In a piece in the Guardian it’s asked whether a couple of rich entrepeneurs like Bloomberg, Brandson and Grantham could buy out all coal mines and shut them down to stop carbon, heavy metal and radioactive pollution for good..
The idea of buying out carbon fuel producers seems straightforward, but it really isn’t. In the case of coal right now it might work, because our dependence on coal has shrunk so much, only power plants, heavy industry and people heating their homes use coal. Close down the mines and these players will need to pay more because market supply drops.
It is easy to see that buying mines to close them down is not the favoured option for power plants and heavy industry, but it is also not the favoured option for banks. It means on the one side that banks can create less credit because there is no way to use the credit to produce (if production requires coal). Less credit because credit extended for projects involving coal fired power plants and heavy industry will become less viable.
The basic mechanism in our economy is that credit allows producers to buy the energy they need to produce, mine, transport their goods and services, and most of that energy is fossil fuel. Without that energy the credit in the system can’t be used to buy it, and production stops. Hyperinflation would be the effect if we shut down all fossil energy suppliers today. Money is intimately linked with the fossil fuel supply. This is what we call the carboncredit economic system.
Shutting down one carbon source may be possible, we may for instance simply not frack. But if the producers don’t shift their type of energy then the value of money, credit, is immediately affected. To replace the carbon type energy source with a renewable one we would again need (primarily) fossil fuels. Nobody is preparing to make renewable energy with renewables because the market is dominated by fossil credit. So just shutting down fossil energy only causes a drop in overal production, wealth, income.
Because shutting down coal means a dissapearance of cashflow however, one can predict that the banks will make sure it never happens.
How to do it right
To shut down coal it should be used to set up a renewable powered production line for coal replacing renewable energy sources. So the mines can be bought, and when that is done the coal is used to make these new energy sources. Coal is now used to make solar panels for instance. To make renewables with renewable energy should be the ultimate aim, and when that happens coal can be shut down, and renewables can grow without limitations, and at almost zero cost.
To put pressure on the coal, oil and gas industry money could be used to buy out experts in it. Money could be used to take apart the network supporting it, to smear people in it. But the fossil fuel industry is the most powerfull in the world, so the better strategy is to simply build up the renewable capacity, with money (which means you can use fossil fuels). Then coal, oil and gas can all die a slow and deserved death..