Given how backwards the Rio Summit’s priorities were, it’s hardly surprising that negotiations ended before they began. But a slow swarm of black ministerial limousines have crawled across Rio regardless, with Ministers, Presidents and Prime Ministers queuing up to talk the language of sustainability, while mostly advancing corporate interests. It came to a close yesterday with the adoption of a final  declaration called, without a hint of irony, ‘The Future We Want.’

The Rio declaration contains 283 paragraphs of blank prose that ‘reaffirms,’ ‘notes,’ and ‘acknowledges’ a long shopping list of activities, but ‘commits’ to virtually nothing. There is no program of action, figures, dates, targets, nothing at all that locks countries into taking action. It is a political non-event that turgidly regurgitates some of the sustainability-speak of the original Rio conference 20 years ago, with none of its ambition.

Despite that, there are a few straws for optimists to clutch at. The most significant-sounding, from an environmental perspective, is that the text ‘reaffirms’ a commitment to ‘phase out harmful and inefficient fossil fuel subsidies.’ This references previous statements released by the G20, the group of 20 countries accounting for over 80 per cent of the global economy, but it is the first time fossil fuel subsidies get such a mention in a document with multilateral sign-ons. However, no practical, legal or financial provisions are envisaged to support this goal, and the proposal lacks any nuance.

Fossil fuel subsidy removal is likely to fail unless it is phased in while subsidies are shifted towards support for public transport and renewable energy development, as popular backlash against recent attempts to remove fossil fuel consumer subsidies in Bolivia and Nigeria make clear. Meanwhile, significant subsidies for fossil fuel producers in industrialised countries, which should be the first target for action, remain in place, while the Rio declaration simultaneously supports ‘cleaner fossil fuels technologies’ (a point lobbied for by Canada, Russia and the coal lobby)—which, translated for the non-sustainability-speakers means things such as unproven and expensive carbon capture and storage technology.

Elsewhere in the Rio declaration, there is a welcome restatement of the original Rio principles, notably the ‘common but differentiated responsibilities’ between countries that climate justice advocates have been so keen to defend within global climate negotiations. The ‘right to water’ is reaffirmed too, although without any new measures to enact this principle.

One of the most significant aspects of the final declaration, meanwhile, is what it does not say. It is entirely silent about the ‘nature, origins and evolution of the global economic and financial
crisis that is wreaking havoc in the world today’ and undermining sustainability, as Professor Alejandro Nadal of the Centre for Economic Studies in Mexico points out. Yet finance quietly dominated from the sidelines, and to historians looking back on Rio in 20 years time, it may well be that the most significant agreement was not the summit’s final statement itself, but a $30 billion currency swap deal between Brazil and China that was announced at a G20 side-event.

Thankfully, the declaration also does not say as much as it had threatened to in terms of advancing corporate-driven ‘green economy’ proposals, which would have put a price on nature as a prelude to creating new markets in ‘ecosystem’ commodities. The G77 (a grouping of 133 developing countries, including China) blocked this language, under pressure from civil society, and the resulting agreement speaks merely of ‘green economy policies.’ That has been interpreted here as a victory for pluralism, with different countries free to define their own vision of what a sustainable economy might look like.

Some residues from this corporate-driven approach can still be found in the Rio declaration, however. Although the green economy was billed as the conceptual replacement for ‘sustainable development,’ it is actually the phrase ‘sustained growth’ that has moved to the top of the rhetorical hit-parade, with 16 mentions in the text. This echoes the emphasis on ‘green growth’ in the G20 declaration, which pre-empted the Rio summit.

One of the few substantial decisions, a proposal to upgrade the United Nations Environment Program (UNEP) in the pecking order of global institutions, is also a cause for concern. In theory, a beefed-up UNEP should be a welcome development, re-balancing the multilateral system to put a greater emphasis on environmental protection. But UNEP is one of the principle targets of a new global campaign, launched here in Rio, to endthecorporatecaptureoftheUN. Through its ‘The Economics of Ecosystem Services and Green Economy reports’, in particular, UNEP has positioned itself over the last few years as the main cheerleader for a corporate-driven ‘green economy’ agenda that would leave key decisions over the future of the planet to the financial sector.

Moving beyond the declaration itself, the inadequacies of the Rio+20 declaration are a symptom of a broader crisis of multilateralism. Although the conference was marshaled to a conclusion without the all-night, beyond-deadline chaos of climate negotiations, it did so by agreeing only on lowest-common-denominator platitudes, and reaffirming other initiatives. The final declaration here is no less of a stalemate than those in the WTO or UN climate negotiations, and we know from those processes that multilateral stasis is a breeding ground for bilateral and regional agreements that stack the cards against poor countries. The outcomes turned the tables on Durban, with the EU expressing disappointment while the G77 was cautiously positive, but the overall results were the same: a victory for the dirty energy agenda of industrialised countries and corporations, while people and the planet continue to lose ground.

To understand why, it’s important to unravel the pollyannaish rhetoric of a “victory” that delivers the “aid” to “rescue” Spain, accompanied by talk of a strengthened and more “credible” Euro. The bailout of up to €100 billion is not “aid” to Spanish banks. It is a loan and will need to be paid back.

The money will come from the European Financial Stability Facility (EFSF) and/or its successor, the European Stability Mechanism (ESM), which is due to begin in July 2012 (although it has yet to be ratified by Germany). The loan payments will go directly to the Spanish state’s “Fund for Orderly Bank Restructuring” (FROB, Fondo de Reestructuración Ordenada Bancaria), which will then recapitalise failing banks – in effect, nationalising their liabilities.

Significant action to “rescue” and reform Spain’s banking system is painfully necessary – although key questions remain about who or what is rescued, by whom, and with what conditions. As things stand, a growing number of the country’s banks are falling short of their capital requirements, most notably the current or former cajas – regional savings banks that are similar to building societies in the UK or savings and loans in the USA. This means they lack the minimum amount of money that international banking regulations (Basel II) say they need to hold onto relative to the amount that they have lent out in order to remain solvent.

Put simply, this part of the Spanish banking system risks collapse, which could leave millions of ordinary savers out of pocket and therefore knocking at the door of the Fondos de Garantía de Depósitos (FGD), the fund that guarantees savings up to €100,000. But the Spanish government doesn’t really have the money to underwrite this fund in the case of a run on the banks, which could become a self-fulfilling prophecy if enough savers lose faith that their money is secure and so remove it from the Spanish banking system. That’s already happening, in fact, with about €100 billion withdrawn from Spanish banks already this year. But with total deposits of $1.25 trillion, the situation could get a whole lot worse.

At first glance, what’s on offer for Spain looks “better” than what Greece, Portugal and Ireland got – with the major proviso that there may be many devils lurking in the details of the agreement that are yet to emerge. What it looks like so far is that the FROB will get loans at 3 to 4 per cent interest, which is better than the market rate for Spanish government borrowing in a situation of good money is chasing bad.

If there is a glimmer of good news in all of this, from the perspective of austerity’s opponents, it is that the differential treatment of Spain and Greece shows that the anti-austerity Syriza coalition in Greece is right in its assessment that the “memorandum” under which Greece’s second bailout was agreed is unfair. That, in turn, could yet boost the party’s support in next week’s Greek election.

But there remains plenty of bad news for the Spanish people to swallow. The fundamental fact remains that the “bailout” amounts to loans of up to €100 billion which will need to be repaid, potentially impoverishing the country for generations, while leading to more cuts and tax increases in the short to medium term. As Democracy Real Ya, a network that has been instrumental in the Spanish indignados movements of the past year, wrote in its assessment of the bailout, this debt burden (like that loaded onto Africa) makes the country a “slave of interest payments so high that everything goes to repaying them,” with the result that wealth is privatised, and workers are exploited even further.

Spanish prime minister Mariano Rajoy is currently crowing that he has successfully negotiated a “soft loan” rather than a bailout – and while this may turn out to be technically correct, it is a smokescreen. The “bailout” probably won’t work for the Spanish banks, and almost certainly won’t help the Spanish state, the Spanish people, or the Eurozone as a whole. It simply kicks the financial can a short way down the road, delaying the collapse of the Spanish banking system for long enough that international investors, most notably German and French banks, can withdraw their money. We’ve been here before with the other “bailouts”.

A loan to the FROB is still a loan guaranteed by the Spanish state and, as such, it is money added to the Spanish sovereign debt. Moreover, if the lending comes from the ESM, then this will be treated as a “preferential” creditor – in other words, the one that is paid back first if there’s a default. The markets call this the “subordination” of Spanish government bondholders, meaning they have just slipped down the priority list of creditors. That’s likely to increase the cost of Spanish borrowing, since it has become riskier. Yet the rising costs of Spanish debt are a key contributor to the current crisis.

In response, markets are likely to see a sell off of even more Spanish debt, with investors concerned that the bailout marks the start of a road that leads to a “haircut” that would leave them sitting on massive losses. The partial exception here is Spanish investors (mostly banks, pension funds and insurance companies), which own 67 per cent of Spanish government bonds, a share that could well continue rising.

The bailout doesn’t change the spiral that was revealed with the recapitalisation of Bankia last month itself. Bankia itself was a forced merger between several cajas, the largest of which had close ties to politicians from the ruling, right-wing Partido Popular. It first requested a €4.5 billion rescue, but in the course of a few weeks that figure rose to another €19 billion. Other cajas are now lining up for similar rescues.

Michael Hewson, senior analyst at CMC markets, aptly described the Bankia bailout as “akin to 2 drunks propping each other up”. Little has changed with the European bailout. Spanish banks are being rescued by increasing Spanish sovereign debt, which is finding fewer and fewer buyers outside of the Spanish banks themselves. As Spanish bonds become more risky, property prices fall, and bank deposits moving elsewhere, the €100 billion could even be an under-estimate.

Spanish banks and government may stumble on for a little longer, but none of the economic fundamentals have been changed by bailing out the banks. Structural inequalities in the Eurozone rendered Spain uncompetitive with Germany, which has been the biggest winner of a monetary policy set by the Frankfurt-based European Central Bank. The housing bubble temporarily masked this weakness, providing a source of growth in the boom years at the start of the century. But unemployment shot up when the bubble burst, and now stands above 24 per cent. The figure runs to over 50 per cent for under 24s, while the generation of 25-34 year olds were dubbed mileuristas, earning €1000 per month (despite holding one or more degrees), which is barely enough to cover sharply increasing living costs. Meanwhile, wage deflation is pushing the mileuristas’ income still lower.

These problems have been compounded by some of the harshest austerity policies in Europe, with spending cuts decimating health and education, and tax increases that do more to harm the poor than the rich. Spain may have avoided IMF loans and their punitive “conditionalities” for now, but its government is already administering IMF-style structural adjustments.

These include labour law reforms, which came into effect in February 2012, that make it easier to fire people. This was sold as a measure to make employers willing to risk taking on more people. In practice, unemployment continues to increase (despite a small seasonal reduction in the last month, related to the start of the tourist season), while those with jobs face ever more precarious conditions.

Austerity as a whole has proven to be a disaster: crashing the economy into another recession, compounding unemployment and decimating health and education services. It is also self-defeating, reducing tax revenues to the state and thereby worsening the sovereign debt crisis. The result is fiscal heroin: worsening finances leading to greater dependencies on the Eurozone creditors (and, ultimately, the IMF) who claim to be Spain’s saviours. Spain remains firmly on course to miss its deficit-reduction target.

The underlying problems with the Spanish banks, meanwhile, remain unaddressed. The majority of the current and former cajas are insolvent, having pumped up a massive property bubble. The real culprit here is a form of crony capitalism, in which political appointees from the country’s two main parties (the governing right-wing Partido Popular, and the centre-left PSOE opposition) governed the cajas, lending irresponsibly to bolster their local prestige and pocket huge bonuses (and kickbacks) from property deals. This rendered the cajas vulnerable, and when the European economy hit a crisis, the bubble burst.

The banks then masked this problem by manipulating the value of the property on their books – engaging in a series of evictions, but then keeping huge stocks of unsold property on their books so as to not have to write down the actual value of their liabilities. The recapitalisation of Bankia eased open the lid on this practice, and the current bailout (in anticipation of audits by the IMF and Spanish state) are lifting it right off.

The bankers have walked away with huge bonuses, while over 400,000 families have lost their homes but face continued repayments on properties they no longer own. And yet, astonishingly, no one has been held accountable and Spanish politicians, notably the governing PP, are blocking investigations. A proper investigation, as is demanded by the Spanish indignado movements, could contribute to a collapse in confidence in the two-party system. Many in the movements (including myself) would argue that’s a good thing, and one which should be accompanied by taxation and legal cases that target the “1 per cent” from the political and banking elites who caused the crisis.

But the bailout’s effects are not simply limited to Spain. In the short term, measures to shore up the Spanish banks are likely to lead to renewed pressure on the Italian government, widely viewed by markets as the next domino in line for collapse. That, in turn, would require that the Eurozone finally faces up to its existential crisis, since the ESM (and even less so the EFSF) simply do not have the funds to cope with the “bailout” of Italy and Spain, the region’s third and fourth largest economies. In short, this looks like the endgame for the Eurozone in its current form.

There are still ways out of the immediate crisis, even within the limited terms of economic theory. The ECB could act as a lender of last resort; European-wide bonds could finally be issued, in recognition that the whole of the Eurozone bears responsibility for the problems afflicting Southern Europe and Ireland. Martin Wolf of the Financial Times, an orthodox cheerleader for globalisation in the boom years, has consistently called the European crisis right, and was insightful once again in an editorial comment last week:

“Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events. Perhaps the panic will vanish. But investors who are buying bonds at current rates are indicating a deep aversion to the downside risks. Policy makers must eliminate this panic, not stoke it.”

In the eurozone, they are failing to do so. If those with good credit refuse to support those under pressure, when the latter cannot save themselves, the system will surely perish. Nobody knows what damage this would do to the world economy. But who wants to find out?

The rhetoric coming from Berlin, and some other northern European capitals, suggests that we are about to find out. Any “rescue” worth its salt has to be European-wide or not at all, and until that happens then the bailouts are going to be part of the problem and not the solution. At this point, the best bargaining chip that Spain and other southern European countries have is that the debts are big enough to collapse the whole Eurozone system – and Europe-wide solidarity and responsibility.

Inside Spain, meanwhile, there’s a stronger desire than ever for the crony capitalists and politicians to be held responsible. Advocating a Europeanisation of the debt only addresses the crisis but, as the indignados have repeatedly claimed, No es la crisis, es el sistema (it’s not the crisis, it is the system). In the short term, politicians rescuing cajas that failed in large part due to the shoddy lending practices exacerbated by management boards stuffed with political appointees. The state then takes responsibility for their debts, in the process taking on more debt, with an eye to then selling on the newly “clean” banks to the private sector.

This was how the Bankia bailout was meant to work and, astonishingly, the same idea still holds sway. The losses are paid for with public money, yet any benefits go into private hands. Meanwhile, the financial system goes on much as before, creating new incentives for speculative wealth and crony capitalism while the majority of people are left to pay to clean up the mess.

What is needed, instead, is the reverse – a financial system that is accountable to people, not financial speculators or corrupt politicians and bankers. That means a “clean up” that identifies the responsibility of politicians and the bankers themselves and makes them culpable, both in terms of windfall taxes to recuperate money, and in front of courts of law. This requires debt audits to identify responsibility for damaging lending practices and criminal charges for the bankers who cooked the books.

None of this is likely to be granted easily by the bankers and politicians who got us into this mess. But as the streets start to echo once more with the sound of banging pots and pans, it’s time to revive the slogan that accompanied the caceroladas in Argentina: “Kick them all out, not a single one should stay.”

Fire. Violence. Tear gas. Rubber bullets. That’s the image of Barcelona that’s beaming out across much of the Spanish and global media about M-29, the 29 March general strike. My experience, and those of many protesting here, was a whole lot less dramatic – but possibly more symptomatic of the widespread collective action against austerity that is spreading here. I didn’t go looking for the moments of greatest drama, but here are a few impressions on how the day unfolded.

* Over 1,000 people joined the march from our neighbourhood (Sant Andreu) into town. It wasn’t the ‘usual suspects’. It was the regulars of our local high street – where most shops were closed – transplanted onto Meridiana, a major six-lane road into the centre of Barcelona. The good-humored march was one of numerous feeder marches that helped to bring the city to a standstill. The unions report an 800,000-strong demonstration. El Pais puts it at over 275,000.

* It isn’t hard to find evidence of clashes in the centre of town. Barricades had been lit on many of the road junctions around Diagonal, a well-off shopping district. These are being cleared away by street sweepers. But it’s the details that are telling here: the bin lorries are each placarded with ‘serveis minims’ [minimum service]. Most of the banks have had their windows smashed. They are cordoned off, but there is no attempt at a clean up here.

* There are many similarities with the 15M (‘indignados’) movement, but the most notable difference is the union banners. The 15M was organised on an explicitly ‘no parties, no unions’ platform, in direct response to the perceived betrayal by the unions in reaching a ‘social pact’ with the government on pension reform following a general strike in September 2010. One of the main unions (Unión General de Trabajadores, UGT) has close ties with the PSOE, the former government. With the Partido Popular (PP) now in power, the ideological lines are far sharper.

* Identifying as workers appears a stronger focus of this mobilisation too. In one five minute stretch through town, we pass two sets of civil servants against the cuts; fluorescent yellow-clad metro workers against cuts; trendily-dressed Macba (Museu d’Art Contemporani de Barcelona, the contemporary art museum) workers against cuts; and skateboarders against cuts. At least, I presume they were against the cuts too. They may have just been enjoying the opportunities afforded by the car-free streets.

* A lot of teargas was fired, and a lot of bins were burnt. But around these flashpoints, a whole day of striking has moments of calm, conversation and boredom. These are also opportunities to exchange stories. An art activist workshop (‘How to end evil’) has been taking place all week to spread creative resistance ideas. Amongst other stories, I hear about one workshop led by a collective who have identified a memory disorder called Memetro: its most prominent side effect is that the individual is incapable of remembering that it is the social norm to pay for public transport. This disorder may possibly caused by the development of a personal defense mechanism. This often occurs after a traumatic event, such as the unfair rise in fares, bad operations, or any other inconvenience to the continual problem of moving around.

I also hear about laoiflautas, a pensioners’ group who occupied the offices of the Fomento Del Trabajo Nacional (the employers’ association).

* Energy consumption is one of the main measures being used by the media to gauge the effectiveness of the strike. It is reportedly down by a quarter on the day, suggesting a significant drop in economic activity. I also hear of cases where PP councils have ordered for the streetlights to be turned on in the day to boost consumption. The Spanish right-wing are rarely subtle.

* The general strike was called to protest the new labour law, which makes it easier for companies to lay people off, cut their wages and change their employment conditions, and reduces the capacity of unions for collective bargaining. But this is not simply a labour dispute – it is a societal one. It is about austerity, democracy, and the financial system.

* These conversations carry on to the soundtrack of police firing teargas and, I hear later, rubber bullets – plus the occasional firework and firecracker burst from our side. There’s a barricade on fire next to El Corte Ingles, the largest department store on Placa Catalunya. I’m close enough to feel the ripples of baton charges, with people occasionally running for safety, but don’t move towards it or away from it as I’m not feeling tempted to report first hand on the clashes. A lot of it’s theatrics, mixed with the usual police brutality. But the bigger story is the escalating challenge to the imposition of austerity. With deeper cuts scheduled to be announced tomorrow, the resistance will only grow.

A fairy with a broomstick is sweeping the Puerta del Sol, Madrid’s central square. In front of her, a handful of weather-beaten activists are dispensing information from what looks like an upturned ship, a semi-permanent legacy from the occupation that began here on 15 May (M15). Strip away some of the tourists, and this scene could have been plucked from anywhere in the decade-long back catalogue of alter-globalisation movements.

Fast-forward five hours and Sol is full of demonstrators, hundreds of whom have walked here from across Spain. Six marches have converged from across the city, with chants and banners directed against the political and financial system. The targets included a corrupt political class, with chants of ‘No hay pan para tanto chorizo!’ (there isn’t bread for so many chorizo sausages, a colloquial reference to thieving politicians) and the injustice of austerity measures: ‘Vuestra crisis no la pagamos’ (‘We won’t pay for your crisis’). Branches of Spain’s largest banks are routinely denounced as ‘Cul-pa-ble!’ (guilty).

As we enter Sol, the banners read ‘Bienvenida dignidad’ (‘Welcome dignity’). There is a celebratory atmosphere as we sit on a packed square and listen to speaker after speaker recount their journey. Many of the gestures and practices adopted by the indignad@s (‘indignant’ or ‘outraged’) build upon and adapt those of existing activist networks: thousands of hands waggle along signalling agreement with the speeches, and a long weekend of activities culminates in the first M15 ‘social forum’. But it is abundantly clear that this movement has extended way beyond the usual suspects, and that its demands for ‘real democracy’ in the face of a remote two-party system that is tainted by corruption, an out of control financial sector, and swinging cuts in public services have tapped into a deep well of popular discontent.

The Sol protest marks the culmination of a month-long series of marches (‘Marcha Popular Indignada’), in some cases covering over 600 km in over 30 degree heat. We listen for several hours, as speaker after speaker reports of the generosity and warmth with which they have been received in small towns and villages across the country. A quarter of Spain’s population lives in rural areas, and the marchers report on how their route opened up countless new connections. For example, one speaker from Leon (in northwest Spain) recounts villages without drinking water, and a story of a local mayor who had raised his own salary by 200 per cent. These stories multiplied as marchers traversed the country, covering around 20 km by foot in the mornings, and spending the afternoons and evenings in dialogue with their hosts. Sol was the goal, but the journey was more important than the destination.

While the marchers were predominantly young, those present on the square and at the subsequent demonstration come from all generations and backgrounds. For example, our journey to Madrid was in a bus arranged by the Pensioners’ Commission of the Placa Catalunya camp, which had occupied Barcelona’s central square from May to July. It took in the arrival of the marches and a demonstration of over 30,000 people the next day, Sunday 24 July.

These returns to Sol made the headlines, but the bigger story is that the movement never really went away. On 20 July, the passage of an austerity by the right-wing Catalan government brought over 20,000 protesters onto the streets of Barcelona. Smaller but more numerous protests continue locally, co-ordinated through neighbourhood assemblies (around 25 in Barcelona alone), each of which is sub-divided into working commissions. In the last fortnight, for example, protesters have joined staff protesting the closure of two Barcelona hospitals (‘l’Esperança’ and ‘Dos de Maig’), which form part of a €2 billion package of health and education cuts across Catalunya in 2011. They have also resisted home repossessions resulting from the collapse of a housing bubble – in one case, meeting with violent police repression. Similar actions continue across Spain, with speakers on Sol reporting over 70 successful attempts to stop repossessions. There have also been actions to prevent indiscriminate immigrant checks, as documented by this widely-circulated video from Lavapies, a district of Madrid.

Summer is traditionally a quiet time for social movements, but a series of actions are planned for the ‘holidays’, including calls to ‘Toma la Playa’ (‘Take the Beach’, a play on the ‘Take the Square’ theme of one of the movement’s main rallying calls and coordinating sites) and ‘Toma la Montaña’ (‘Take the Mountain’), a call for a week long environmental protest camp at one of Spain’s largest open-cast coal mines.

Stoked by the success of the Madrid marches, a group set off from Puerta del Sol to Brussels, some 1,150 km away – a rather literal take on one of the movement’s key slogans, ‘Vamos despacio porque vamos lejos’ (‘We’re going slow because we’re going far’). They are scheduled to arrive in the de facto capital of the European Union a week ahead of a global demonstration on 15 October, called for by Democracy real Ya! (Real Democracy Now!), the platform that initiated the Spanish protests.

The day of action is one landmark in what many predictions suggest could be a ‘hot’ autumn. With the Eurozone crisis deepening, the ratings agencies on the offensive and Spanish public debt costing ever more to service (thanks to bond market speculation, amid moves to protect northern European banks at the expense of countries on the ‘periphery’), the Prime Minister José Zapatero has called an election for 20 November, in which he will not stand as a candidate. The right wing People’s Party (PP) is expected to win, while the populist right also registered gains in the regional elections last May that were the occasion of the first M15 protests – a sobering reminder that the progressive spirit of the M15 mobilisations is far from the only response to the current predicament.

In a system where increasing numbers distrust the political class, the results at the ballot box are also a landmark for a rapidly maturing movement. As the moderators of the 185,000-strong Facebook group #spanishrevolution dryly noted: ‘Elections brought forward to 20N. We should do something… no?’ And the banners heading to Sol –  ‘No es la crisis, es el sistema’ (‘It’s not the crisis, it’s the system’) -   can be read as a statement of intent as the movement marches on.

Like much else under the coalition government, Britain’s nuclear energy programme was set in motion by New Labour and continues unchanged, despite being opposed in the Lib Dem manifesto. Yet the case for nuclear is more overwhelming in its persistence than its attractiveness as a proposition. Nuclear reactors remain prohibitively expensive to build, notoriously subject to delay, expensive to secure, and impossible to clean up with any certainty. So why do they continue to attract the support of politicians once they gain power?

The lights that never go out

Like so much else in energy politics, fear of supply shortages is a crucial part of the explanation. ‘I have no intention of the lights going out on my watch,’ said the coalition’s energy and climate change secretary Chris Huhne in August, as he stated his support for a new reactor at Hinkley Point in Somerset, scheduled to open in 2018.

Yet this fails to tell the whole story. Huhne’s 2018 estimate is already a year later than the original plan for Hinkley, which is only at the ‘pre-application’ stage of the planning process. Long delays are the norm in nuclear development, and while the most optimistic estimates suggest that a new station could be ready by the end of the decade, the House of Commons trade and industry committee reported in 2006 that: ‘Experience in the UK to date has shown . . . an average construction period for existing nuclear power stations of almost 11 years.’

In 2007, the Department of Trade and Industry reported that a third of the UK’s electricity generation capacity would be retired over the next two decades. This would include two-thirds of the existing nuclear capacity (8GW), and almost a third of currently operating coal plants (another 8GW). Together with the projected growth in energy demand, the 2007 energy white paper estimated that the UK would need to add up to 35GW to the grid, with two-thirds of this already in place by 2020.

The bottom line is simple: a nuclear power programme that is intended to replace existing capacity will come too late to replace that capacity. So why, then, the enthusiasm for new nukes?

Playing the carbon card

In the aftermath of Chernobyl, the abiding image of the nuclear industry was the blue glow of an apocalyptic meltdown. In recent years, however, the nuclear industry has bathed itself in a green glow of climate friendliness. This greenwashing of nuclear power as a ‘solution’ to climate change is widespread.

Nuclear energy is not ‘carbon neutral’, although it is often treated as such. Uranium mining, enrichment and transport, as well as the construction and decommissioning of nuclear facilities, generate significant carbon dioxide emissions that are at least double those of wind power, according to Germany’s Öko-Institut. Yet these emissions are mostly outsourced, which keeps them off the radar of political decision makers whose field of policy vision seems to reach only as far as the UK coastlines where most nuclear reactors will be located.

That said, it is indisputably the case that nuclear power produces far fewer greenhouse gases than coal or gas, its main rivals as far as the large energy companies are concerned. On every other environmental measure, however, nuclear power remains as dirty as it is risky.

As Greenpeace puts it, ‘The UK now has enough radioactive waste to fill the Royal Albert Hall five times over.’ Despite a series of government reviews on decommissioning, there is still no long-term means to deal with radioactive waste safely, ensuring that it won’t contaminate water supplies or leak back into the environment and food chain.

This risk to future generations should be seen against a backdrop of the massive environmental damage that is already being caused. From Kazakhstan to Canada, uranium mining leaves a legacy of polluted land and water supplies. To produce around 25 tonnes of uranium, the amount needed to supply an average sized reactor for a year, entails the extraction of half a million tonnes of waste rock and more than 100,000 tonnes of mill tailings – which remain polluted for thousands of years.

On top of these environmental concerns, there remain major security risks – most notably from the stockpiling of plutonium, the key element in the creation of nuclear weapons – and significant doubts about the economic viability of nuclear power.

The numbers game

The current construction budget of Britain’s new generation of nuclear power stations is estimated at around £50 billion, but these projected costs conceal as much as they reveal.

The nuclear industry has consistently underestimated the cost of building reactors. The projected costs of 75 nuclear reactors in the US amounted to $45 billion, but the actual costs once built were $145 billion, according to research by Greenpeace International. The high-profile Olkiluoto reactor in Finland, which was intended as the flagship of a ‘new generation’ of reactors, has seen a doubling in its estimated cost from EUR3 billion to EUR6 billion. The most recent reactor in the UK (at Sizewell B) was estimated at £1.7 billion, but ended up costing £3.7 billion.

This initial cost of building nuclear plants is way in excess of their fossil-fuel powered rivals, which poses serious questions about their economic viability. In the UK’s liberalised energy markets, the risk of investing in nuclear is simply too high, since the large upfront costs cannot necessarily be recouped in the current climate of fluctuating energy supply and prices. Studies that claim otherwise tend to manipulate the ‘discount rate’, which is the comparison between how much the plant costs, and how much money could otherwise have been accrued by leaving the money in the bank to gain interest. When proponents of nuclear power are showcasing its viability, this rate is set low. When they argue for subsidies, the rate is set higher.

The hidden hands behind the hidden hand

At present, much of the debate is focused on whether the UK government will provide public subsidies to build nuclear power stations. The coalition has continued the policy of the previous government in announcing that it won’t do so. Yet here, too, the devil lies in the detail.

The coalition agreement includes a commitment to a ‘floor price’ on the EU emissions trading scheme (EU ETS), which would be a thinly veiled subsidy. (The pledge also contains an implicit recognition, although a far from profound one, that the EU ETS is failing.) The rationale is that shoring up the price of carbon, which has fluctuated wildly since the inception of the EU ETS in 2005, would provide greater certainty in how to calculate the costs of pollution by fossil-fuel power stations.

The EU ETS treats nuclear as carbon-free, so it would stand to benefit from such a move. In practice, though, it looks distinctly unlikely that the government will be able to deliver on this promise in the context of an EU-wide scheme. If it does, the floor price is likely simply to be a carbon tax by another name. This, in turn, would have a far greater effect on the profitability of existing power stations than the likelihood of building new ones.

EDF, which is 85 per cent owned by the French government, is the main operator of nuclear power stations in the UK, having purchased British Energy (which runs eight of the 10 UK nuclear sites) in 2008. It is no surprise, then, that it has lobbied vociferously for a carbon floor price. It stands to gain a windfall of around £400 million per year (assuming a price of £10 per ton of CO2). If the price was set at £50 per ton, a level considered more ‘viable’ to incentivise investment in nuclear power, it would net EDF around £2 billion per year for its existing power stations.

Two even more significant subsidies already exist, moreover. As Peter Roche, of industry monitoring group No 2 Nuclear Power, explained to Red Pepper, ‘In the event of a nuclear accident, the nuclear operating companies don’t have to provide proper insurance. Beyond a certain level, the UK government underwrites the cleanup costs. Without this guarantee, or hidden subsidy, it is doubtful if anyone could afford to build new nuclear power stations.’

The costs of decommissioning existing nuclear waste have also fallen largely onto the state, as Chris Huhne lamented shortly after taking up his post as secretary of state in May. On finding a £4 billion budget hole relating to unavoidable nuclear decommissioning and waste costs, Huhne spoke of an ‘existential problem’ facing his department, which he told the Guardian was ‘not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things.’

Forced choices

Huhne’s conflicted conscience on nuclear power reflects the possibility that it could emerge as a wedge issue dividing opinion within the coalition. In a statement that reads like it was scripted by Private Eye, Huhne claims that he was never anti-nuclear and was simply ‘misunderstood’. Yet as recently as November 2007, he wrote: ‘Nuclear is a tried, tested and failed technology and the government must stop putting time, effort and subsidies into reviving this outdated industry.’

However, Huhne’s recent enthusiasm should not be ‘misunderstood’ either. A quick look at the right-wing press, or the outpourings of the Adam Smith Institute, shows that Huhne remains under fire for damaging the nuclear industry. They accuse the Lib Dems of being behind the cancellation of an £80 million loan to Sheffield Forgemasters to build nuclear power plant components, while the continued inclusion of nuclear power within the climate change levy is criticised as harming the nuclear industry. Changing the rules of this scheme, or cutting off renewable energy incentives such as the current feed-in tariff scheme, could fall within the terms of the coalition agreement without amounting to a new ‘subsidy’.

Ultimately, though, the strongest driver for new nuclear power stations is the perceived paucity of other options. Nuclear benefits from the perception that it is the worst form of energy except for all of the others. The key selling point of nuclear power is that it is a technology that is ideally suited to the provision of ‘baseload’ energy. Put simply, electricity usage fluctuates widely, but grid supply has to remain constant. Baseload is the ‘always on’ electricity production required to meet minimum levels of demand, which is supplemented by sources that are switched on and off as customer use fluctuates.

From the perspective of the energy industry, nuclear power is ideally suited to this purpose, with existing plants typically run at full throttle. Wind power, by contrast, is seen as being as fickle as the wind itself. It is too unreliable, says the industry, so even if the UK builds more turbines, these would need to be backed up by nuclear, coal or gas generation capacity. And in the case of gas, the UK government (like many of its European counterparts) is wary of over-reliance on Russia, a fear that was exacerbated by the gas dispute between Russia and Ukraine in 2009.

Yet is energy supply really such a forced choice? For one thing, nuclear power is not quite the ‘always on’ bedrock of reliability that its advocates claim. Aside from routine repairs and refuelling, there have been a series of safety shutdowns in the UK, which sometimes span years.

More generally, though, the concept of always-on baseload energy at the centre of electricity production reproduces the assumption that power must be sourced from large, grid-connected power systems. While it is true that wind power is variable, no one credibly suggests that the UK switch its entire capacity to wind. Variations in one renewable technology, along with enhanced energy storage capacity, can balance out another. A diversity of smaller energy sources – not all of which need electricity grid connections – not only enhances the flexibility of the system, but also reduces the significant losses of power through transmissions networks.

More than half of UK domestic greenhouse gas emissions arise from space heating, with a further fifth coming from heating water, according to the Centre for Alternative Technology’s Zero Carbon Britain report (see Red Pepper Aug/Sep 2010). An emphasis on better building regulations, including incentives for the retrofitting and insulation of old buildings, has been proven by numerous analyses to be both faster and more cost effective than building new power generating capacity. Regulatory weaknesses – compounded by the lobby efforts of the construction industry – play a large part in preventing it from happening.

The structure of the energy industry compounds these problems. In a liberalised electricity market, it is far more difficult than in a publicly owned system to negotiate ‘demand side management’ – a bargain struck with the largest industrial users to restrict their usage at peak hours for domestic consumption. On this point, it is Brussels rather than Westminster where the battle needs to be fought to regain public control (not simply ownership) of electricity as a public good.

Ultimately, though, the UK’s energy dilemma is about far more than the choice between one technology or another. These are not shifts that will be achieved by personal footprint counting. Nor will they be achieved by polite pressure on the coalition government – although some policies, such as ‘emissions performance standards’ on power producers (a far more effective means of limiting fossil-fuel emissions than carbon markets or taxes) are certainly worth pursuing. Rather, we will need to focus on how to achieve systemic changes in how goods are produced, traded and consumed. This may sound utopian, but it merely asks that we consider how the energy transitions of the past – from wood to coal and oil – have affected how goods are valued and produced, and apply those lessons to the creation of a world beyond fossil fuels and nuclear power.

Well, what did you expect? The problem with global climate negotiations is not simply one of short-term power politics, but is deeply ingrained in the flawed fabric of international climate negotiations. Copenhagen failed, but it is part of an ongoing process in which many of the key decisions – including the fate of potential new carbon markets – were postponed when it became clear that no deal was yet possible. This left heads of state clutching onto the Copenhagen Accord, a peculiar ‘no-deal deal’, while the outcome of up to four years of negotiations has been postponed until later this year.

A paper-thin ‘deal’

The Copenhagen Accord amounts to just two and a half pages of rather vacuous diplomatic ruminations. Its form is, perhaps, more expressive than its content. The cover page states merely that the signatories to the UN climate change convention will ‘take note of’ the accord – the kind of diplomatic language usually reserved for praise of the host country’s catering. An appendix containing two blank tables where emissions targets and other ‘mitigation’ actions remain to be listed is tacked onto the back, with unintended irony.

A closer look reveals no progress on emissions targets and finance, the main sticking points in most international climate negotiations. The accord ‘recognises’ the need to restrict global climate change to two degrees Celcius, but with no means or obligation to enforce this goal, this is little more than lip service. Adding up what has actually been pledged, meanwhile, reveals a very different picture.

Even the World Wildlife Fund, which tends to assume (despite mounting evidence to the contrary) that market-driven international climate policies work, calculates that the 15 to 19 per cent reductions that industrialised countries have so far promised by 2020 would amount to an increase in greenhouse gas emissions of between 4 and 10 per cent over 1990 levels, once a series of loopholes are taken into account.

The paucity of the reductions on offer is further disguised by long-term pledges – an 80 per cent reduction for industrialised countries by 2050 (compared to 1990 levels) is an oft-cited figure. Yet as Martin Khor, director of the South Centre, an intergovernmental think tank of developing countries, points out, this would allow developed countries such as the US to continue polluting at two to five times the rate of their Southern counterparts.

The headline pledges of billions in new climate financing prove to be equally illusory. The Copenhagen Accord promises a US$10 billion per year new climate change fund will be set up between 2010 and 2012, growing to US$100 billion per year by 2020. But the entire US$10 billion repackages existing aid commitments, the World Development Movement has found, with 50 per cent promised in the form of loans that would increase unjust debts. In the longer term, a significant proportion of what counts for the US$100 billion could include carbon market revenues – hardly the same as public finance as reparations for a ‘climate debt’ (see Tim Jones, Red Pepper Dec/Jan).

Significant questions remain, too, regarding who would control such funds, with the US and Japan leading a charge to channel a significant proportion of this money through the World Bank. As the bank’s largest shareholders, they could then exert considerable influence as to how such money was spent.

The blame game

No sooner had the non-deal been struck than the blame game started. Ed Miliband, the UK’s climate change secretary, claimed in the Guardian that China had ‘hijacked’ the conference, while Gordon Brown villainised a handful of ‘intransigent’ countries, including Bolivia, Venezuela and Sudan, which chaired the G77 group of developing countries. Or, to put it another way, a series of countries refused to sign up to an accord that they considered a disaster for the climate and for any hope of achieving equity.

Frustration at the content of the accord was compounded by the heavy-handed interventions of the Danish presidency, which tore up the UN’s bureaucratic rulebook in attempting to engineer a ‘consensus’ where none existed. As the ‘official’ talks were driven into the buffers, the Danish government convened a meeting of 26 leaders in parallel with the official talks, overriding the other 167 parties to the convention.

This was the culmination of a series of informal meetings, hosted by the Danes, which were similar in form to the ‘mini-ministerials’ and ‘green rooms’ used by the WTO to set the agenda for global trade talks. Such meetings are typically coordinated by a grouping of rich, industrialised countries, with the participation of a regionally balanced but unrepresentative selection of developing nations.

Copenhagen was no different. While there was significant dissent – led by the ALBA grouping of nine Latin American and Caribbean states, which decried a process that ‘violated all the principles of multilateralism and the United Nations charter’ – efforts are now underway to harden the legal status of the accord. As UK climate change secretary Ed Miliband put it at the close of the Copenhagen talks, countries are being encouraged to sign on ‘so the money can start flowing’, a scarcely-veiled bribe.

Deeper divisions

It would be short-sighted to lay the blame for divisions solely at the door of the former colonial powers, however. While the failures of Copenhagen rest, ultimately, in the failure of industrialised countries to take responsibility for tackling climate change, the Copenhagen Accord also gained traction because of the support of the so-called BASIC countries: Brazil, South Africa, India and China.

This reaffirms the risks of relying on political elites to secure a just framework for global climate politics. As Praful Bidwai, journalist and author of An India That Can Say Yes, puts it, Copenhagen revealed ‘a gaping divide between India’s underprivileged and elite’. The latter consented to an ineffective framework that can feed their burgeoning consumption of luxury goods, while sacrificing the type of effective, equitable deal that would most help the country’s rural poor, who stand to be battered hardest by the effects of climate change.

To tackle this divide requires a more fundamental rethink in the basic framework of the terms on which global climate negotiations are conducted. Some of the stumbling blocks are intrinsic to the UN negotiating process itself, whose intergovernmental bias pits one country or bloc against another, with each defending a conception of ‘national interest’ that reflects elite class interests above the needs of the whole population.

This results in the exclusion of indigenous peoples and forest communities from formal participation in discussions, even as negotiators seek to parcel out and commodify their lands in the form of ‘forest carbon’.

The issue is not simply one of who negotiates or has access, however, but of how those discussions are framed and tackled. In this regard, carbon trading remains the central means for implementing emissions targets, as well as playing an increasing role in displacing sources of public finance for tackling climate change.

The dog that didn’t (yet) bark

The Copenhagen Accord makes little mention of carbon trading, but the market continues to develop apace. On 6 January, the UN’s clean development mechanism (CDM) registered its 2,000th carbon offset project, with the scheme still growing rapidly. The CDM is a scheme to develop ‘emissions-saving projects’, which supposedly compensate for continued pollution in industrialised countries in the North. In practice, the scheme shifts the responsibility for reducing emissions from North to South, with many of the projects exacerbating local social and environmental conflicts in their host locations.

The financiers who stand to gain from such a scheme were, unsurprisingly, disappointed by the outcomes of the Copenhagen summit. Yet the International Emissions Trading Association still managed a positive spin: the prospects of a ‘new market mechanism’ emerging from the negotiations remain ‘good’, while ‘the various Copenhagen discussions on improving the existing private sector financial mechanisms, in particular the CDM, made some progress.’

In this respect, Copenhagen simply saw the postponement of several decisions that remain on the cards at subsequent UN climate conferences, in Bonn (June), Mexico (November) and subsequently in South Africa in 2011. A range of geekily-technical possibilities remain on the table, but what they boil down to is the extension of carbon offsetting on a global scale.

There are three main drivers underlying these proposals. First, they would help wealthy, industrialised countries avoid having to make emissions reductions domestically – although the paucity of ambition in the Copenhagen Accord already sees to this task quite effectively. Second, they represent a means to shift responsibility for taking action to tackle climate change onto Southern countries. And third, from the point of view of financial speculators, new carbon markets increase the scope for financial speculation.

A broad range of new credits would provide the basis for new ‘carbon derivatives’ – similar to the structures that brought the derivatives market to its knees during the recent financial crisis. It is dangerous for the same reason: carbon markets sell a product that has no tangible underlying asset – fertile conditions for the creation of a new ‘bubble’. Traders don’t know exactly what they are selling. It becomes increasingly meaningless to talk about emissions reductions, since what is ‘reduced’ on paper is so far removed from any measurable change. Speculation becomes an end in itself. Meanwhile, emissions continue to rise.

For climate justice

Tackling carbon trading head on will remain crucial in climate debates – where the challenge remains to move beyond a global framework that translates the climate crisis into the language of neoliberal economics. Shifting ever larger sums through carbon markets is ultimately a means for stretching out the failed economic and industrial models that have helped to create the climate problem in the first case.

Away from Copenhagen’s faceless Bella conference centre, we need not follow this course. From ending fossil fuel subsidies to new industrial regulations, there are numerous steps that could mark out a different path to tackling climate change, from local to national and international levels. Policy alone will not be enough, though.

We need to rethink energy production, industry and agriculture in ways that promote and rediscover locally-adapted knowledge. And to achieve this, there are no short cuts around political organising – since the struggle against climate change is part of a larger fight for a more just, democratic and equal world.

Oscar Reyes is co-author with Tamra Gilbertson of Carbon Trading: how it works and why it fails, which can be downloaded free here

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For many campaigners and social movements, the little hope that remained at Copenhagen was thanks in part to the small Andean nation of Bolivia, for bravely taking on the bullying tactics of the large polluting nations, and for advocating an agenda that sought to integrate justice into global climate policy, writes Nick Buxton

Bolivia’s primary call was for the industrialised nations to recognise their climate debt to the South. This demand won the support of more than 100 nations and forced US chief negotiator Todd Stern onto the defensive: ‘We absolutely recognise our historic role in putting emissions in the atmosphere up there that are there now. But the sense of guilt or culpability or reparations – I just categorically reject that.’

As Pablo Solon aptly noted: ‘Admitting responsibility for the climate crisis without taking necessary actions to address it is like someone burning your house and then refusing to pay for it. Even if the fire was not started on purpose, the industrialised countries, through their inaction, have continued to add fuel to the fire.’

The Bolivian delegation put forward a proposal for a climate justice tribunal to judge perpetrators of climate damage and critiqued the use of free market mechanisms for resolving climate change. Bolivia made clear that without changing the economic system that causes climate change, we could never prevent the climate crisis. As President Evo Morales put it: ‘After hearing all the presentations, I am very surprised that everyone only talks about effects and not the causes. The cause is capitalism.’

Bolivia was clear that the blame for the failed conference lay with the rich industrialised countries. However, Morales also offered a way forward. As the conference concluded, he said: ‘As there are no agreements and there remain such profound ideological differences on the best way to confront the threats that threaten the world, it will be important that peoples mobilise and decide the policies that need to be developed.’

Specifically Morales proposed a global referendum, asking the public whether the vast sums spent on the military should be invested instead in conserving the planet. He is also convening an international peoples’ conference on climate change in April 2010 in Bolivia to put forward an alternative popular programme.