Price-fixing carbon junkies and tar sand pancakes


30 May 2013


The last weeks have been very interesting in climate news revealing not only the current state of our skyrocketing CO2 emissions, but also the lengths that banks, multinational companies, and governments will go to make profit from wrecking the planet.

Without reading the news some people may be in doubt about what role carbon capital is playing in driving an ever faster extraction of fossil fuels and propelling climate change. But follow recent developments and there will be little room for doubt about the significance of the dirty web of finance between financial institutions, fossil fuel multinationals, and governments.

The 400 ppm threshold
First of all it was announced a week ago that the levels of CO2 in the Earth’s atmosphere have passed 400ppm. This is a steep increase from the 280 ppm pre-industrialisation CO2 levels and the highest concentration of CO2 in the atmosphere in several million years. This is one reason why this news is significant. Another reason is the consequences that the rising concentration of CO2 has on the climate. You may have heard about 350.org, an organisation that has taken its name from what is deemed the maximum ‘safe’ concentration of CO2 in the atmosphere.

So, we have now moved well beyond ‘safe’ levels of CO2. 400ppm is ultimately just a symbolic threshold, but if the current exponential growth in CO2 emissions continues, the results will be catastrophic. The resulting changes in the climate are likely to make agriculture fail on entire continents and make hundreds of millions homeless.

Drastic changes to our way of living are increasingly urgent if we want to prevent climatic catastrophes. But unfortunately nothing seems to be changing anytime soon. One of the main reasons for this is carbon capital.

Our future? Cerrejon, South America's biggest coal mine

The “next generation” of oil, not people
Right now British banks are pouring billions of pounds into dirty fossil fuel projects around the globe that are displacing entire villages and destroying the climate while providing little benefit to people locally. UK finance thus plays a central role in bringing fossil fuel excavation ever further and pumping ever larger amounts of CO2 into the atmosphere while securing a continuous flow of money into the pockets of unscrupulous speculators.

So it is no surprise that Shell has announced that it is going ahead with making the world’s deepest oil well in the Gulf of Mexico. Part of what it calls the “next generation” for oil deep-water developments. It seems fair to ask how this “next generation” of oil will benefit the next generations of people.

Carbon Junkies - Providing your daily fix of price-fixed oil
A big news story of the past weeks has been the price-fixing by oil giants BP, Shell, and Statoil. Put simply it is a case of libor rate scandal meets oil multinationals. The oil price scandal is revealing how these companies are making fortunes on the absence of regulation and using them to take fossil fuel production further and further. In a ‘nutShell’ the oil multinationals have exploited our dependency of fossil fuels to increase their capital earnings – capital which then will enable them to bring production to new highs (or depths) and further increase our dependency. And so the ‘game’ of carbon capital continues. A game of dirty money from not only financial institutions, but also from big carbon multinationals where rules are few and the only goal is profit, no matter the consequences.

Tar sand mining in Canada (Photo by Colin Baines)

A bit of tar sand on your pancake, dear?
But criticism of the system is on the rise. This is reflected by reactions from governments – the third party in the webs of carbon capital. WDM has previously revealed how closely the current UK cabinet is linked with both the finance and the fossil fuel sectors.

But this is not only a UK phenomenon. During the last year, Canada has nearly doubled its spending on advertising to promote its tar sand production. Where Canada has gained much popularity for its maple syrup production, its tar sand excavation is going down less well with people’s morning pancakes. And not without reason. The Alberta tar sands mining in Canada is nothing less than the world’s largest and most destructive industrial project. By far! If all the tar sands are excavated, it would emit more than twice as much CO2 as has been emitted so far in human history.

The “drill first, ask later” logic
So this is carbon capital. A dirty web of finance involving banks, oil multinationals, and governments and driven by a drill first, ask later logic. And from reading the latest news, this much is clear. What needs fixing is the current economic system – not oil prices. If we want to beat our addiction to increasingly expensive oil-fixes, we need to turn the whole financial system around. 

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