These are the notes for a recent speech at my local Constituency Labour Party. The title and the quote at the beginning is from Jason Hickel, who is the Energy editor at the Financial Times; so has something of a horses mouth quality to it.
“There’s too much to do and, given the urgency and the need to get the solutions right, this isn’t a task for your favourite ESG focussed portfolio manager, or the tech bros. The sheer scale of the physical infrastructure that must be revamped, demolished or replaced is almost beyond comprehension. Governments, not Blackrock, will have to lead this new Marshall Plan. And keep doing it. The Western nations that did so much of the damage will have to finance the transition in the developing world – it is astonishing that this is still debated. Massive deficit funding will be necessary.(my emphasis)
For all the clean tech advances and renewable deployment in recent decades, fossil fuels share of global energy use was 86% in 2000, and 82% last year.”
The scale of the challenge
According to Adam Tooze we need to be investing $4 Trillion per year in energy transition.
Others have argued as much as $6.5 Trillion per year
As the world economy is roughly $100 Trillion a year, between 4 and 6% of it needs to be invested in the transition.
A large sum, but to put it in context, last year (2022) subsidies for fossil fuels amounted to $7 Trillion and Fossil fuel profits were $4Trillion.
This is an opportunity – because there’s your magic money tree…but also a problem, because fossil fuels are so entrenched in everyday life and political power.
Fossil fuel companies have known about the effect of greenhouse gases for 60 years, and have reacted in the same way as the tobacco and asbestos companies did over the links between their products and cancer.
Even now, Shell is arguing that – to be compatible with their interests – Net Zero will only be achievable some time in the 22nd century (so between 50 and 100 years too late).
This entrenchment in political power is seen in Sunak’s latest announcements and more structurally in the high level of climate denial in the US Congress – where Senators and Congresspeople are bought up by FF companies. Showing once again that the USA is the best democracy money can buy.
This leads to a mind boggling level of cognitive dissonance. In 2019 the US military produced a report which stated that the impact of climate breakdown would lead not only to states collapsing around the world, but also that extreme weather events in the US itself would lead to infrastructure and civil society collapsing to a degree that they would expect to be called in to fulfil para state roles, before collapsing themselves from the overstretch that would impose. At the same time, they projected a need to be ready to intervene as the Arctic ice melts, to make sure that the US gets its customary lion’s share of the fossil fuel resources revealed under the ice; thereby helping fuel the collapse that they predict.
Which brings us to a related problem. The ratio of military to green transition spending. In the US, for every $1 allocated to green transition via the Inflation Reduction Act, they are currently spending $18 on their military. And this will get worse as the US and its allies, already responsible for two thirds of global military spending, are sharply increasing it.
The figures on this for China might surprise you. For every $1 they spend on their military, they spend $2 on green transition.
This means two things
- A shift from military to green transition spending is an urgent task for the climate and labour movement globally – and therefore the Atlanticist foreign policy framework of the current Labour leadership is as wrong as it can be – and will be thrown into complete crisis should Donald Trump be re-elected next year (which is highly possible).
- Countries that see themselves as Socialist are more part of the solution than they are given credit for. The one relatively developed country that the UN considers operates on sustainable lines is… Cuba.
Going back to Tooze to underline this point.
$4Trillion per year needed for energy transition.
Last year, $1.7 Trillion invested in renewable energy, but $1 Trillion was invested in fossil fuels. So, the net gain of 700 billion amounts to about 20% of what we need to be doing. Another way of looking at this is that we need to be doing five times as much as we are at the moment.
According to Tooze, China is the only country investing at anything like the scale and pace we need.
This is underlined by the International Energy Agency that reports that last year China invested 70% more in the transition than the USA and EU put together. And next year the projections are that their investment will be double that of the US and EU combined.
Specifically, in 2024, China is projected to account for
50% of global solar installations
60% of new onshore wind
70% of new offshore wind.
Labour’s projected £28 billion a year would get us up to US or EU levels; so about half of where we need to be.
This week the IEA put out an updated road map to Net Zero and keeping under a 1.%C increase.
Their essential point is that this is still possible, but only if advance (rich) countries in particular up their targets and ambitions – the opposite of what Sunak has done this week – with an enhanced target of 2045 for Net Zero. No new oil and gas is a bottom line.
To have any chance of getting to that £28 billion, what we need is Just transition bodies with union and community involvement at every level in every sector – so plans for investment – and community mobilisation around them – can be made. This transition can’t happen as a “trickle down” process. It has to be forced up, and the unions in particular will need to take the lead on this, not react defensively.

