Private sector led “Green Growth”

According to the “Green Growth Strategy for Northern Ireland” (October 2021), delivering change to a green growth society, “will require significant long term investment - by government, by the private sector and by individuals”. The Green Growth NI scenario document states that “investment rising to around £1.3 billion annually from 2030 will be needed in Northern Ireland to meet our 2050 emissions targets in their ‘Balanced Pathway’ scenario. The majority is expected to come from the private sector.” The strategy paper naïvely states that “large corporations are also committed to real change to drive climate action”. Large corporations are, in fact, committed only to maximising profit, and the continuing growth of greenhouse gas emissions is proof of this. Exhibiting the usual ‘we’re all in this together’ ideology, Michelle O’Neill has said that “the Green Growth Strategy is seeking to adopt a holistic approach to tackling the climate crisis in the right way by balancing climate action with the environment and the economy in a way that benefits all our people.”

The Workers Party rejects the notion that the development of climate policy based on price signals provided through the cap-and-trade systems operating in these islands and beyond produces results which are adequate to the climate emergency that we find ourselves in. The global flagship emissions trading system (ETS), the EU ETS, covers roughly 45% of the EU’s economy, amounting to around 4% of the world’s GHGs. Although it has been 19 years since the 2005 launch of the EU ETS, and there are now other ETS systems operating around the world (mostly in rich countries), the vast majority of global emissions (77%) are still not priced at all in 2024, and the share of emissions that are priced highly enough to be potentially effective is below 1%.[4] 

In addition, to the (limited) extent that ETSs incentivise energy efficiency, they do so within a capitalist system in which firms must grow to survive. As the International Energy Agency notes, “strengthening of the European Union Emissions Trading Scheme is projected to lead to larger savings from energy- intensive industries in 2030 than previously projected, though much of this is outweighed by higher projections for industrial activity”. [5] [our emphasis] This cannot be solved within the current political-economic system.

In their review of academic papers dealing with the ex-post evidence of the effectiveness of ET schemes, Jessica Green and Raúl Salas Reyes found that “the majority of studies suggest that the aggregate reductions from carbon pricing on emissions are limited—generally between 0% and 2% per year”. For comparison, the IPCC states that emissions must fall by 45% below 2010 levels by 2030 in order to limit warming to 1.5 ◦C—the goal set by the Paris Agreement. Green and Salas Reyes note that “it is not at all evident that limited political capital should be spent on carbon pricing when other efforts at mitigation may offer more reductions”.[6]

According to the Climate Change (No. 2) Bill, the Stormont government will set an overall emissions target of net-zero carbon dioxide (CO2) position by 2050 as part of the overall 82% reduction in GHGs. But can these ambitious targets be met using the prescribed methods? Regardless of the sincerity of the parties involved, reduction targets for GHGs have been set and missed by governments for several decades now. We note that in May 2024 members of the parliamentary Northern Ireland Affairs Committee cast doubt on the ability of the Northern Ireland Executive to hit its renewable energy and net zero targets, arguing there is currently inadequate infrastructure to support energy transition, an unsupportive policy environment, and a lack of consumer awareness. The Workers Party believes that the problems are much more fundamental: market mechanisms have been shown to be insufficient to introduce renewables-based economies at the speed and scale required and the stakes are too high to allow for the continuation of failed policies.

If similar schemes are a reliable yardstick, the Contract for Difference (CfD) auction, a subsidised incentive for private-sector renewables providers due to be rolled at by the NI Executive in 2025 is likely to prove unsuccessful. A similar scheme in the Irish Republic (the RESS) has proven less than efficient because private renewables companies are only prepared to enter the market if their investments are ‘de-risked’ by public subsidies. As the think-tank, Trade Unions for Energy Democracy notes, “the dogmatic defence of market competition and private profit above all else has resulted in an ever-deepening crisis of underinvestment and a series of technical problems that have yet to be solved. … [T]he ‘invisible hand’ of the market will never achieve the global energy transition we need, because doing so would threaten the profitability of private actors that have become too big to fail”. [7]

The Workers Party believes that only public ownership and planning is sufficient in scope, direction, and speed of action to deal with the global climate emergency. We call for energy, infrastructure, and transport to be taken immediately into public ownership. If this doesn’t happen, the continued application of market mechanisms and government-led pricing schemes will make some ‘green entrepreneurs’ rich. Meanwhile the amount of GHGs going into the atmosphere will be an ongoing recipe for climate disaster.