I’m still thinking about a news tidbit from two weeks ago, when giant oil corporation Shell bought little carbon-neutral electricity retailer, Powershop. People were mad about this, but not only because they wanted to avoid funding a huge fossil fuel company. The move revealed an uncomfortable truth: our decision to be ‘conscious consumers’ can never solve the climate crisis.
Let this story be a wake-up call to push responsibility back to whom it belongs, and start applying pressure where it actually works.
Recap: Shell Buys Powershop
In late November Shell announced it had bought clean energy retailer Powershop (owned by NZ’s Meridian Energy) for $729 million. Powershop had more than 185,000 customers in Australia, who had joined for it’s guarantee to provide 100% carbon neutral energy.
Unsurprisingly, customers were pissed that their money would now go to Shell, one of the most fossil-y of fossil fuel giants. Angry customers posted to Twitter about closing their accounts; competitor Amber Electric claimed it saw a 580% increase in signups in three days, with 80% coming from former Powershop customers.
For Shell, the decision to buy Powershop is about two things:
- Expanding the company’s presence in the Australian energy retail market (this is the first time Shell will sell electricity to residential customers), and;
- Adding to their renewable credentials, and ambition to provide “clean-power-as-a-service”
On the Powershop side of things, a spokesperson told the Guardian that they “consider this sale as a positive for both [Powershop and its customers]… Shell Energy’s vision is to significantly invest in a transition to a cleaner energy future.”
As part of the deal, investment management company Infrastructure Capital Group bought Meridian’s renewable energy assets in Australia – wind farms and hydropower stations.
The Problem with ‘Consumer Choice’
The story illustrates the problem with the idea of ‘consumer choice’ as form of climate action.
Here, a large group of consumers had already chosen a specific electricity retailer, clearly signalling with their wallets that they wanted renewable energy. But their intention was neutralised by a single business deal – the diversion of money away from fossil fuels ended up flowing right back to a fossil fuel giant.
The idea that consumers can solve the climate crisis by making the ‘right’ purchases ignores the huge power imbalances within the system. The businesses we’re usually trying to avoid have so much money and power that they can outweigh and outvote (or more to the point, out-lobby) us at every turn.
As shown by the Shell-Powershop deal, if a giant notices they are losing customers to an ethical competitor they can simply buy all those customers back – there is no need to transform their own processes, so long as there is still profit to be made. Former Powershop customers could continue to jump from one carbon-neutral retailer to the next, and Shell could continue buying those smaller retailers until only fossil fuel companies remained. Despite the consumers’ best intentions, they would end up back at square one.
That’s the flaw of using capitalism as a tool for climate action – money and power beats out what’s safest and most ethical, every time.
Powershop used to be the power provider anyone who was serious about climate went with. It is a weird system we live in where you can build something green, and then it will be bought by one of the worst emitters, to make them look a little bit better.
— Rune Woldsnes (@woldsnews) November 22, 2021
Shifting Blame & Responsibility
Let’s not forget the very concept of a ‘personal carbon footprint’ was created for a BP advertising campaign in 2004. The goal was to convince regular people that carbon emissions were our responsibility, and therefore only our actions – not theirs – could make any real difference to the climate crisis. When the blame sits with us as consumers, it lets giant corporations off the hook for solving problems they create and perpetuate.
Once a giant like Shell owns a cleaner, more ethical competitor like Powershop, it can choose to:
- Seriously invest in carbon-neutral energy, using the acquisition as a starting point to transform its entire business and scaling up Powershop in the process;
- Simply run Powershop, using it to ‘greenwash’ the Shell brand but putting in no real effort to grow the business or the clean energy sector, or;
- Quietly close Powershop down (or remove it’s carbon-neutral guarantee), taking a clean competitor out of the picture and reducing the size of the clean-energy market.
Option A would be great – and it’s the angle Powershop is selling. For what it’s worth, Shell has recently bought a bunch of renewable energy companies as part of its “Powering Progress” strategy. But the emissions reductions targets included in that plan are too small to do anything. On top of that, they’re measured against 2016 levels – not 2003 levels as set out in the Paris Climate Agreement – and were only just set in October 2021. It makes a renewable transformation seem unlikely.
Options B and C, on the other hand, are strategies used over and over again by big business. See: Facebook buying WhatsApp, to eliminate competition for Facebook Messenger, or Amazon buying and then shutting down Diapers.com (it does this to a lot of competitors). This feels more consistent with some of the other decisions made by Shell, including appealing against a court ruling forcing it to cut emissions.
All the while, these businesses can ‘empower’ us to wield the power of our ‘consumer choice’… until eventually there is only one choice left, and it’s them.
*Editor’s Note: These are speculative concepts only – we do not know what Shell intends to do with its newly acquired asset, other than what has been indicated in the official statement.
WTF Do We Do, Then?
It’s true that there is no ethical consumption under capitalism. Although it may feel comforting to believe we can save the planet by making the ‘right’ purchases, in reality the power imbalance is just too great. Big business can outmanoeuvre us if they want to.
It should not be up to consumers to police business practices. Instead, adequate regulation is needed to ensure that any business is operating in a safe, ethical and fair way – whether that’s electricity generation or anything else.
Think that’s an unrealistic utopia? Food safety standards are already set, monitored and enforced through government and industry regulation. Just as it is not your responsibility to “vote with your dollar” for a brand of chips that won’t give you food poisoning, the same could apply to all industries for the safety of workers and consumers alike.
Shouldn’t we equally be able to pay our electricity bill without worrying about how the power was generated, or a cute outfit without having slave labour on our conscience?
We are not completely powerless, though. Our vote is our power, and pressuring the politicians that represent us to take meaningful action on climate is the #1 best thing we can do. Big business and politicians are on a much more even playing field, and together can implement radical changes that will make a real difference.
Beyond that, it’s ok to make the purchasing decisions that you’re comfortable with. While I’ll still move my Powershop account to another clean energy retailer, I don’t expect that choice to change the world.
Comments are closed.