Recessions are a Second Chance to Divest

Did you know that fossil fuels in the US are subsidized? The reason for this is that the domestic American fossil fuel market was once young and unstable, though since then it has ballooned into a mature, lucrative business. The federal government’s financial support of coal, oil, and natural gas guaranteed cheap and plentiful energy in those early years. But now that we have realized the harms caused by fossil fuels and harnessed affordable and limitless energy from the wind and sun, we can (and should) wean ourselves off of the Earth’s finite resources of fossil fuel. Economic recessions are a great time for governments to divest in fossil fuels and reinvest that money into renewable energy, and in this article I’ll tell you how.

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Much like we have seen during the coronavirus pandemic, when people stop spending, industries stop pushing out products and the fossil-fuel industry loses customers. Although a halt in emissions results in a temporary display of clear skies and beautiful city-scapes that were covered in smog just weeks before, fossil fuel industries are quickly bailed out and continue to release chemicals into the atmosphere (sometimes at an even higher rate than before) immediately following an economic recession.

Despite significant financial support from the government, the profitability of US oil companies is not what it once was due to over-production. From 2005 to 2014, the net debt of North American exploration & production companies increased by a whopping 250 percent, while cash flow increased by a mere 68 percent. Low-wage workers laid off by the oil and gas industries need government support during times of economic hardship such as these, but as this article stresses, the country’s emergency funds should not be wasted on an already-failing industry or their bosses.

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The decline of fossil fuel industries should serve as a natural transition into other more reliable energy sources that won’t risk biodiversity or public health. Why are we desperately throwing public funds at a dying market, when we could be building a sustainable future while we have the chance?

The Past

Imagine if the Obama Administration had been willing to construct a new economy on the back of the Great Recession of 2008. Naomi Klein writes in her book This Changes Everything, “The stimulus package could have been used to build the best public transit systems and smart grids in the world. The auto industry could have been dramatically reengineered so that its factories built the machinery to power that transition – not just a few token electric cars (though those too) but also vast streetcar and high-speed rail systems across an underserved nation.”

photo of railway on mountain near houses
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Bailed-out banks could have been required to give loans to credible factories switching from dirty to clean energy production, or face nationalization. Other auto-industry factory owners could have turned their plants into cooperatives producing a wide range of domestic products.

The Dream

Ontario’s Green Energy and Green Economy Act of 2009 was a climate action plan described as “the most comprehensive renewable energy policy entered anywhere around the world” by Michael T. Eckhart, then president of the American Council On Renewable Energy. Energy experts from around the globe hailed the act of legislation which aimed to completely withdraw Canada’s most populous province from the claws of coal. Here’s what the plan was:

  • Enable renewable energy businesses to sell leftover power back to the electric grid, providing them with long-term contracts at a guaranteed premium price
  • Promote a range of business types, including not just large companies but also local municipalities, co-ops, and Indigenous communities
  • Verify that businesses are supporting the local economy by hiring and purchasing a fixed percentage of equipment from within the region
alternative alternative energy clouds eco energy
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The act helped to create over 31,000 jobs in renewable energy. Renewable energy factories were able to use existing abandoned infrastructure from the auto-parts industry to build panels. Much of the workforce came from the auto industry as well. It seemed like a dream, until everyone woke up to the harsh reality of global trade deals. As soon as solar and wind manufacturers moved in, they were moving out. Canada’s attempt to strengthen its local economy and become independent from coal was inhibited primarily by the World Trade Organization (WTO) of which it has been a member since 1995. The WTO found Ontario’s policy which favored local products to be discriminatory against products made in other nations. The act was repealed, and Canada was allowed to continue participating in free trade, which is a driver of the climate crisis we are in today.

“For centuries world trade has increased not only environmental degradation but also global inequality. The expanding ecological footprints of affluent people are unjust as well as unsustainable. The concepts developed in wealthier nations to celebrate ‘growth’ and ‘progress’ obscure the net transfers of labour time and natural resources between richer and poorer parts of the world” – Alf Hornborg, Professor of Human Ecology, Lund University

Now is our chance to gain independence from the fossil fuel industry, and to look forward to better managed, sustainable alternatives. If I haven’t convinced you yet, maybe I will another day, because I’m emotionally drained by the lack of action from our leaders that the US (and the world) critically needs. Click on any of the underlined links to learn more. Have a great weekend! Sincerely, The Green Goddess 🙂

3 Comments

  1. Jean-Jacques @ Gypsy Café

    Very good article, thanks – I think there is, however, also a lack of support and action from people in general. Even although many people support the idea of a stransition to renewables and more sustainable living theoretically (the sentiment of it) in practice there’s great resistence to a lower quality of life and that resistence is presentl still more powerfull than the actual will to transition voluntarily. These were my conclusions when I analysed this a while back detailed it in an article called: “There are no Limits to Growth” (which refers to human developement rather than fossile fuel driven material growth). Humanity needs to go through a mind-shift, but it needs to be voluntary, not against its will. The present situation is not necessarily voluntary … and people rarely do somethig against their will, although at the very least the current circimstances will bring people to think more about these issues and some may indeed be forced to make some changes due to personal economic demands – and perhaps they will adapt. Most likely as the crisis deepends economically people will embrace a renewable future more and more, but … (there’s always a but) they would have to be prepared to let go of their obsessions with technology. It is exactly the demand for technological solutions that’s driving the reliance upon fossil fuels. This is the uncomfortable tuth. We cannot have our cake and eat it in the long run. So, a return to a real organic lifestyle is required – sans uber-high-tech at the same time.

    Liked by 1 person

    1. Jess T.

      That is an interesting viewpoint, Jean-Jacques. However, I have to disagree with you that people are unwilling to make sacrifices for the planet. At this point, the majority of people in the United States see climate change as a crisis and believe that our political leaders are not doing enough to address the issue. The middle class wants change and is willing to go the distance – but the burden should not be on us to make the largest cutbacks. Our leaders, and the wealthy and extremely wealthy, are the ones obsessed with profits and extractivism. I would like to know from everyone who read this blog post – would you be willing to make cutbacks for global environmental health? What if environmental policies to limit pollution by massive industries were put in place first? What if the extremely wealthy paid taxes? What if the government invested more taxpayer dollars into public transportation, health-care, and education? I think the American public is weary, rather than unwilling. We are so tired of asking for change that we’ve just turned belly-up. We want our country to participate in global environmental summits, become less reliant on fossil fuel energy, etc. Leadership just doesn’t serve us anymore.

      Liked by 1 person

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