Overshoot is a brilliant book in many ways. Andreas Malm and Wim Carton aim to show that the transition from a fossil-fuel-based energy system to one based on renewables – specifically, wind and solar – cannot be achieved within a capitalist system based on the production and realisation of capital value.
Overshoot’s authors argue that, under capitalism, fossil fuel companies will continue to find ways to justify their extraction and burning of fossil fuels for so long as it is profitable to do so, even if this includes being required to capture and store the greenhouse gases that they emit in the process.
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| Broken Hill solar plant in Australia. Photo by Jeremy Buckingham / creative commons |
Indeed, the potential for such abatement (as it is called) has long been used – including by the Intergovernmental Panel on Climate Change (IPCC) – precisely to justify the continued extraction and burning of fossil fuels. The book focuses particularly on the phenomenon of “overshoot”, according to which the agreed global temperature limit of 1.5 degrees Celsius above pre-industrial levels is on course to be exceeded, and in future is likely to be further raised to 1.7 and then 2 degrees.
Up until recent years, it was naively assumed by many people that, as the cost of renewables fell, so that they became cheaper to trade than fossil fuels, wind and solar would correspondingly take over from fossil fuels in electricity generation in particular, and in the electrification of economic activity generally. However, this has not happened: renewable energy capacity has increased, but not to the extent envisaged.
Brett Christophers explained this in his book The Price is Wrong,[1] largely by pointing out that profit is not the same as price, and this theme is taken up by Malm and Carton. Essentially, fossil fuel companies can make substantial profits mainly because of the value they can generate, while renewable energy companies command less value and therefore tend to be less profitable.
Christophers argued that fossil fuel companies can make more profit because of their monopolistic domination of the energy market, but Malm and Carton rightly point out that the energy industry is actually highly competitive so this cannot explain the lower profitability of renewable energy companies (page 215).
So why do renewables generate less profit than fossil fuels? Here Malm and Carton deploy at least three arguments.
First, they cite evidence that the profits from electricity generated from solar and wind decline as their penetration in the business of electricity generation increases (page 211). However, the source they cite, an article by Dev Millstein and others,[2] suggests that this decline can be counteracted in a number of ways, including energy storage, improved transmission grids, demand response, and new flexible loading. Essentially, then, it is not inevitable that increasing penetration of wind and solar in the electricity system will be linked to decline in profitability.
Second, Malm and Carton point out that solar and wind are “non-rivalrous”: “they can be consumed by any number of people without being depleted” (page 216). The implication here is that sun and wind exist in abundance, so making profit from them is inherently limited. However, this seems to confuse solar and wind with electricity, as in: “a seller of solar-powered electricity offers a good that will last for another 4 or 5 billion years” (page 216).
In fact, although the sun may last for another 4-5 billion years, the electricity certainly will not. Unlike solar and wind, electricity is not non-rivalrous and cannot be consumed without being depleted – and over only a short period of time. This consideration leads me to the third, and crucial, argument.
Malm and Carton argue that what they call the “flow” – of water, wind and solar radiation – “cannot have value” (page 208) in Marx’s terms, because no labour is required to produce it. Following Marx, then: “Where there is no value, there is eo ipso nothing to be expressed in money. And where there is nothing to be expressed in money, there can be no profit” (page 209).
So far, so good. It can be agreed that wind and sunshine, at least, cannot be bought or sold, and as such they are not commodities and they have no monetary value. However, the major good that they generate is electricity, and electricity is a commodity of crucial importance. Electricity is just not the same as wind or sunshine.
Malm and Carton are right to say that the “flow” begins as a non-commodity (page 212), but it doesn’t stay that way, being transformed into electricity, which is then sold to a variety of buyers.
Electricity has value in Marx’s sense, but it is generated from a variety of sources: water, wind, sun, coal, gas, biofuels, and nuclear power. This makes the determination of its value, and correspondingly its price, extremely complex.
Malm and Carton say: “the only costs of solar and wind are for upfront acquisition and installation” (page 213). But this is not the case. Christophers noted, in particular, the costs of borrowing for renewable energy companies, which can be more burdensome than for fossil fuel companies. Other costs include for transmission and distribution, involving a massive infrastructure, requiring significant costs of management and maintenance.
Value is created all along the supply chain. The potential for profit exists at all stages but it remains unclear how this potential will continue to be realised as the penetration of renewables into electricity generation increases in the future.
Malm and Carton also seem to underestimate the vulnerability of fossil fuel companies. A stronger government commitment to phasing out fossil fuel production could make a difference quite quickly.
In contrast, the UK government’s support for carbon capture and storage serves only to slow down this process, while at the same time showing that fossil fuel profitability will in future be dependent on government subsidy – as is already the case with biofuels.
Malm and Carton seem to think that if electricity remains commodified, then its generation can never be based entirely on renewable energy, so it has to be decommodified in some way in order for this to be achieved. However, they do not explain what a decommodified electricity system might look like, or how this could possibly happen.
I look forward to Malm and Carton’s promised sequel to this book. 18 November 2024.
⏩ Peter Somerville is emeritus professor of social policy at the College of Social Science, University of Lincoln
[1] Brett Christophers, The Price is Wrong: Why capitalism won’t save the planet. (London: Verso, 2024). Reviewed by People & Nature here.
[2] Millstein, D., Wiser, R., Mills, A. D., Bollinger, M., Seel, J. and Jeong, S. (2021) “Solar and wind grid system value in the United States: The effect of transmission congestion, generation profiles, and curtailment”, Joule 5, 1749-1775.
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