extractivism

By Lucas Koerner - Venezuela Analysis, June 5, 2016

Caracas, June 5, 2016 (venezuelanalysis.com) – Activists from grassroots organizations protested outside the Venezuelan Supreme Court Tuesday to demand that the body put a halt to a controversial mega-mining project spearheaded by the Maduro government.

The demonstration was organized by the Platform for the Nullity of the Mining Arc, an alliance of diverse movements and leading public intellectuals that emerged in response to a law authorizing open-pit mining in 12 percent of the nation’s territory. 

In February, Venezuelan President Nicolas Maduro used emergency economic decree powers granted by the Supreme Court to declare nearly 112 square kilometers of the mineral-rich eastern Amazonian state of Bolivar a “strategic development zone”, which will be opened to as many as 150 national and transnational firms for the extraction of gold, iron, diamonds, and coltan.

The government has defended the initiative as a necessary step towards a post-oil productive economy amid a severe economic crisis triggered by the collapse of global crude prices, the principal source of Venezuela’s foreign currency earnings. 

Nonetheless, the project has sparked vocal opposition from prominent leftist academics and former high officials under late President Hugo Chávez, including ex-Environment Minister Ana Elisa Osorio, internationally-renowned sociologist Edgardo Lander, Major General Cliver Alcala, former Minister of Education and Electricity Hector Navarro, Indigenous University of Tauca Rector Esteban Emilio Mosonyi, ex-Commerce Minister Gustavo Marquez, and former 1999 constitutional assembly member Freddy Gutierrez.

Also raising their voices in outrage over the decree are a plethora of indigenous, environmental, eco-feminist, and socialist collectives, who rallied together with the ex-officials outside the Supreme Court in Caracas in order to deliver a formal nullity plea to the body requesting an injunction against the mining project on constitutional grounds.

By Alberto Acosta; Translated by Dana Brablec - Alternautas, June 4, 2016

Marx said that revolutions are the locomotive of world history. But perhaps things are very different. It may be that revolutions are the act by which the human race travelling in the train applies the emergency brake.

Walter Benjamin (1892-1940)

Mainstream thinking – embedded within capitalist globalisation – leads us to accept the impossibility to imagine an economy that does not promote growth, as much as a world without oil, mining and agribusiness is impossible. Within this mainstream thinking, we can find people from every political stance, from neoliberals to socialists.

Reality, however, is that we must overcome such views, that is the great task of this moment. On the one hand, we must rethink the question of economic growth, and free ourselves from its shackles before we enter into a global socio-environmental debacle with unforeseeable consequences. On the other, it is increasingly urgent to move from an extractivist perspective focused on the demands of capital, towards a view that prioritises a dignified life to its fullest extent and enables the construction of structurally democratic societies. This task puts the capacity of critical thinking to test, as well as the capacities of our societies, states, and that of social and political organisations to engage in innovative and creative thinking.

Closing the door to this debate would entail closing the door on democracy itself.

By Ben Caldecott, Gerard Dericks, Daniel J. Tulloch, Lucas Kruitwagen, and Irem Kok - Oxford, May 2016

Deploying a ‘bottom up’ asset-level methodology, we analysed the exposure of all of Japan’s current and planned coal-fired power stations to environment-related risk. Planned coal capacity greatly exceeds that required for replacement - by 191%. This may result in overcapacity and combined with competition from other forms of generation capacity with lower marginal costs (e.g. nuclear and renewables), lead to significant asset stranding of coal generation assets. Stranded coal assets in Japan would affect utility returns for investors; impair the ability of utilities to service outstanding debt obligations; and create stranded assets that have to be absorbed by taxpayers and ratepayers.

Read the report (PDF).

By various - Re:Common, April 2016

By presenting the horrors suffered under the domination of multinational companies, this work by Re:Common will dispel any lingering doubt that the current economic system based on extractivism is a war against the poor (what subcommander Marcos called the “Fourth World War”).

If someone who trusts the mainstream media and academic analyses thinks that at some point colonialism disappeared from the face of the Earth, this work, based on documents and testimonies, demonstrates otherwise.

For those who believe that progress is the most striking characteristic of our times, starting with the post-World War II period, the voices of the missing that populate these pages will convince you that present-day capitalism is a just a revamped version of the Spanish conquest of five centuries ago.

Throughout this work, all the variables of extractivism can be seen: from occupation of the territory and displacement of people to the role of the offshore banking and financial system, as two complementary and inseparable parts of accumulation by theft/dispossession. In the occupied territories, the displacement occurs in the form of war, with the participation of military, paramilitary, guerrilla and the greatest variety of imaginable armed actors.

The victims are always the weak: poor women and their children, elderly men and women, peasants, Indians, blacks, mestizos, the “wretched of the Earth,” as Frantz Fanon calls them. I want to emphasize, though it may seem anachronistic, and without reference to academic sources, how the extractive model coincides with colonialism, despite the different eras. This is not only due to the violent occupation of territories and the displacement of populations, but also to the salient features of the model.

Economically, extractivism has generated enclave economies, as it did in the colonies, where the walled port and plantations with slaves were its masterworks. This colonial/extractive model held populations 6 hostage in both 1500 and 2000.

Extractivism produces powerful political interventions by multinational enterprises, often allied with States, which manage to modify legislation, co-opting municipalities and their governors. It is an asymmetrical relationship between powerful multinationals and weak states, or better, states weakened by their own local elite who benefit from the model.

Like colonialism, the extractive model promotes the militarization of the territories, because it is the only way to eradicate the population, which, recalling Subcommander Marcos, is the real enemy in this fourth world war. Militarization, violence, and systematic rape of women and girls are not excesses or errors; they are part of the model because the population is the military objective.

To understand extractivism, we must consider it not as an economic model, but as a system. Like capitalism. Certainly there is a capitalist economy, but capitalism is not just the economic aspect. Extractivism (as stated by Re:Common) is capitalism in its financial phase and cannot be understood only as an economic variable. It implies a culture that promotes not work but consumption, which has (systemic) corruption as one of its central features. Put in another way, corruption is the extraction mode of governing.

Therefore, extractivism is not an economic actor; it is a political, social, cultural, and of course also economic actor. At this point, it’s crucial that the central part of this work describes human beings and the Earth as the subjects for looting, which is much more than the theft of the commons. Understanding dispossession only as robbery places property ownership at the center of the matter, in the place of people and land; e.g., life.

Read the text (PDF).

By Yessenia Funes - Yes! Magazine, March 15, 2016

Our lifestyle is inextricably linked to fossil fuels. We pay the industry to heat our homes and power our cars. Though driving might be optional where public transit is available, heat is not during harsh winters. We know about the effects on the climate of burning oil, gas, and coal for energy, but we don’t know what turning our backs on them will do to our economy. Some worry that closing our oil refineries and shutting down our mines would throw the market into a dangerous vortex. That doesn’t need to be the case. A successful energy transition could actually benefit the economy and reduce inequality.

The economy relies on a number of things, including spending, manufacturing, trade, and personal income. The availability of fossil fuels has largely driven these for 150 years. “[Oil] is the world’s first trillion-dollar industry in terms of annual dollar sales,” environmental author Jack Doyle wrote in 1994. In North Dakota, a major oil- and gas-producing state, an oil boom created the $53.7 billion gross domestic product the state sees today.

But booms often have downsides. When the journal Energy Economics compared six states that produced the vast majority of the West’s crude oil and natural gas, it saw per capita income decrease by as much as $7,000 in counties whose incomes relied most on such development. Also, the crime rates and percentage of adults without a college education increased in those counties. The study offers possible explanations, including an increasing reliance on nonlocal workers and changing wage structures.

The oil and gas industries are the largest industrial sources of volatile organic compound emissions—2.2 million tons a year. These chemicals cause smog, which can increase the risks of asthma and premature death. The industry also produces cancer-causing pollutants: benzene, ethylbenzene, and n-hexane, which are emitted during the refinement process.

Low-income communities of color disproportionately bear this health burden and are also least likely to have access to health care, including preventive medicine, checkups, and prescription drugs. The inequality of care only widens the income gap by adding more financial pressures to an already stressed group.

What about jobs? Extractive industries currently employ nearly 200,000 Americans and pay some employees as much as $42.90 an hour. These jobs are a valid concern. The U.S. unemployment rate is finally down to about 5 percent. Surely we don’t want all those people put out of work.

That won’t happen if we launch the renewable energy sector in sync. Economists at the University of Massachusetts Amherst’s Political Economy Research Institute (PERI) have studied this topic since the early 2000s. Their research shows how a transition to renewables can lead to a post-carbon world and a fairer economy.

By lmi Granoff, et. al. - Overseas Development Institute, 2016

Eradicating global poverty is within reach, but under threat from a changing climate. Left unchecked, climate change will put at risk our ability to lift people out of extreme poverty permanently by 2030, the first target of the Sustainable Development Goals. Coal is the world’s number one source of CO₂ emissions. Most historic emissions came from the coal industry in the developed world in the last century, with China joining the biggest emitters at the beginning of this one. It is widely accepted that a rapid and just response to climate change will require the urgent replacement of coal with low-carbon energy sources in rich economies.

Now the coal industry claims that expanding coal use is critical to fighting extreme poverty and improving energy access for billions of people in developing countries. In fact, the opposite is true. The global commitment to eradicate extreme poverty and energy poverty by 2030 does not require such an expansion and it is incompatible with stabilising the earth’s climate. The evidence is clear: a lasting solution to poverty requires the world’s wealthiest economies to renounce coal, and we can and must end extreme poverty without the precipitous expansion of new coal power in developing ones.

This paper explores the role of energy in fighting poverty, arguing that:

• More coal will not end energy poverty
• Coal is given too much credit for the reduction of extreme poverty
• Better energy options exist to lift people out of income poverty
• More coal will entrench poverty.

Read the report (EN PDF) | (JA PDF) | (ZH PDF).

By Frank Ackerman, PhD and Tyler Comings - MACED, December 30, 2015

The steep, ongoing decline of coal mining has caused the loss of 30,000 coal jobs in eastern Kentucky in the last 30 years. Trends in energy markets and public policy make it clear that a coal‐based economy is not coming back. A successful response to this crisis, replacing the lost kingdom of coal with a sustainable, community‐controlled economy, is crucial to the hopes for forward‐looking economic development in the region.

The issue reverberates far beyond the coalfields, as the national search for clean energy alternatives confronts impassioned claims about the need to protect coal mining jobs. In Kentucky and in the nation, a common but misleading frame on the debate suggests that there is no alternative, that “real” jobs can only be created by traditional industries, even if they are environmentally damaging.

In fact, the narrow, coal‐centered vision of “real” jobs is fading away, and discussion of newer, cleaner alternatives is already underway. Community organizations such as the Mountain Association for Community Economic Development (MACED) and Kentuckians for the Commonwealth (KFTC) have sponsored grassroots job creation initiatives, and have identified key sectors where employment growth should be possible. Both MACED and KFTC advocate for a Just Transition, a bigger picture that combines existing initiatives into a single vision of a working economy, mapping the sustainable occupations and industries that will fill the void left by coal.

Our analysis describes a new pattern of employment that Appalachian Kentucky could aspire to reach by 2030. It is a more challenging and longer‐term goal than is usually found in immediate grass‐roots campaigns. At the same time, it is more limited, detailed and practical than a grand statement of ultimate objectives. It occupies an intermediate level of abstraction, a mid‐range strategic vision of what the regional economy could look like in ten to twenty years.

Read the text (PDF).

By various - Carbon Trade Watch, December 2015

Over twenty years have passed since governments within the United Nations Framework Convention on Climate Change (UNFCCC) began to discuss the impending climate crisis. Year after year, we witness the talks moving further away from identifying the root causes of climate change while the increasing impacts affect even more peoples and regions. Every meeting has given more space for corporate involvement and less to the voices of those directly affected by these climate policies. Despite the promoters’ fancy “green” campaigns and videos, the main focus at the climate negotiations continues to be about saving the free-market economy for those who are holding the cards – the biggest transnational corporations and financial institutions. The same corporations that are largely behind the destruction of forests, rivers, diversity, territories – as well as the violation of human and collective rights and so on – are also the main polluters and plunderers of the Earth.

The climate crisis poses a real threat to the current economic model which is based on the continuous extraction and production of fossil fuels, hydrocarbons and “natural resources” such as land, minerals, wood and agriculture. If talks were to seriously address climate change, there would need to be a discussion on the many ways to support the hundreds of thousand of small-scale farmers, fishers, Indigenous Peoples, forest-dwelling communities and others whose territories and livelihoods are at risk from capital expansion, and how to transition to different economic systems where fossil fuels could be kept underground; where the consumption “mantra” would shift towards more local, diverse and collective discourses and practices. However, the hegemonic and colonial powers are once more violently closing doors, creating more “structural adjustments” and, ultimately, harming the people who are the least responsible for current and historical pollution levels suffering the most from the impacts.

The fallacy that we can continue with the same economic model is irremediably flawed, bankrolled by big polluters, and intrinsically linked to land and livelihoods grabbing, especially in the Global South. Nonetheless, mechanisms like carbon markets, which expand the extractivist and free-market logic, continue to be promoted as unilateral, program- matic “solutions” to mitigate climate change and address deforestation and biodiversity loss. From carbon trading to forests and biodiversity offsets, the climate crisis has been turned into a business opportunity, worsening the already felt impacts, especially for those who are the least responsible. Debates over molecules of carbon being accounted for and “moved” or “stored” from one location to the other detracts from the necessary debates on shifting away from extraction, unjust power structures and oppression. While being fully informed of the causes of climate change, international climate negotiations strive to ensure that the hegemonic economic model expands and rewards polluters.

The consequence is that “climate policies” (aka economic policies) finance the most destructive industries and polluters, often destroying genuinely effective actions that support community livelihoods and keep fossil fuels in the ground. Moreover, these policies further the “financialization of nature” process, which presupposes the separation and quantification of the Earth’s cycles and functions – such as carbon, water and biodiversity – in or-der to turn them into “units” or “titles” that can be sold in financial and speculative markets. With governments establishing legal frameworks to set these markets in place, they also have provided the financial “infrastructure” for negotiating financial “instruments”, by using derivatives, hedge funds and others. While financial markets have a growing influence over economic policies, the “financialization of nature” hands over the management to the financial markets, whose sole concern is to further accumulate capital.

Read the report (PDF).