Price, Profit, and the Planet

Energy Transition, or Climate Quietism

I must confess that it is dispiriting to review a book in 2024 on “Why Capitalism Won’t Save the Planet,” as declared in the subtitle of Brett Christophers’ new release, The Price Is Wrong. At this point, there are seemingly as many publications pitching a version of this argument as there are leftists with access to a word processor. And yet, it is as doubtful that the average Verso reader needs convincing that capitalism, indeed, won’t save the planet as it is that some sorry Wall Street trader finds himself in an indie bookstore in Brooklyn, thumbs through The Price Is Wrong, and leaves convinced of its central thesis: markets are a “suboptimal” means for delivering the energy transition (xxx). Thus, dispiriting because, for all of its pomp, this swollen body of Marx-ish literature on climate change has made little difference in deferring the advance of ‘market-based solutions.’ Even more dispiriting because, as Christophers rightly points out, despite all the excitement around ‘net zero’ pledges, the rapid ballooning of renewable energy, and the era of green industrial policy purportedly converging upon us, nothing has halted global fossil fuel consumption, which remains “consistently increasing” (30). Lest we forget: today, the United States produces more oil and gas than ever under the helm of the most climate-conscious president in its history (Karma). As have countless books before it, then, The Price Is Wrong attempts to intervene into a seemingly impregnable political-economic orthodoxy, the reign of which is as supreme as it is maddeningly contradictory. Patently incapable of “saving the planet,” green capitalism dishes out little more than insults to our collective intelligence: pathetic, ineffective ‘carrots’ which have all but overboiled into a soft mush, serving no purpose other than to help us swallow down our seemingly insatiable thirst for fossil fuels.

Thus, again, arriving to this book review in low spirits, I am compelled before anything else to ask why we keep spilling ink to argue that “capitalism won’t save the planet” when it doesn’t seem to be making any difference and no one but us seems to be listening. Of course, a proper scholar like Christophers will make the case for his reader’s indulgence clear at the outset, and his is a version of this well-trodden path which is indeed, as I review below, “a bit different” (xxx). Nevertheless, it can be difficult to stay indulged when there remains in the corner of one’s eye what any honest account (of which Christophers’ is one) would recognize as worsening circumstances. Given the mounting, unmitigated urgency of our situation, it can thus be tempting to concede critical scruples in favor of solace in some specious sense of hard-nosed realism, to convince oneself of the pressing need to play ball with green finance and bourgeois technocrats for the sake of saving the planet (see Webber et al.; Sapinski, Buck, and Malm). This urge has no doubt reached a fever pitch today, precisely in light of the circumstances pinpointed by Christophers in the Introduction: the dramatic cheapening of clean, renewable energy, a solution which would thus seem to be already here and ready to save us. Indeed, if it had previously been possible to argue that decarbonization was too expensive for markets to facilitate (and, precisely for this reason, elicited arguments for the socialization of the energy sector), this line is no longer tenable today. According to “levelized cost of electricity” (LCOE) measures, wind and solar energy are by and large the cheapest sources of power generation available—at least in the Global North (115). To hell, then, with your anti-capitalist screeds! For God’s sake, there is a planet to save.

But here comes Christophers to point out the gravel in our shoe: evidently, cheap prices are not enough to stimulate the energy transition. Not only have investment levels in clean energy remained “bitterly disappointing and woefully inadequate” but, all the while, fossil fuel demand has surged to match whatever ‘clean’ growth renewables have mustered (xvii). In other words, while renewable, low-carbon energy supplies have ballooned over the past two decades, the proportion of global electricity generation derived from fossil fuels has remained essentially the same as it was in 1985, falling only slightly from 64 per cent then to 61 per cent in 2022 (7). Those insisting that, sooner or later, electricity markets will reward the participants who can produce it most cheaply have by no means retreated in reticence but have become all the more conniving, conjuring new impediments supposedly delaying the empirical validation of their “relative-prices thesis.” “If the data are not in fact erroneous,” Christophers diagnoses, “then the problem must be located in the extra-economic domain of politics, or planning, or both—it simply cannot be otherwise” (130). It is here, of course, where the state plays the foil to the heroic protagonist of capital: underinvestment in renewable energy testifies not to any objective economic roadblock, at least not any longer, but an army of petit-bureaucrats (and perhaps also fossil fuel lobbyists) gumming up the works. Hence, in a cruel irony, after decades of “government support” for renewable energy through price controls, tax credits, and direct subsidies, what is now being demanded by free marketeers is that regulators get out of the way and let the energy market find its efficient, optimal price.

In Christophers’ hands, repeating the “capitalism won’t save the planet” argument is thus merited insofar as it must now contend with this apparent change in circumstances, wherein the ecological contradictions of capitalism have purportedly been resolved with the prolongation of “cheap energy” past its fossil fuel-dated expiry (Moore). Moreover, he defends this argument in strictly economic terms—that is, without placing any blame on the caprice of politically motivated bad actors. As Christophers rightly notes, this in turn demands more of a clarification than a renovation, for the argument against green capitalism never in truth concerned price, at least not centrally, but profit. Green capitalists, in other words, will no doubt drive down costs under the compulsion of market competition, but they will do so only insofar as they believe it will allow them to reap a greater rate of profit. The “relative-prices thesis” thus rests on a fundamental misunderstanding of the nature of capitalist competition and, in turn, the specifically economic motivation for an energy transition. Now, it may seem as if (cost) price is so foundational to the calculation of profit that this is a distinction without a difference. Ceteris paribus, if solar and wind farms spend less on inputs while selling at the same price—in particular, a price reliably set by costlier conventional coal- and gas-powered generators—then they will make more money than the latter. But the issue is that there are many situations in which all other conditions do not remain the same with a change in input and, hence, lower costs do not necessarily yield greater profits. As The Price Is Wrong details at length, electricity is one glaring example where this is precisely the case.

While this short review cannot possibly do justice to the complexity of electricity markets deftly covered by Christophers over the course of nearly 400 pages, suffice it to say that the crux of his argument concerns the “bankability” of solar and wind farms. “Essentially,” Christophers writes, “there are not enough [wind and solar] projects characterized by a level of revenue risk that potential financiers deem to be acceptable—or, at least, projects in which financiers are prepared to invest at a cost of capital that developers, in their turn, are willing to pay” (177). The reasons for this discrepancy in “revenue risk” are manifold, but two general trends emerge over the course of the book. First, Christophers shows that, while national electricity sectors were once dominated by large-scale, vertically integrated firms, they have since succumbed to “neoliberalization,” namely, in the form of unbundling (i.e. the separation of industry activities like generation and transmission), de-monopolization, privatization, and marketization (39–40). There is great country-to-country variability in this economic restructuring, but one consistent tendency has been that the generation sector is disproportionately targeted for “neoliberalization,” in contrast to its transmission and distribution, which remain more integrated and, hence, less competitive. Consequently, monopolistic grid operators have been able to successfully capture a majority of the upside of cheapening electricity costs derived from renewables, while generators, by contrast, have been forced to compete with each other to skim ever-thinning margins off cratering energy prices. Competition upstream has indeed become so fierce that the displacement of costlier conventional generators has given way in some markets to a “cannibalization effect,” wherein renewables are pricing each other out of their own future economic viability (226). We have, in turn, another great irony of our burgeoning era of cheap, clean energy: “the particular industry constituency that the world is relying on to actually, physically, make the switch to renewables [i.e. the generation sector] is seemingly not the industry constituency that would stand most to gain economically from that switch” (147).

A second, related trend is that wind and solar farm developers rely heavily on external financing in order to cover the steep upfront costs of construction. This contrasts with the major fossil fuel companies, which usually finance capital expenditures not by taking on debt but by drawing funds from their own operating cash flow. Independent of legacy enterprises, solar and wind developers rarely possess such a luxury and, in turn, have become dependent on satisfying the expectations of their often “conservative and risk-averse” private lenders (175). And, as these financiers know well, the cost profile and subsequent revenue risk of renewable energy diverges significantly from fossil fuels. Because they constantly require new fuel inputs, conventional generators have their costs more evenly spread out over the lifespan of their facilities, whereas the operating costs of wind and solar farms are virtually zero (75). In turn, the rate of profit for the latter cannot be determined against costs incurred during generation but rather are determined against the debts remaining to be serviced. At the same time, the increased volatility of electricity prices makes the assessment of future revenue exceedingly difficult, particularly from the perspective of these “risk-averse” financiers. While this is also true for conventional generators, again, they have considerably less reliance on external financing and, moreover, their rate of profitability is more predictable because the costs of the latter adjust automatically to fuel prices, which themselves heavily impact electricity prices. Beholden to fixed costs of capital, this “inherent hedge” is absent in the renewable energy sector (180).

In sum, what Christophers reveals is that renewables continue to see underinvestment precisely insofar as lenders remain reluctant to invest, for fear of not reaping a satisfactory return—and that, moreover, these strictly economic circumstances have not and will not change simply because of falling costs. This points to another blind spot of the “relative-prices” thesis: government support for renewables was not merely about making them cost-competitive but, in addition, guaranteeing their “bankability.” Governments did not only subsidize costs, in other words, but also encouraged price stability through various “revenue support” schemes, e.g. “feed-in tariffs,” which have afforded generators fixed prices, or by setting minimum requirements for a portion of total electricity grid output to be renewably sourced (117–118). It should thus come as no surprise that recent attempts to remove government support have been met not with accolades from green investors eagerly awaiting the good tidings of a more efficient electricity market but, instead, capital’s quiet exit from financing the energy transition. When, for instance, the UK removed its renewables purchasing obligation scheme for onshore wind development in 2017, new capacity saw a “year-on-year decline of approximately 80 per cent” (163). The aversion of capital to market liberalization is quite clear: free to flow unencumbered by any ‘extra-economic’ distortions imposed by the state, financiers promptly deemed renewables to no longer be “bankable.”

On “Fictitious Commodities” and “Profit Palimpsests”

The Price Is Wrong thus presents an important defense of “why capitalism won’t save the planet,” justified against any charge of redundancy in light of the need to address new confusions surrounding the continuation of appallingly low levels of private investment in renewable energy. In the space that remains, however, I want to linger on the rather rushed appeal to which this argument leads and which, in my view, undermines the integrity of its core thesis. In particular, I find curious Christophers’ remark in the Conclusion that electricity is especially unsuitable for commodification. Drawing on Karl Polanyi, he insists it must instead be considered a “fictitious commodity” alongside the Austro-Hungarian sociologist’s more familiar examples of labor, land, and money. Unlike ‘real’ commodities expressly produced for exchange, Christophers writes, “fictitious commodities” do not have “marketization” “come naturally to them” (362). In turn, they become especially dependent on additional “props, rules, regulations and norms” to facilitate their exchange—much like, it would appear, the electricity markets reviewed by Christophers. Thus, in “[Polanyi’s] terms,” he argues, “electricity absolutely is [a fictitious commodity] too [. . .] A commodity by its nature, electricity is not” (362–363).

This specification of electricity as a “fictitious commodity” dramatically reduces the scope of the “capitalism won’t save the planet” argument. For one thing, electricity is certainly not what Polanyi had in mind. Labor, land, and money were for him fictitious commodities precisely because “production for exchange” was for them a logical contradiction: labor is “another name for a human activity which goes with life itself”; land is “only another name for nature, which is not produced by man”; and money is “merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking and state finance” (75–76). While there are of course unique obstacles to the commodification of electricity—particularly its (current) inability to be stored at industrial scale and the subsequent extremely complex requirements of matching supply and demand in real-time—in capitalist society, electricity is, in fact, produced with “commoditization in mind” (Christophers, 362). There is hence no logical contradiction in the statement that electricity is produced for exchange. While it is true that electricity need not be so produced, this is true of all use-values produced by humans. It is thus difficult to include electricity as another “fictitious commodity” without broadening its definition to the point of meaninglessness (362).

This leads to a more troubling oversight: the distinction between “fictitious” and “real” commodities is alien to Marx’s critique of political economy, which Christophers endorses as the “theoretical vantage point” necessary for reorienting the question of energy transition away from price and toward profit (136). For Marx, the contradiction between exchange-value and use-value is not isolated to any particular commodity or a group of “fictitious” commodities but is inherent to the commodity-form. Whether or not the commodity in question is ‘really’ produced for exchange is downstream of the problem of the adoption of the “commodity-form as the universal form of the product of labour” (Marx 1976 [1867], 152). The task, for Marx, was to unveil what was standing behind not just “fictitious” commodities but all commodities: that is, to explain the social arrangement within which the “products of mutually independent acts of labour, performed in isolation, can confront each other as commodities” (132). This is not to say that Marx did not pay special attention to uniquely “awkward” commodities, in Christophers’ terms (362), like land, labor, and money. He did, and surely he would also have had something to say about electricity had he remained alive to see its industrialization. But it seems to me that overemphasis on electricity’s quirks risks obscuring the core concern of Marx’s “theoretical vantage point,” which is to illuminate the social conditions and consequences of generalized commodity production. It is, after all, the study of these conditions that reveals to Marx how value emerges as the independent and universal measure of wealth and, in turn, receives its abstract and contradictory expression, as Christophers scrupulously documents, in the form of price (see Marx 1976 [1867], 196). Indeed, the contradictions of capitalist markets so eloquently detailed in The Price Is Wrong show precisely that it is nothing “inherent” to electricity at all but rather the social production of electricity as a commodity which makes the pricing mechanism “suboptimal.”

But the integrity of the “capitalism won’t save the planet” argument truly begins to buckle when this theoretical incoherency is compounded with another contentious claim Christophers makes at the outset, that climate change is merely accidental, rather than essential, to capital accumulation. What purportedly matters for capital, and hence for Christophers’ analysis, is not the concrete uses (and abuses) of the commodities produced but their exchange values, for it is only exchange which can bestow upon capital its prized possession of profit. Once again invoking Marx, Christophers insists that capitalism is thus not opposed to ecological sustainability in principle but merely indifferent to it, for the “substance” of “commodity production is ultimately immaterial to capital” (xxiii). While, in turn, Christophers concedes that “brown assets,” i.e. fossil fuels, do continue to enjoy a privileged place in the capital circuit, this is only because they are the assets that are already there and, thus, “what is there can continue to be valorized”:

Yet the colour remains strictly secondary. Capitalism’s existing brownness encourages further brownness only to the degree that that is the most profitable path. Indeed, capitalism’s oft-invoked ‘path dependence’ is itself fundamentally a phenomenon of profit palimpsests. The history of all hitherto existing capitalist societies, one might say, is the history of layers of exchange values, not ‘mere’ use values—as mediated, needless to say, by class struggle. (xxiv)

This claim, it is worth emphasizing, flies in the face of extant eco-Marxist literature, in particular the concept of the “metabolic rift,” which indelibly links capital’s abstraction of nature into value to ecological collapse (Foster). In turn, while his isolation of electricity as a “fictitious commodity” impedes what could have otherwise been a more expansive critique of the commodity-form, Christophers’ qualification that capitalism is indifferent to climate change undermines nothing less than the argument he directly inherits from the eco-Marxist tradition, i.e. that capitalism will not save the planet. Indeed, if it is all “ultimately immaterial” to capital, such that the best we can say is that electricity markets are, today, “suboptimal and need to be reconsidered,” perhaps the subtitle should have been “Why Capitalism Might Not Save the Planet” (xxx).

Notably, in defending his argument that what matters is not the “substance” of commodity production but profitability, Christophers cites Andreas Malm’s Fossil Capital, a book which does not agree with him that the predominance of fossil fuels is accidental to the self-expansion of capital. Malm goes so far as to revise Marx’s original formulation for the circuit of industrial capital into the “general formula of fossil capital,” under the conviction that, at a “certain stage in the historical development of capital, fossil fuels become a necessary material substratum for the production of surplus-value” (288). For his part, Malm documents a myriad of factors, both social and natural, which historically fed into the profitability of “fossil capital.” In particular, he stresses the “spatiotemporal profile” of coal: its uniformity, transportability, and ability to be stockpiled made coal much more physically pliable to the, no doubt, “immaterial” demands of the self-valorization of capital, especially in comparison to waterpower which, beholden to variable rates of flow in rivers that cannot be picked up and carried somewhere else, possessed none of these qualities (308). But it would appear, then, that capital’s concern for profitability is not so immaterial after all. Fossil fuels didn’t just happen to be more profitable: they possessed specific, predetermined characteristics that were advantageous to the production of value and that capital could neither reproduce nor find anywhere else. This specificity of coal, indeed, confirms Marx’s own suggestion that, in capital’s “reproduction as commodity,” the “particular nature of use value [. . .] appears as itself a determinant of the form and of the action of capital” (1973 [1858], 646). Capital, simply put, has never been as omnipotent, self-determined, or indifferent to its own concretization as Christophers suggests.

By way of conclusion, it is useful to remind ourselves of the difference between inevitability and necessity. Whether or not things could have turned out differently tells us nothing about the fact that they turned out in the way that they did, and that remains the center of Marx’s analysis. We must, in other words, take necessity not merely as synonym for inevitability but in its “full Hegelian sense,” as Geoff Mann and Joel Wainwright have glossed: “one that describes the conditions, dynamics, qualities, and forces that make our conjuncture what it is and not something else” (23). In turn, even if the aforementioned “metabolic rift” thesis is rejected—that is, even if one refutes the argument that ecological instability is an inevitable feature of capital accumulation, hence that capital is thus merely “indifferent” to its planetary circumstances—it is self-evidently the case that ecological instability, provoked through, among other things, the ongoing extraction of fossil fuels, necessarily determines our present.

Perhaps greater sensitivity to the distinction between inevitability and necessity would have prevented Christophers from extending a rather glib dismissal of any hope for reducing energy throughput, which, he writes, “simply is not going to happen, for all degrowthers’ imploring” (2024, 8). While it is always peculiar to find a student of Marx naturalizing a “merely historical necessity” (Marx 1973 [1858], 831), this knee-jerk reflex, I charge, runs flush with Christophers’ aforementioned insistence that the “substance” of “commodity production” is “ultimately immaterial to capital.” That is to say, if growth appears to Christophers as inevitable, it is perhaps because he has not sufficiently attended to the specific conditions of production standing behind its merely historical necessity—in truth, the imperative of ‘growth’ has never ceased to be a discursive, second-order mediation of capital accumulation. But stepping into that “hidden abode” would, of course, require much more needing to be said about “class struggle,” the invocation of which is not just a box to check off to keep one’s rapport with Marxists. Rather, it ought to elicit a critical interrogation, one which unfortunately never arrives in The Price Is Wrong, of the fact that capital’s “path dependencies” are not merely the “profit palimpsests” of inter-capitalist competition but an archive of the real, historical struggle of the producers of society against the domination of capital—including the subjection of the former to the latter’s “immaterial” imperative toward growth. Of course, one may retort that I am here simply describing another book. Perhaps, but without that book being this one, the argument that “capitalism won’t save the planet” sheds its most essential, and irreducibly political, import—something Marx absolutely did not forget while writing Capital—that is, a concrete answer to the question, if capitalism won’t save the planet, who will?

John Kendall is a Postdoctoral Scholar in Energy Geographies at the Pennsylvania State University. His current research focuses on the ongoing efforts of the Appalachian natural gas industry to adapt its infrastructure to meet the demands of the so-called ‘energy transition’. He completed his PhD in Geography at the University of Minnesota in May 2024.

Works Cited

1. Christophers, Brett. 2024. The Price Is Wrong: Why Capitalism Won’t Save the Planet. Verso, London and New York.
2. Foster, John Bellamy. 1999. “Marx’s theory of metabolic rift: Classical foundations for environmental sociology.” American Journal of Sociology 105(2), 366–405.
3. Karma, Rogé. 2023 (December 20). “Why the U.S. is pumping more oil than any other country in history.” The Atlantic. Accessed at: https://www.theatlantic.com/ideas/archive/2023/12/us-producing-more-oil-climate-change/676893/.
4. Malm, Andreas. 2015. Fossil Capital: The Rise of Steam Power and the Roots of Global Warming. Verso, London and New York.
5. Mann, Geoff and Joel Wainwright. 2018. Climate Leviathan: A Political Theory of our Planetary Future. Verso, London and New York.
6. Marx, Karl. 1973 (1858). Grundrisse: Introduction to the Critique of Political Economy. Translated by Martin Nicolaus. Vintage, New York.
7. Marx, Karl. 1976 (1867). Capital: A Critique of Political Economy. Volume One. Translated by Ben Fowkes. Penguin Books, London.
8. Moore, Jason W. 2015. Capitalism in the Web of Life: Ecology and the Accumulation of Capital. Verso, London and New York.
9. Polanyi, Karl. 2001 (1944). The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press, Boston.
10. Sapinski, J.P., Holly Buck, and Andreas Malm (eds.). 2020. Has It Come to This? The Promises and Perils of Geoengineering on the Brink. Rutgers University Press, New Brunswick, Camden, and Newark, New Jersey, and London.
11. Webber, Sophie, Sara Nelson, Nate Millington, Gareth Bryant, and Patrick Bigger. 2022. “Financing reparative climate infrastructures: Capital switching, repair, and decommodification.” Antipode 54(3), 934–958.