Friday, September 20, 2024

SCOTLAND


What Green industrial strategy?

20/09/2024
COMMON WEAL
Rory Hamilton

Last week, the Scottish Government published the first part of its Green Industrial Strategy for Scotland. The long and short is that there’s not much in it. This might be to be expected from a ‘foundational’ paper that “identifies areas of strength and opportunity for Scotland to grow globally competitive industries in the transition to net zero”. Before getting into the meat of the paper, I might make two observations: 1) for an ‘industrial’ strategy, unions are only mentioned once – for a piece of work which should have a direct impact on workers, workers who will be key to a just transition, you’d think consulting with them might have made sense; and 2) for a piece of work targeted at addressing Scotland’s response to the climate crisis, something we’ve known about for years, this is far too late in coming. Common Weal published its Green New Deal for Scotland, fully-costed in late 2019-early 2020, and only five years later are the Scottish government putting forward a strategy for tackling the same issues.

The strategy highlights five ‘opportunity areas’ for Scotland: 1) maximising Scotland’s wind economy; 2) developing a self-sustaining carbon, capture, utilisation and storage sector; 3) supporting green economy professional and financial services, with global reach; 4) growing our hydrogen sector; and 5) establishing Scotland as a competitive centre for the clean Energy Intensive Industries of the future. Let’s go through them one by one and see what lies beneath the rhetoric.

1. Maximising Scotland’s wind economy

It’s a bold move to open with a goal to maximise Scotland’s wind economy, when none of it is in the hands of the Scottish public. As Common Weal has extensively covered, not only was it wrong to sell off Scotland’s offshore wind capacity to the private sector in the first place (instead of placing this in the hands of a National Energy Company, whether through Municipal ownership or through a mutual company), but the capping of bids for licences severely limited the potential for ScotWind to ‘maximise’ the offshore wind potential in the same way as, say New York did. The Scottish Government should now consider buying equity stakes in the projects to return revenue to the Scottish public, and move from having no involvement in the development of Scotland’s natural resources to being a silent partner, with a longer term option to become the active or sole partner.

2. Developing a self-sustaining carbon, capture, utilisation and storage sector

CCUS is another scheme which we have debunked time and time again. Not only has it been proven to not work, but in some cases the emissions are more harmful. I wont go over all the arguments again, instead watch this short video or read Robin’s article from THREE years ago. What I will say is this, Carbon Capture and Storage is a con led by the oil and gas industry as a way to delay the transition to renewable energy and keep their profit base alive for a few years longer. They are pushing it hard – last year there were 30 meetings held between the Scottish Government and oil and gas executives which were initially kept hidden from the public record. The money invested in developing the CCUS sector as part of this strategy would be much more effective in supporting training schemes for current oil and gas workers which will help them move into renewables-based jobs.

3. Supporting green economy professional and financial services, with global reach

So the argument goes that financial and professional services (FPS) is one of Scotland’s core strengths, being the largest financial centre outside of London, employing around 144,00 people. But it should be no surprise to hear that the interests represented by this sector are not those of the broader public. Whether it is one of the big four accountancy firms, hedge funds and investment banking, fintech, or asset management companies, the goal is maximising financial returns on investments largely by speculating on values. In this case the speculating is focused on Scotland’s “natural capital” (for natural capital read, Scotland’s resources: wind, land, solar, tidal, etc.), meaning that supporting Scotland’s green FPS sector with global reach is code for attracting more foreign direct investment (again code for profit extraction), as we’/ve already seen successfully leveraged in the offshore wind industry and in the selling off of Scotland’s trees. Besides – who ever thought of accountants and bankers when ‘industry’ was mentioned, Sod’s Law for all the engineers, welders, timber workers, transporters, farmers, joiners, plumbers, electricians, and anyone else whose skills will be crucial to the just transition that I haven’t mentioned. When the closure of one of Scotland’s last remaining industrial sites at Grangemouth is estimated to see around 400 immediate job losses and impact a further 2,200, it is fairly on the nose that it might well be white collar workers (many of whom will already come from and live in fairly comfortable living and working conditions) who will see the greatest support from what should be an enormous engineering and investment programme like the Green New Deal.

4. Growing our hydrogen sector & 5. Establishing Scotland as a competitive centre for the clean Energy Intensive Industries of the future

Now there isn’t so much to comment on these final two ‘opportunity areas’, hence I am taking them together here. Common Weal supports the investment in hydrogen technologies, indeed the future of public and sustainable transports is not in electric cars, but moving to alternative fuels such as hydrogen. A word of warning though, is not to read all hydrogen as good hydrogen. Some hydrogens are can be derived from fossil fuels such as gas, and the use of carbon capture for example is one means of turning this into ‘clean energy’, it has been shown that blue hydrogen can be worse for the environment than the pure gas itself. So while we must support growing the hydrogen sector, emphasis should be placed on sourcing green hydrogen and not giving credence to hydrogen fuels which masquerade as clean energy but are actually just fossil fuels in disguise. And similarly the establishing to Scotland as a competitive centre for clean energy industries is surely the goal of this whole strategy which, objectively, and especially considering Scotland’s natural resources, is hardly disagreeable.

So in short, this so-called ‘industrial strategy’ is caked in the language of capital, and without casting too many aspersions, the fingerprints of the Scottish Government’s favourite accountancy firms-come public sector consultants are all over it. So much for the ‘active state’ Kate Forbes and Gillian Martin call for in their ministerial forward, the only state activity in this strategy is opening market doors for the private sector, and closing them again on the way out after all the profit is gone.

“But the public sector is only part of the economy” they say in the same forward. Is it? You wouldn’t know it was ANY part of the economy from reading this paper. They highlight Denmark and Ireland as examples to emulate, but the choices made by previous SNP governments (of which many members of this cabinet signed off on) have foreclosed the possibility of doing so, whether that’s not creating a National Energy Company (of any kind), and the Energy Development Agency (which we modelled off the Danish example) we proposed, or allowing the Scottish National Investment Bank to fall in tow to the interests of capital, and ignoring the potential of it to be that active state by leading investment into key sectors such as this.

It is quite apt that one of the governments which is failing the workers of Grangemouth, one of Scotland’s last sights of industrial activity, released this lacklustre paper on the same day it was announced that Grangemouth would indeed close next year. Indeed, with the resources we have Scotland should be a green industrial powerhouse leading the world in a radical response to the climate crisis, and lord knows the public needs the investment a Green New Deal would generate, but this paper belies the chokehold that the private sector has on policy making in Scotland.




What if we cared about the future?


20/09/2024
COMMON WEAL
Robin McAlpine

London is due many thanks to Joseph Bazalgette. As you may know, he was the man who designed London’s sewer system, and he did something which is unimaginable now – he future-proofed it. He worked out the size of the sewers London needed, concluded London would get bigger, concluded sewers shouldn’t be built in two goes and so simply doubled the size.

The outcome of this was the Swinging Sixties didn’t need you to wade through sewage to get down Carnaby Street. Had he not over-specified the sewers, they would have reached overflow point by the middle of the 20th century. Now? In Scotland we can’t successfully build a school big enough for the children already at it.

What I want to write about here is the mindset that says ‘I want to leave a positive legacy for the next generation’ and the mindset that says ‘to hell with it, the next generation can deal with it’. Which are we? Not the former. Joseph Bazalgette would never get anywhere near interview stage if Scotland put a contract for a new sewer system on its procurement portal today.

I was thinking about this because of a daft laddie conversation with someone who knows a lot more than me, and an email in response to a previous newsletter piece. Both were about the National Grid which is about to get a major upgrade to facilitate decarbonisation of electricity supply. Common Weal has been doing a lot of policy work on this (major paper to publish soon) and one of our readers is going to be stuck with the consequences.

Our reader is getting a new array of mega-pylons in her immediate area. These are enormous and it’s a stretch to find much beauty in them. But we need that copper up there because we need to get that wind energy into the grid. This is what prompts my questions.

I asked someone who used to run a national electricity grid why we didn’t just bury the cables. The answer is easy – it costs three times as much. OK, but about a third of the total cost of our electricity grid is maintenance on cables. Of course it is – they are comparatively thin wires strung way up high in a stormy country.

Ah but, said my expert, there would be plenty maintenance of underground cabling too. I asked why? The answer (as I understand it) is that thin cables like that are still vulnerable, as are all their junctions and connections. Aye, but why make them thin? You need to do that if you’re hanging them 50 metres in the air and weight is a big issue, but not if you bury them.

So make the cabling thicker and you’d have less maintenance, though of course this increases the cost further. But if you don’t need to squeeze your electricity down thin cables, do you need to use copper? Not really. Aluminium has 60 per cent of the conductivity of copper (so you lose a bit more energy along the cables) but it is a quarter of the price of copper and is much lighter to transport.

So the rule is that you’d struggle to run a grid from aluminium strung out between pylons, which is why we don’t do it. But you don’t have that restriction in the ground. Putting thick aluminium cabling underground would be more expensive than hanging copper from pylons, but it would be much more durable, would require much less maintenance and would be able to cope with rapidly increasing demand in the future if we have not predicted our future use accurately.

The conversation got even more technical from there so I won’t go on because I’ll misrepresent the arguments. The point is not that I’ve come up with a brilliant wheeze to ‘solve electricity’ that no-one else has thought of. It might not be a good idea for other reasons. But this is something like what I think our electricity grid would look like if it was being designed by a Joseph Bazalgette character.

The outcome would be a grid with perhaps three times the capacity of the one we are building now but for something like same price as if we were putting that one in underground rather than over pylons. And without lightning, wind, landslides, birds and all the rest, the maintenance bill would be negligible (for the transmission side of things – distribution is different, as I keep being reminded…).

What we’re doing is leaving ourselves a bigger bill tomorrow and the day after, and an even bigger bill for our children, and if there is any need to expand capacity in 30 or 40 years we leave a much bigger bill for our grandchildren. Oh, and the future-proofed method doesn’t spoil beautiful views or anger people who have to live with the infrastructure. There is no big charitable fund to buy community consent for pylons like there is for wind farms.

The most acute example of our ‘patch it up and make do’ approach must surely be the Rest and Be Thankful where, seemingly to avoid one big engineering bill we have been pursuing smaller-scale project after smaller-scale project to prevent landslides closing the road (£16 million just for consultants…). They have failed, but they have still accumulated a cost that could almost certainly have built a tunnel in the first place. Which would have been Job done.

I’ve been thinking about this a lot of late. For my own entertainment I have been building an eco-utopia in my head (yes, I know…). One of my conclusions is simple; a good society is a low-maintenance society. You’ll always need maintenance and when it needs done it needs done properly.

But if you build everything in a shoddy way then in truth you spend its lifecycle not so much maintaining it as repairing and repairing the poor quality work. And by shoddy I don’t just mean not fit for purpose, I mean built in a way that it might be fit for purpose at first but everyone knows it won’t still be fit for purpose by the end of its reasonable lifespan.

So if you spend just a little more at the outset to produce a better outcome, in the long run it almost certainly saves money, time and effort. But (and this is one of the fundamental problems with neoliberal capitalism) it may not save you money. It might be the next generation that benefits. The neoliberal assault on the idea of capital borrowing is the problem.

We still behave as if infrastructure which should be built to survive a hundred years ought to be paid for in ten. It’s almost like we’re saying ‘sod my grandchildren – why should I pay tax to build a school big enough so that when their kids go there is a desk for them?’, or ‘to hell with the 2050s, if they want electricity they can redo all the grid at their own expense’.

It is the stupidity of money, the corrosive mess that is the financialisation-of-everything, the reductive failure of short-termism. It is exactly the same principle behind our disposable consumerism – buy a less good thing that you’ll need to replace three times over the same time that one thing costing 30 per cent more would keep working.

It is the false effect of money. A million pounds can buy you a carbon negative, close-to-passivhaus-standard terrace of five houses or it can buy you a trip into space on a commercial rocket. And the day after you come back from your space trip, the houses are still there. They’re still there 50 years later.

Money-is-money-is-money, right? But the things you buy with money behave very differently. Some have intrinsic value that endures, some have intrinsic value that increases, some have intrinsic value that disappears. But the money is the same.

So in this financialised world it makes ‘sense’ to have the Scottish Futures Trust which is there to find clever-clever financial tricks and schemes to build public infrastructure in the private sector on a cost-saving basis. In a sane world you’d design infrastructure to be as future-proofed as possible and you’d spread the cost over its lifetime, without even thinking about it, because it is a real, meaningful capital investment with real, meaningful returns over its duration.

After all, that’s what the Victorians did and there is so much to thank them for. Us? Really, what do you think our children will thank us for building? Probably that one bridge, certainly not the hospitals or many of the schools or sports centres or the electricity grid. Instead they’re going to look at what we did and think ‘those tight-fisted bastards left it all on us’.

It isn’t much of a legacy, is it? The economics don’t make sense, the finance doesn’t make sense, the social and economic impact don’t make sense – and yet still we build a substandard future. Expensive-to-maintain electricity pylons that do so much to impact on parts of rural Scotland do not need to be there. There is a better option, if we were a better generation.


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