Unjust Transitions
Rebekah Diski
The steelworks at Port Talbot was once the largest in Europe, employing 18,000 people at its peak in the 1960s. While British steel production has fallen as part of the wider trend of deindustrialisation, the Welsh plant still employs 4000 of the town’s 32,000 residents and supports many more in the supply chain and the wider local economy. Last week, the Indian conglomerate Tata, which took over the works in 2007, announced plans to shut down Port Talbot’s two coal-fired blast furnaces and replace them with an electric arc furnace, cutting 2500 jobs within eighteen months.
Some elements of the press immediately decried the move as a sacrifice ‘on the altar of net zero’ by a government with a ‘zealotry’ for climate policy. Steel is one of the biggest industrial greenhouse gas emitters, with Port Talbot alone releasing more than 6.6 million tonnes of carbon dioxide each year. Any country serious about reducing its emissions must consider how to decarbonise its heavy industry.
In Sweden, the government is backing a plan to produce steel using ‘green’ hydrogen instead of coal. It helps that the state owns Vattenfall, which generates, distributes and sells electricity, heat and gas, as well as one of the steel companies that, by 2030, will be producing five million tonnes of ‘green’ steel a year.
The Port Talbot announcement, however, is not the result of a coherent national decarbonisation plan (if such a thing existed, it probably wouldn’t involve drilling under the North Sea for every last drop of oil): it is merely the latest fumble by a government whose industrial strategy amounts to a smattering of inconsistent and belated policies, chronic underinvestment and desperate measures to keep private capital in the UK.
The Tata decision had more to do with the uncompetitive price of British steel, due to comparatively high energy costs, than pressure from the net zero agenda. Tata, which had been haemorrhaging money at Port Talbot and threatening to pull out completely, has accepted £500 million in financial assistance from the government to move to a cheaper and greener process. British Steel, owned since 2020 by the Chinese firm Jingye, has demanded the same amount to convert its furnaces in Scunthorpe, risking 2000 jobs.
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In other carbon-intensive sectors, too, job losses are dependent on factors other than net zero: oil and gas jobs, for example, are hostage to global prices rather than any plan to phase out fossil fuels. Such a plan does not, in fact, exist. The Oil and Gas Authority was rebranded the North Sea Transition Authority in 2022, but it still has a mandate for ‘maximum economic recovery’ of fossil fuels; that recovery involves generous subsidies to oil and gas companies through tax relief.
Last week, the government approved a project at Drax power station to capture carbon produced by its biomass units, which burn trees to generate electricity. Drax has received billions in government subsidies over the last twelve years for its highly controversial bioenergy operations, and adding carbon capture – itself an uncertain technology – is likely to be paid for in taxes or energy bills. The only coherent pattern here is of public money being used to fund a decarbonisation trajectory determined largely by private shareholders with no guarantees of social or environmental benefits.
Trade unions have been calling for a just transition for workers in carbon-intensive industries for years. Workers were cut out of negotiations between Tata and the government, with the unions’ job-saving proposals dismissed as unfeasibly expensive. For the workers at Port Talbot, this is a manifestly unjust transition with painfully obvious parallels to the annihilation of the coal industry: in South Wales, you don’t have to look far to see the legacy of social and economic deprivation in former pit towns. Some commentators have even tried to recast the closure of the coal mines and attendant deindustrialisation as an environmental policy, rather than the result of Thatcher’s deliberate effort to crush a powerful trade union movement, as well as shifting trends in global production and economic relations.
‘Eco-zealotry’ has never driven British energy policy, but it’s easy for those who want to delay climate action to tap into the justifiable outrage at (mis)managed industrial decline. For the hard right of the Tory Party, it’s convenient to blame a globalist drive towards net zero, which they have now dropped any pretence of implementing. As with the confected ‘war on motorists’, attention is diverted from the real source of social and economic insecurity towards a remote, metropolitan elite with a disdain for ‘ordinary working people’.
Terrified of appearing fiscally irresponsible or insufficiently patriotic, Labour has prevaricated on climate policy, pre-empting Tory attacks by repeatedly scaling back its commitments. It says it would rescue UK steel with a £3 billion investment in green technology, but it isn’t clear this would be enough, given the head start that competitors have already had. Like Biden’s Inflation Reduction Act in the US, Labour’s net zero plans revolve around ‘crowding in’ private finance to fund green infrastructure: as the economist Daniela Gabor has pointed out, this ‘de-risking’ of private investment, which has funded so much climate and ecological breakdown, will not decarbonise our economies.
Under Keir Starmer, Labour has consistently rejected public ownership of key industries and infrastructure, through which it could properly direct the decarbonisation of some and the phase out of others, with a coherent and democratic plan for the workers and communities affected. Beyond a rhetorical commitment to a revival of British manufacturing that looks increasingly remote, Labour has failed to answer the broader question of how we should improve wellbeing while dramatically reducing emissions and repairing ecological damage. The creation of decent, secure and unionised jobs is crucial to that, but it is not enough: there also needs to be a reconsideration what work looks like, what we produce, what we consume, how we travel, how we care for one another and for other species.
Across Europe (and beyond), the far right has fuelled and co-opted widespread resentment in an increasingly uncertain world, refracting it through a lens that views everything from immigration to trans rights to climate policy as if it were an affront to personal freedom. Without a persuasive political project that responds to and organises around the material realities underpinning that resentment, from rising bills and low wages to threadbare public services, every Port Talbot – and there will be more – will be used to encourage a backlash against the economic and ecological transformation on which our future depends.
Comments
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24 January 2024
at
5:45pm
Michael Dezell
says:
Leaving aside "eco-zealotry" for a moment, it seems to me that one of the main factors that make British steel and other manufactured products uncompetitive, leading to this lousy industrial decline, is the high cost of wages that come from these "decent, secure and unionised jobs" that Rebekah Diski supports (although doesn't, herself, actually pay for).
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24 January 2024
at
7:06pm
adamppatch
says:
@
Michael Dezell
I know next to nothing about steel production, but I'm not sure what the basis is for your claim that high wages or unionization are responsible for the UK's low steel (or manufacturing) output.
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25 January 2024
at
10:01am
JPH
says:
@
adamppatch
https://riancwhitton.substack.com/p/the-riddle-of-british-steel
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25 January 2024
at
9:19pm
adamppatch
says:
@
JPH
I am. Very interesting. Thank you.
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26 January 2024
at
4:07pm
Richie Steele
says:
There is delicious irony here. Tata, an Indian colossus, holds the fate of Port Talbot and its Welsh community in its hands, while India’s former colonial master sits by, with sweaty palms, anxious but ineffective. Perhaps there is a thing called justice after all.
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30 January 2024
at
9:44am
enfieldian
says:
@
Richie Steele
Well, if “delicious” is the word you choose to employ about the prospect of 4000 people losing their livelihoods, we have to let that stand unchallenged. Not so your ignorance of Indian history: the Tara dynasty was one of the first great powers of the industrial economy in the Indian subcontinent; the origin is of their wealth lie far back in the days of the British Raj, in their massive textile mills, mainly in western India, which began to okay a prominent role in the economy in the third quarter of the nineteenth century. The Tatas expanded to other industries: by 1920 their steelworks at Jamshedpur was the largest in the British Empire. But if you are looking for the “colonial masters” in this story, don’t look at the people of Port Talbot - look at the City of London and its servants at Westminster.
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26 January 2024
at
5:10pm
Peter Logan
says:
I liked it very much: the argument couldn't have been presented more concisely. In fact something was omitted. Yes, all sacrifices made to obviate climate change are exploited by the right. The extreme weather events that are already unavoidable will provide more grist to their mills
Read moreI do like the use of the ligature in "haemorrhaging", however - we don't see aenough of that on this side of the Atlantic.
Michael Dezell
Vancouver, British Columbia
Perusing the list of countries that produce more steel than the UK (24th place), I note France (18), Spain (17), Italy (11) and Germany (8), with the top three spots taken by China, India and Japan.
Try as I might, I can't find any sign of a correlation (positive or negative) between unionisation/wages on the one hand and annual steel production on the other - the UK certainly has far lower unionization rates than most of the countries mentioned and lower wages than some too (Germany, France, Japan?).
If I see any pattern, it's that the countries higher on the list are those with a history of state support for their manufacturing sector (including states such as Vietnam (13), Taiwan (12) Turkey (7), Russia (5) and the USA (4)).
A long read if you are interested.