October newsletter editorial: Decarbonisation is not deindustrialisation

At Carbon Market Watch, we seek to decarbonise society, not to deindustrialise it, out of a conviction that our future prosperity depends on our ability to live within the planet’s limits, for the good of society, for the good of nature and, ultimately, for the long-term good of businesses themselves.

An abandoned steel mill in Charleroi.
Image: Miriam Vicente Marcos, CMW

We went on a tour of Belgium’s “ugliest city” on day one of our team retreat, taking in industrial wasteland and ruins. Charleroi is an example of deindustrialisation gone awry. According to our tour guide, “Le grand capital” (the big capitalists) came, exploited and moved on. Replacement industries, such as waste sorting, offer much less employment. The politics of the place is complicated, as is the harsh socioeconomic reality. 

What the case of Charleroi, once one of the richest (and most polluted) urban areas in Europe, reminded us of though is that when we argue for the decarbonisation of energy-intensive industries, we sometimes face accusations of wanting to risk the deindustrialisation of Europe.

But where’s the evidence that carbon pricing is the key factor which undermines the viability of energy-intensive industries? The collapse of Charleroi largely  predated the EU’s climate policies. The companies which did close down more recently never had to pay a cent for their carbon pollution (and even made vast windfall profits on the back of the EU ETS) There are, after all, much bigger factors at play in decisions about new investment in industrial installations or their relocation outside the EU – demand in emerging markets, subsidies, labour cost, supply of raw materials, etc. – which make the carbon price component pale in comparison.  

At Carbon Market Watch, we seek to decarbonise society, not to deindustrialise it, out of a conviction that our future prosperity depends on our ability to live within the planet’s limits, for the good of society, for the good of nature and, ultimately, for the long-term good of businesses themselves. And that transition needs to be just, since ultimately ‘there will be no jobs on a dead planet,’ as the trade union slogan goes. 

Our advocacy focuses on making the ETS a tool to support the green transition of energy-intensive industries by ensuring that the carbon price is actually paid and using the proceeds to provide targeted support to a just industrial transition.

Low-cost pollution

The ETS in its current form is not yet up to the task. The exemptions to the cost of pollution it allows fundamentally undermine the incentives for the transition. The system for determining the free allocation of pollution permits effectively props up the production processes of yesteryear rather than supporting the roll-out of the clean production processes of the future. In the context of the current energy crunch, the future ETS should be designed as a solution to tackle sky-rocketing energy prices by helping industries to move away from fossil fuels, tackle the climate crisis and to anchor our prosperity in sustainability.

Europe’s scramble for energy security, with the re-routing of trade flows and new infrastructure it entails, threatens to lock in our reliance on fossil fuels longer than is climate-responsible. What it also sidelines is the need to scale back or eliminate harmful industries by reducing demand for their outputs, developing alternatives and enhancing circularity. De-growing these industries would not amount to de-industrialisation either. It would take us to a level of production which is adapted to moderated need for high-quality, sustainable products rather than throwaway overconsumption and wastefulness currently dominating the system. If such de-growth were to happen by design and be properly planned for, it would not create new Charlerois and not be tantamount to economic recession, but lead to a new kind of prosperity. This better future is clear in its broad strokes. We urgently need political and business leadership to fill in the necessary planning details.

At Carbon Market Watch we don’t define our success with growth of the organisation – nor growth for growth’s sake. Yet we will be welcoming three new team members over the next few months. This is the result of a demand we have not created and a demand we would like to eventually disappear – the demand for good advocacy to ensure that carbon pricing and other climate policies to cut pollution and drive a just transition towards zero-carbon societies.

Read the October edition of our newsletter or subscribe here

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