all, as this report in The Guardian has just explained. More than 1,000 coal-fired power plants are being planned worldwide, new research by the World Resources Institute has revealed. The huge planned expansion comes despite warnings – such as this one from the WMO – that the planet’s fast-rising carbon emissions must peak within a few years if runaway climate change is to be avoided. Coal plants are the most polluting of all power stations and the World Resources Institute identified 1,200 coal plants in planning across 59 countries, with about three-quarters in China and India. The capacity of the new plants add up to 1,400GW to global greenhouse gas emissions. India is planning 455 new plants compared to 363 in China.

“These billions of tonnes of additional carbon dioxide in our atmosphere will remain there for centuries, causing our planet to warm further and impacting on all aspects of life on earth,” said WMO Secretary-General Michel Jarraud. “Future emissions will only compound the situation.”

This eighth WMO-Global Atmosphere Watch (GAW) Annual Bulletin reports on the atmospheric burdens and rates of change of the most important long-lived greenhouse gases (very unhelpfully acronymed as ‘LLGHGs’, which is rivalled perhaps in unwieldiness by ‘LULUCF’). These are carbon dioxide, methane, nitrous oxide, CFC-12 and CFC-11.

Radiative forcing, relative to 1750, of all the long-lived greenhouse gases. The NOAA Annual Greenhouse Gas Index (AGGI), which is indexed to 1 for the year 1990, is shown on the right axis. Chart: NOAA ESRL Global Monitoring Division

The three greenhouse gases we are most familiar with – carbon dioxide (CO2), methane (CH4)and nitrous oxide (N2O) – are closely linked to anthropogenic activities, and interact strongly with the biosphere and the oceans.

Predicting the evolution of the atmospheric content of greenhouse gases requires an understanding of their many sources, sinks and chemical transformations in the atmosphere. There we are helped by the NOAA’s (the USA’s National Oceanic and Atmospheric Administration) Annual Greenhouse Gas Indexin 2011 this index was 1.30, representing an increase in total radiative forcing by all long-lived greenhouse gases of 30% since 1990 and of 1.2% from 2010 to 2011. Read that again – more than one per cent from 2010 to 2011! What do the G20 governments and multinationals do not understand by these numbers? Are we to believe that the same people who design complex financial derivatives don’t get climate change math?

Written by makanaka

November 21, 2012 at 21:02

Energy, climate, growth, China, India – the World Energy Outlook 2012

leave a comment »

Inputs to the power sector to generate electricity accounted for 38% of global primary energy use in 2010, the single largest element of primary demand. In the New Policies Scenario, this share rises to 42% in 2035. Demand for electricity is pushed higher by population and economic growth, and by households and industries switching from traditional biomass, coal, oil and natural gas to electricity. The fuel mix within the power sector changes considerably, with low- and zero-carbon technologies becoming increasingly important. Graphic: IEA, WEO-2012

In four parts, 18 chapters, four annexes, illustrated by around 300 figures, the chapters supported by about 100 tables, a separate set of data upon which scenarios rest, the World Energy Outlook 2012 of the International Energy Agency (IEA) is a 690-page behemoth. I can only sketch its merest outline here, and in a fleeting way touch upon the knowledge and information it contains.

Drawing on the latest data and policy developments, the World Energy Outlook 2012 presents projections of energy trends through to 2035 and insights into what they mean for energy security, the environment and economic development. “Over the Outlook period, the interaction of many different factors will drive the evolution of energy markets,” said the WEO-2012. “As outcomes are hard to predict with accuracy, the report presents several different scenarios, which are differentiated primarily by their underlying assumptions about government policies.” We are told that the starting year of the scenarios is 2010, the latest year for which comprehensive historical energy data for all countries were available. What are these four scenarios?

Based on preliminary estimates, energy-related CO2 emissions reached a record 31.2 gigatonnes (Gt) in 2011, representing by far the largest source (around 60%) of global greenhouse-gas emissions (measured on a CO2-equivalent basis). Emissions continue to rise in the New Policies Scenario, putting the world on a path that is consistent with a long-term average global temperature increase of 3.6 °C above levels that prevailed at the start of the industrial era. Chart: IEA, WEO-2012

1. The New Policies Scenario – the report’s central scenario – takes into account broad policy commitments and plans that have already been implemented to address energy-related challenges as well as those that have been announced, even where the specific measures to implement these commitments have yet to be introduced.

2. To illustrate the outcome of our current course, if unchanged, the Current Policies Scenario embodies the effects of only those government policies and measures that had been enacted or adopted by mid-2012.

3. The basis of the 450 Scenario is different. Rather than being a projection based on past trends, modified by known policy actions, it deliberately selects a plausible energy pathway. The pathway chosen is consistent with actions having around a 50% chance of meeting the goal of limiting the global increase in average temperature to two degrees Celsius (2°C) in the long term, compared with pre-industrial levels.

4. The Efficient World Scenario has been developed especially for the World Energy Outlook 2012 (WEO-2012). It enables us to quantify the implications for the economy, the environment and energy security of a major step change in energy efficiency.

In the New Policies Scenario, global energy intensity (energy demand per unit of GDP) falls by 1.8% per year between 2010 and 2035. Between 2010 and 2035, energy intensity declines by an average of 37% and 49% in OECD and non-OECD countries respectively. Yet average energy intensity in non-OCED countries in 2035 of 0.16 tonnes of oil equivalent (toe) per thousand dollars of GDP is still more than twice the OECD level. Chart: IEA, WEO-2012

I have extracted five important messages from the summary which are connected to the subjects you find in this blog – food and agriculture, consumer behaviour and its impacts on our lives, the uses that scarce energy is put to, the uses that scarce water is put to, the ways in which governments and societies (very different, these two) view food, energy and water.

Five key messages:
“Energy efficiency can keep the door to 2°C open for just a bit longer.” Successive editions of the World Energy Outlook have shown that the climate goal of limiting warming to 2°C is becoming more difficult and more costly with each year that passes. The 450 Scenario examines the actions necessary to achieve this goal and finds that almost four-fifths of the CO2 emissions allowable by 2035 are already locked-in by existing power plants, factories, buildings, etc. No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal.

“Will coal remain a fuel of choice?” Coal has met nearly half of the rise in global energy demand over the last decade, growing faster even than total renewables. Whether coal demand carries on rising strongly or changes course will depend on the strength of policy measures that favour lower-emissions energy sources, the deployment of more efficient coal-burning technologies and, especially important in the longer term, CCS. The policy decisions carrying the most weight for the global coal balance will be taken in Beijing and New Delhi – China and India account for almost three-quarters of projected non-OECD coal demand growth (OECD coal use declines).

China makes a major contribution to the increase in primary demand for all fuels: oil (54%), coal (49%), natural gas (27%), nuclear power (57%) and renewables (14%). Its reliance on coal declines from 66% of the country’s primary energy use in 2010 to 51% in 2035. Energy use in India, which recently overtook Russia to become the world’s third-largest energy consumer, more than doubles over the Outlook period. India makes the second-largest contribution to the increase in global demand after China. Chart: IEA, WEO-2012

“If nuclear falls back, what takes its place?” The anticipated role of nuclear power has been scaled back as countries have reviewed policies in the wake of the 2011 accident at the Fukushima Daiichi nuclear power station. Japan and France have recently joined the countries with intentions to reduce their use of nuclear power, while its competitiveness in the United States and Canada is being challenged by relatively cheap natural gas. The report’s projections for growth in installed nuclear capacity are lower than in last year’s Outlook and, while nuclear output still grows in absolute terms (driven by expanded generation in China, Korea, India and Russia), its share in the global electricity mix falls slightly over time.

“A continuing focus on the goal of universal energy access.” Despite progress in the past year, nearly 1.3 billion people remain without access to electricity and 2.6 billion do not have access to clean cooking facilities. Ten countries – four in developing Asia and six in sub-Saharan Africa – account for two-thirds of those people without electricity and just three countries – India, China and Bangladesh – account for more than half of those without clean cooking facilities. The report presents an Energy Development Index (EDI) for 80 countries, to aid policy makers in tracking progress towards providing modern energy access. The EDI is a composite index that measures a country’s energy development at the household and community level.

“Energy is becoming a thirstier resource.” Water needs for energy production are set to grow at twice the rate of energy demand. The report estimates that water withdrawals for energy production in 2010 were 583 billion cubic metres (bcm). Of that, water consumption – the volume withdrawn but not returned to its source – was 66 bcm. The projected rise in water consumption of 85% over the period to 2035 reflects a move towards more water-intensive power generation and expanding output of biofuels.

Such is the barest glimpse of the WEO-2012. There are a number of aspects of the Outlook which deserve more scrutiny with a view to learning energy use and misuse, and this will be expanded upon in the weeks ahead.

The stranglehold of finance capital over the state

with one comment

Women collect coal scraps from an overburden dump for a nearby open pit coal mine. Overburden is the fertile soil (formerly used for agriculture) that has to be removed to get at the coal underneath. In the process small pieces of coal are also picked up which are scavenged by local villagers to be sold for cash. Photo: Panos Pictures/Robert Wallis

Is ours the age of the struggle between the state and the market? Or is it the age in which the state bowed to financial control over it? From a perspective which integrates labour, environmental stewardship, cultural safeguarding and a just human development, the state is firmly in the grip of finance and its liberalisers.

What has come to be called neo-liberalism is in short the expression used to describe the relentless and growing control of resources of every sort, be they mineral, human or environmental. If there has been a problem of neoliberalism it is that it failed to increase the rate of profit consistently and never achieved levels comparable to those of the ‘Golden Age’ between 1948 and 1973. The series of ‘booms’ of various kinds, which caught the attention of investors, bankers and speculators, have had much to do with the seeking to replicate the conditions of those years (in Deutschland they called the period ‘die Fette Jahre’, the fat years).

Boys carry large lumps of coal that they have scavenged from an open pit mine near Dhanbhad. They will carry this coal several kilometres to sell in a local market. As mining has displaced agriculture, scavenging for coal on the edge of mines has become one of the means of survival for those who have been displaced from an agricultural life by mining. Photo: Panos Pictures/Robert Wallis

The essence of financial liberalisation, seen in its totality, is to ensure the stranglehold of finance capital over the State, Prabhat Patnaik has explained in a commentary in People’s Democracy (the weekly organ of the Communist Party of India Marxist). This may appear paradoxical at first sight: as the term ‘liberalisation’ appended to ‘financial’ suggests, the basic aim of the process is to liberate finance from the shackles of the State, ie, to ensure not the control of finance over the State but the negation of the control of the State over finance. But the remarkable aspect of financial liberalisation consists precisely in this: what appears at first sight as the liberation of finance from the shackles of the State is nothing else but the acquisition by finance of control over the State.

In his short essay, ‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson has explained that these booms were the result of the following factors which he enumerates as under:

The first and most fundamental was simply greater exploitation of the workforce, by increasing productivity on the one hand (making fewer workers work harder and longer) and decreasing the share of income going to labour on the other (paying workers less in real terms).

The second was the expansion of private capital into two new areas: first through the expropriation of the remaining ‘commons’ in the Global South, releasing value which had previously been embedded in nature and hence unavailable for the purposes of accumulation; then through privatising state-owned industries and public services, providing resources which-potentially at least-could be used directly for production rather than in the process of realisation or as part of the social wage.

The third was the emergence of new centres of capital accumulation outside the established core of the world system in East Asia and above all, in China, which contributed to a partial restoration of profitability as a manufacturer of cheap consumer goods for Western and, above all, US import markets, and as the source of loans to the US through Treasury Bonds, which are then loaned again to American companies and consumers.

The fourth, itself a result of profit rates failing to consistently reach what capitalists considered acceptable levels, was a fall in the proportion of surplus value being invested in production and the rise in the proportion being saved, to the point where the latter became greater than the former. The need to find profitable uses for surplus capital, where productive investment was insufficiently attractive, tended to draw industrial capitalists towards financial speculation. This did not mean that industrial capital became subordinated to financial capital – rather, their interests converged.

A series of murals painted by the Tribal Women's Artist Collective from Hazaribagh. The collective attempts to keep tribal artistic traditions alive in the face of population displacement from tribal areas due to the spread of mining and the conflict between the India army and Maoist guerillas. The designs and styles are unique to each individual artist and were traditionally passed down from mothers to daughters through the generations. Photo: Panos Pictures/Robert Wallis

The turn to finance had implications beyond a shifting focus of investment, which tends to be compressed into the term ‘financialisation’. But among all the complexities of arbitrage, derivatives, hedge funds and the rest, there are two essential points about financialisation which need to be understood. One is that, financial speculation, like several of the factors discussed here, can increase the profits of individual capitalists at the expense of others, but cannot create new value for the system as a whole. The other is that, in so far as profits were raised, one aspect of financialisation became more important than any other and consequently needs to be considered as a factor in its own right.

This, the fifth and final factor, was a massive increase in consumer debt. Credit became crucially important in preventing the return to crisis only after the post-1982 recovery had exhausted itself. In so far as better-off working class people have spent borrowed money on commodities which are above the minimum needed to reproduce their labour, it is a response to their situation under neoliberalism. But the main reason for increased debt has been the need to maintain personal or familial income levels.

Men transporting baskets of coal onto railway carriages at Sauanda railway yard. Most of the workers have migrated to work in the area having been displaced from their traditional livelihoods in the countryside. Lacking title deeds for land on which they have farmed and hunted for millennia, the rural adivasi communities are being displaced to make way for new industrial developments planned to capitalise on the land's mineral wealth. Photo: Panos Pictures/Robert Wallis

The points that Patnaik, Davidson and several others have been making, with increasing urgency in recent years, is that the freeing of finance capital from all social obligations like priority sector lending targets and differential interest rates, not only increases its profitability, even while pushing petty producers and small capitalists deeper into crisis, but also allows it to pursue its own profit-seeking ways over a global terrain, which has the effect of subjugating the State to the thralldom of internationalised finance capital.

In short, financial liberalisation is the process through which a fundamental change is enforced on the bourgeois State: from being an entity apparently standing above society and intervening for the ‘social good’, which means keeping in check to some extent the rapacity of big capital, even while promoting it and defending its monopoly privileges, the State becomes exclusively dominated by financial interests (with which big corporate interests are closely enmeshed) and loses its relative autonomy vis-a-vis such interests. We have not the ‘rolling back’ of the State as neo-liberal ideologues suggest, but State intervention in the exclusive interests of finance capital.

[‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson, Senior Research Fellow at the University of Strathclyde and a member of the Editorial Board of the journal International Socialism.]