ourEconomy: Analysis

Is it time to ration energy?

Newsflash: we already do. The question is, how can we do it in a way that works for everybody?

Laura Basu
25 June 2022, 12.00am
Renewables are essential but even they contain elements that are finite
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Karsten Würth/Unsplash. All rights reserved

Dark mutterings can be heard about the prospect of energy rationing looming ahead. Germany has already triggered its protocol for rationing gas in case economic warfare with Russia gets even worse. The UK government is doing its best to reassure the public that it does not plan to ration energy. But in case you haven’t noticed, we already do.

In the fifth richest country in the world, people are having to spend all day on the bus to stay warm because they can’t afford to heat their homes. Some 40% of Britons could fall into fuel poverty when the energy price cap rises in the autumn. Beyond British borders, 13% of the global population – mostly in Africa and South Asia – has no access to electricity at all. Meanwhile, the ultra-rich swan around on private jets and fly to the moon.

That’s rationing by price. If you can afford it, you can spaff away as much energy as you like, regardless of the harm it does to the Earth. If you can’t, forget about keeping warm or feeding your family. It may be the silliest form of rationing conceivable: we are failing to meet the basic needs of billions of people while still managing to burn down our planet. Talk about a lose-lose scenario.

Rationing of some form happens when an item is scarce. Even where there is no real scarcity, capitalism creates it out of thin air. Because if there’s no scarcity, there are no profits. Just look at the paywalls erected by big media companies for digital films, TV shows and music that cost zero to reproduce. Even the current food crisis isn’t actually about food scarcity: like the energy crisis, the food crisis is a crisis of affordability.

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But many natural resources ultimately are scarce, including energy. Fossil fuels will run out at some point. More importantly, we know we need to leave fossil fuels in the ground if we are to put the brakes on the climate catastrophe.

Of course, switching to renewable energy is a no-brainer, and needs to be done, like, yesterday. But even if we switched entirely to renewables tomorrow, that wouldn’t mean that energy supply is infinite. The rare earth elements needed to make solar panels and batteries are finite. Their extraction also tends to be associated with violence committed towards workers, communities and the environment. So if we care about those things, we need to place limits on extraction.

It makes zero sense that people are going cold while vast quantities of energy are being spaffed into the atmosphere

Drastically reducing energy waste is another obvious and painless solution that would reduce scarcity. There are mounting calls for government-supported home insulation schemes. A study from 2011 found that, just by redesigning passive systems in households, factories and transport, energy demand in those sectors could be reduced by 73%. It makes zero sense that people are having to go cold or hungry when such vast quantities of energy are being dumped into the atmosphere, for the benefit of no one.

We can all agree that our societies need to switch to renewables and be much more energy-efficient. But even then, it may be that we still need some form of rationing. The fact is, if we want a healthy planet, we need to live within the boundaries of what our planet can allow. And we need some way to make sure that we are doing that, beyond being as efficient as possible, shutting our eyes and praying that that is enough.

Enough already

Instead of focusing only on eco-efficiency, many environmental organisations propose the approach of ‘eco-sufficiency’. Eco-efficiency is about reducing the amount of carbon emissions or natural resources needed to produce a given thing. Sufficiency, on the other hand, is about using caps and rationing energy and resources to make sure that planetary boundaries are not overstepped. Eco-efficiency and sufficiency need not be mutually exclusive. Efficiency can help optimise wellbeing within the limits set by sufficiency.

According to these environmentalists, caps and rationing would be a fairer and more effective way of allocating energy than carbon taxes, which are popular green measures among those who wear suits to Zoom meetings. Carbon taxes are basically another form of rationing by price. And indeed, public opinion has been found to favour carbon quotas over carbon taxes.

Bringing in caps and rationing would require biophysical knowledge about where those planetary boundaries lie, plus political decisions about how fast to use up a resource and how to allocate it. Resource budgets could be brought in at both macro and microeconomic levels, for example at the level of both the state and the individual.

Where do those boundaries lie when it comes to energy? The Swiss Federal Institute of Technology proposes ‘the 2,000 watt society’, which implies a worldwide energy use per capita of 1,500 kgoe (kg of oil equivalent). It calculates that this would keep global warming below 2°C (which would still have disastrous consequences, just saying). The Global Commons Institute proposes a lower limit of 1,255 kgoe per person per year. That corresponds to a reduction of 35% compared to the world average of 1,921 kgoe.

That world average, though, masks massive inequalities. In 2015, the average North American used 6,887 kgoe per year, while the average European used 3,278 kgoe. The 2014 figures for Nicaraguans, Angolans and Bangladeshis were respectively, 596 kgoe, 545 kgoe and 229 kgoe. In reality, the gaps are even more stark, as these figures attribute the energy used to make exported products to the exporting rather than the importing country (which are often rich countries).

Inequalities within countries are also huge. The richest 1% of Americans, Luxemburgers, Singaporeans and Saudi Arabians emit 2,000 times more carbon than the lowest income groups of Honduras, Mozambique, Rwanda and Malawi.

Being told to half your energy use may enrage you. That’s because you live in the unfair world of rationing by price

So we don’t know precisely what the cap on energy use needs to be to stay within planetary boundaries, but taking the Global Commons Institute’s proposal, the average Bangladeshi could increase their energy use by five times and stay within healthy limits. The average European would have to cut their usage by more than half.

But what kind of life would we be leading if we were to stick to these limits? Could everyone in the world lead a good life using this level of energy, especially since the population is growing? If you are one of the many Europeans having to choose between heating and eating, being told that you should cut your energy use by half may understandably drive you into a fit of rage. But that’s because you currently live in the world of rationing by price.

A study from 2020 found that it is in fact possible to provide a decent standard of living to everyone in the world, while living within a healthy planetary boundary for energy use. The researchers attempted to calculate how much energy would be needed to provide a decent living standard to a population of ten billion, which we are predicted to reach by 2050.

They started with the premise that human needs are universal and finite, although they can be met in many different ways. This may seem like common sense to mere Earthlings like you and me but it flies in the face of mainstream economic thinking, which assumes that more is always better.

The scientists reasoned that for people to be able to flourish, they need: physical health and safety; clean air and water; adequate nutrition; social and political participation; a level of autonomy cultivated through education and learning; and time and space for creativity and play. To achieve this kind of wellbeing, we need material goods and services such as food, housing, heating and cooling, transport, phones, hospitals and schools.

Combining eco-efficiency and sufficiency approaches, the scientists conducting the study calculated that we could give these goods and services to a population of ten billion with just 40% of the total energy currently used, or between 310 and 440 kgoe per person per year. That’s three times less than the Global Commons Institute’s already ambitious proposal. In countries that are today’s highest per-capita consumers, this standard of living could be offered to all with energy cuts of 95%. This may evoke images of us living in caves, but these are the energy levels of the 1960s. Let’s face it, the swinging 60s were ‘cool’ (see what I did there with the climate gag?...).

What kind of limits on people do the scientists propose to achieve these cuts in energy demand? The model assumes that each person has a 10-metre squared living space plus communal space of 20 metres squared in a household of four people. Everyone gets to have a smartphone and there is one computer per household. People can travel around 10,000 kilometres per year, including just over 1,000 kilometres in plane travel – equating to one short to medium-haul flight every three years. Everyone gets 4kg of new clothing a year. A predominantly plant-based diet is assumed, with some meat.

The model includes healthcare for everyone, education for all five- to 19-year-olds, and a high-quality global communications network. Country-based adjustments are made, taking into account, for example, more heating or cooling requirements depending on climate.

Reading this, you might find this scenario very restrictive of your freedom, with limits placed on living space, the amount of meat you can eat and plane travel. But remember, the needs of ten billion people are being met in this model, while keeping within planetary boundaries. Even in the richest countries, millions of people are not reaching this standard of living under the current system of rationing by price, never mind the half of humanity who in 2020 were living on less than $7.40 a day. And, as a bonus, in this sufficiency scenario, we aren’t all going to suffer and die in the near future because our planet is burning down. Win-win, I’d say.

Breaking free

The absolutely crucial point about sufficiency, however, is that it’s carried out in the context of radical equality. In the scenario described above, everyone has access to the same basic goods and services, bar some small changes based on things such as variations in climate. It’s not a life of ‘eco-austerity’ for the many and one long Boris Johnson-style rave-up for the few.

Radical equality implies radical democracy. You are not going to achieve a fair allocation of the means of life if your politics consists of elites running the show, while everyone else turns up to a voting station like chumps every five years and goes through the motions of ballot casting. Communities need to actually make decisions about what they prioritise, how to produce what they need and how to allocate resources.

For Murray Bookchin, the founder of social ecology, this was the essence of freedom. In Bookchin’s view, freedom wasn’t about doing whatever the heck we want and letting others clean up the mess. Real freedom was the freedom to collectively determine how to satisfy our needs in a precious and finite world.

In a situation of radical equality and democracy, provisioning of the means of life needn’t be as rigid as the scenario in the study suggests. If your community wants to configure housing differently or eat a different diet, fine, as long as it is living in harmony with the rest of nature. If your household wants to switch out a couple of phones for an extra laptop, go ahead.

Who knows, in this magical realm, maybe we wouldn’t even care about phones or laptops because we’d be too busy dancing with dolphins. Jokes, but the point is that this is about imagining a different society here, where perhaps we wouldn’t feel the need to check Instagram 17,000 times a day or glue ourselves to computer screens for work.

This way, ‘equality’ doesn’t have to equate to ‘the same’. It means that all of us, with our different bodies, abilities and priorities, are getting what we need. Bookchin calls this the ‘equality of inequality’ – as opposed to the ‘inequality of equality’, whereby we are all given exactly the same by some top-down power regardless of our differences. Neither of these is to be confused with the ‘inequality of inequality’, which is the situation of rationing by price that we have now.

Trials for universal basic income and four-day weeks are proving to be overwhelming successes

Principles and policies for what a democratic and sustainable economy would look like are well established by this point. They include centring care work and the provision of essential goods and services, while phasing out destructive industries such as fossil fuels, the military and advertising; minimum and maximum incomes, universal basic incomes and services, and reduced working hours (whoop); taking ownership of key sectors such as housing, energy and food out of the hands of corporations and into the hands of communities; and ending neo-colonial global governance structures and paying reparations to colonised people.

These are sweeping changes but if you take a minute, you can see steps being taken towards them everywhere you look, sometimes in partnership with governments and sometimes under mortal threat from them.

The principle of the commons – the collective stewarding of the means of life by communities – has been sustaining humans for thousands of years, and natural commons still support two billion people worldwide. Solidarity economy projects exist across the globe, from free shops to donation-based kitchens.

Communities are practising radical democracy, from South Asia to Latin America. Trials for universal basic incomes and four-day weeks are proving to be overwhelming successes. Struggles for global justice are blazing on. Where democratic and municipal ownership of key resources is in place, it improves life for millions.

The quicker we realise that this is what is needed to be able to live well and avoid climate apocalypse, rather than paying 10p for plastic bags and feeling guilty for eating an avocado, the quicker we can move beyond rationing by price towards true freedom.

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