Debt and Destruction
Karimah Ashadu, Plateau, film still, 2021. Courtesy of the artist and Fondazione In Between Art Film. | Find out more
BEYOND THE WAR/
BEYOND THE WAR/
Debt and Destruction
Thea Riofrancos on the Global Economic Order
What is the lesson of the war in Ukraine for the future of energy?
We are at a very contradictory moment in the energy transition: On the one hand, there is progress towards a more renewable energy, even though it is extremely uneven in geographic terms. And it is also much too slow in climate science terms. On the other hand, the political, economic, social, even cultural power of the fossil fuel industry which is a persistent obstacle to the energy transition. And with every crisis, like the war in Ukraine, the fossil fuel industry is perceived as coming to save the day.
In this case: Reducing the dependency on Russian oil by expanding drilling and production.
The fact is: The demand for fossil fuels continues to increase, the extraction of fossil fuels continues to increase – and the production of renewable energy increases. The overall demand for energy is growing. One consequence is that we have the side-by-side economic and political power of two different fractions of capital – fossil capital, which is a huge fraction and the incumbent, and green capital, which is in a lot of ways the vanguard. It is important to understand the relationship between these distinct fractions of capital and the state.
Debt reproduces poverty at all scales and is itself a driver of environmental destruction and climate change.
What is the role of the state in this?
Both fossil capital and green capital are very state dependent. Fossil capitalism receives an extraordinary amount of state subsidies, both on the supply and the demand side – tax breaks or deregulation or building highways. Fossil capital could not exist without the state. There is also the role is has played in obstructing any kind of climate change action and specifically in obstructing the development of renewable energy which fossil capitalists mostly see as an existential threat – notwithstanding the fact that some oil majors are themselves diversifying into renewable energy.
How is green capital dependent on the state?
Again, tax breaks and subsidies are very useful for the new renewable energy industry. But they are also dependent on the state in a different way – the overall policy environment, pushing for an intentional energy transition, politically conscious, coordinated, and fast. The state is the only entity that can really enable that.
Can a green transition also lead to a more democratic economy – more holistic, meaningful, beyond green capitalism?
There are a lot of interesting models of worker ownership, public sector ownership, community ownership, of public and industrial policy. These models might result in a more democratic energy system and therefore a more democratic economy. But the question really is: How do we get there? This is difficult to answer – and speaks to the contradictory position that the left finds itself vis-à-vis green capitalism.
When the question is: Should the state continue to subsidize fossil fuel or should it actively encourage, financially and regulatorily, renewable energy production and consumption? – then the more establishment or institutional parts of the left are on the same side as the owner of a solar company. But other parts of the left don't just want an energy transition – we want a transition that fundamentally changes the patterns of ownership and distribution of wealth and addresses the problem of who pays the social and economic costs of this environmental crisis.
You come from an internationalist tradition of the left – how is the Green New Deal that you and other propose connected to that internationalist vision?
The global economic infrastructure automatically gives any Green New Deal an international dimension – for example when it comes to supply chains and global production networks that underlie an energy transition in any one place. So we need in many ways to move beyond the nation-state and build alliances and coalitions that are transnational or global in scope – or, for that matter, regional or trans-local, connecting cities, like the radical municipalism movement in Europe.
What is what you call “supply chain justice”?
The Covid pandemic really only accelerated the geopolitical crisis and has brought supply chains to the fore of policy conversations. Which is good. For decades, they were kind of invisible, in an attempt to de-politicize globalization. But the structure of the global economy effect everybody and they are extremely unequal. And the supply chains of green technology for example illustrate the inequalities that are at the heart of the energy transition.
Anything that we need for a green transition, whether it is a solar panel, a lithium battery, or a wind turbine, is made in the same way that everything is made under capitalism. There are spatially dispersed supply chains, very fragmented from one another, and at each node you have the preexisting economic hierarchy of the world order – which is to say the most difficult manual labor and the most toxic forms of resource extraction, refining and processing.
Deep debt reinforces extractivism as an economic model throughout the Global South. It is a major obstacle to anything like economic equality globally.
What is the consequence?
I think that on the left, we realize that global supply chains don't just produce goods – they produce and reproduce deep forms of social and economic inequality. But things can be done right. These supply chains were constructed with certain goals in mind: profitability, the quick turnover of goods, political power. And they can be remade, piece by piece, with different pressure points – maybe taking advantage of the fact that supply chains span borders, thinking about how we can open up forms of leverage and alliances that also span borders.
This could be the source for a new internationalist movement.
But there is a difficult set of questions for the left: What about the valid and valiant protests at mine sites for lithium, cobalt, nickel, copper – when those materials are needed for an energy transition that the left supports? This is an important dilemma that we should confront head on. We should think very concretely how much of each of these materials is really needed for a democratic energy transition which is very different from the unjust energy transition that is unfolding.
You did extensive research in on this topic, more recently in Chile and from 2007 to 2017 in Ecuador. What did you find out?
Ecuador found itself at that time at the intersection of two processes: It had a left-wing government – and there was a global commodity boom driven in large part by China's rapid industrialization. This government – which came to power with the promise to end neoliberalism by increasing social spending public infrastructure and public investment – was paradoxically able to fulfill many of those promises because of the historically high prices for some of Ecuador’s key exports, like oil and minerals.
In your book “Resource Radicals”, you describe how this led to protests by some of the key constituencies of this government by President Correa – indigenous movements, peasant movements, environmentalist.
The situation became increasingly polarized, but there developed also a very fascinating and intellectually stimulating debate between two different leftist approaches to resource extraction: The classic approach is indebted to dependency theory and Third World Marxism. The solution here is for the state to get more involved, in some cases outright state ownership, in other cases public policies that try to get from oil to more value-added sectors. This really split the left and continues to affect possibilities of left unity in Ecuador.
You mention in your writing the Bandung conference in the 1950s as an example of a brief opening to create a more equal world. Can you explain this – also in the context of the war in Ukraine and the question of a post-war order?
There is renewed talk of a non-aligned movement. Russia's invasion of Ukraine had a huge geopolitical fallout, and a lot of countries did not want to take sides, they just were not on board with the sanctions. There is a hesitancy on the part of Global South governments to something that could be turned against them potentially. Unfortunately, the explicit political and economic arguments that attended the period from the mid-fifties through the seventies – the collaboration between Third World governments to create the architecture of a more just economic order.
What would be the cornerstones of such an economic order?
The first step is debt cancellation. The amount of debt is a major barrier to economic development throughout the Global South. It reproduces poverty at all scales and is itself a driver of environmental destruction and climate change. If you are a deeply indebted country in Latin America, the Caribbean or Africa, your government is constantly having to think about how we are servicing our debt. In many of these cases an important part comes from the rent gained from extractive sectors.
What is the consequence of this?
This deep debt reinforces extractivism as an economic model throughout the Global South. It is a major obstacle to anything like economic equality globally. And the institutions that uphold this system of debt, the IMF, the WTO or the World Bank, are governed by rules that reflect the power structures of the global economy and give more votes and decision-making power to the governments of the Global North. It is one unfairness layered on another unfairness.
Thea Riofrancos is an Associate Professor of Political Science at Providence College, an Andrew Carnegie Fellow (2020-2022), and a member of the Climate + Community Project. Her research focuses on resource extraction, renewable energy, climate change, green technology, social movements, and the left in Latin America. These themes are explored in her books, most recently “Resource Radicals: From Petro-Nationalism to Post-Extractivism in Ecuador” (Duke University Press, 2020).
Questions by Georg Diez
The paperless workers in the tin mines of the Jos Plateau and the socio-economic impact of their activities are the focus of Karimah Ashadu’s videowork called Plateau. Before Nigeria's independence, the plateau was an important site for mining minerals such as tin and columbite. The British colonial regime at the time exploited the area, with tin mining developing into a full-blown industry that peaked in the 1940s. After the International Tin Agreement expired in 1985, the market collapsed, mines closed and workers were laid off. Those who had acquired the skills and knowledge of mining formed small communities and began to mine the land for mineral deposits, finding their way to autonomy.