Limiting climate devastation depends on whether we can rapidly and coherently undertake the managed implosion of fossil capital — the politically enforced extinction of the energetic mainstay of modern life, the vast web of infrastructure and finance that drives the extraction and combustion of oil and gas for profit. The shift from a fossil-based system to a net-zero future is not as simple as investing in green capital and infrastructure, even at a spectacular volume and rapid pace. If we are to actually transition, not merely gorge on new forms of clean energy in addition to oil and gas, fossil capital must be stranded and prematurely written down, isolated and amputated, with enormous potential value left unvalorised, all in a few short decades. The political question at the heart of decarbonisation then is: what architecture of investment and control can deliver this unprecedented implosion?  

The energy transition will require investment and divestment to be undertaken rapidly, often out of sync with existing capital depreciation and expenditure cycles, without primary concern for private profitability, and all with coherent sequencing to ensure there are not socially harmful shocks or inflationary pressures in the process. But market coordination — the institutional constellation currently organising energy production, which is premised on private control of investment, private ownership of capital and infrastructure, and the profit imperative to drive decision-making — cannot deliver this.  

Private investment, as Common Wealth has argued, is hampered by the profit motive, the liquidity preference or risk aversion in the face of fundamental uncertainty, fragmentation and misaligned decision-making and coordination, and a more abstract yet still fundamental inability to bear the operation and maintenance of a Frankenstein’s monster of two co-existing incongruous energy systems. The profit imperative means crucial investment decisions are based on expected profitability and project-specific hurdle rates, not a holistic of assessment of what is needed to rapidly scale a decarbonised and secure energy system; the liquidity preference undercuts the desire to invest in long-term or risky projects in favour of more liquid assets; and the fragmentation of decision-making undermines coherent sequencing and coordination of investment. These constitutive features necessarily inhibit both the scaling up of clean power and the winding down of fossil fuel production at the pace and scale the climate conjuncture demands.

Profit is what shapes investment decisions under capitalism. The drive to maximise value is therefore unsurprisingly the compulsive logic that determines the priorities and behaviours of fossil capital. Given that the stock of oil and gas generate consistently higher economic returns than the flow of the wind and sun, as Brett Christophers has meticulously evidenced, and as investment is organised by expected profitability, not price, this leads to an inevitable conclusion: as oil and gas remain far more profitable than renewables, and profit is the operating logic guiding investment, the industry will not voluntarily exit from extraction nor pivot at scale to clean power; the for-profit corporation – private or state-owned - will not prematurely strand enormous sums of fixed investment. Decarbonisation of our energy system will consequently not be authored by fossil capital; it will require political intervention to effect transformation.

We are caught in the widening gyre. There is a fatal contradiction between the requirements of sustainability and the demands of capitalist property relations: exclusive possession, privatisation of investment and, therefore, control of the future, a compulsive drive to accumulate for accumulation’s sake, growing centralisation and concentration, and the domination and exploitation of labour and nature for profit. As Andreas Malm and Wim Carton explain in Overshoot, the propertied are incentivised to exploit their possession of the earth regardless of the consequences for the planet. The corporate form shields them by offloading liabilities while they claim the enormous surplus value produced through their ownership stakes. This explains why investment in oil and gas continues at a ferocious pace and scale, despite it rapidly worsening the climate emergency. But more than that, capitalist property relations also act as fetters on the development of the productive forces contained within the flow of wind and solar: while state intervention has backstopped the rapid growth of the renewables sector, their lack of relative profitability comes into conflict with the striving for value maximisation (by both energy companies and the financial sector that lubricates them) meaning that investment in clean power consistently falls far short of what a rapid transition requires. Decarbonisation, therefore, requires us to rethink how the energy resources of the earth are owned and used, and overcome the operating logic and behaviours dominant property regimes set in motion. The precondition for change is clear: we must annul the possessive prerogatives of fossil capital, challenging, in Marx’s memorable phrase, “the right of the proprietors to exploit the earth’s surface, the bowels of the earth, the air and thereby the maintenance and development of life”.  Capitalist property rights must cede to the needs of planetary survival.

What are the tools with which this can be done, the means of a genuine transition to effect “a fundamental break with an otherwise irresistible logic of accumulation”? And how can these be applied to the North Sea? This was the focus of our first intervention of this year. The current Continental Shelf regime — including its system of tax reliefs on decommissioning costs — has the objective of maximising economic recovery of oil and gas (in other words, the process of extracting the most economic value from the UK's oil and gas reserves). As Chris Hayes, Melanie Brusseler and Adrienne Buller argue in the report, as long as the wind-down of these assets — its pacing, its sequencing and the relationships through which it is executed — is managed on the terms of profit-seeking companies, the result will be a disorderly divestment where workers and frontline communities pay the price. This is true regardless of whether the wind-down is driven by direct regulation to curb production, by market-imposed demand downstream of consumption changes, or by the eventual exhaustion of reserves. Ultimately, the scale and rapidly shrinking time horizon of decarbonisation mean the state will bear the costs and bring assets onto its balance sheet, even as holder of last resort, in any plausible scenario of absolute but managed production decline in the North Sea.

If market coordination of the North Sea impedes a smooth and just transition then its opposite — public coordination of investment and divestment, based on a managed phaseout, investment guided by energy security needs and democratic ownership of North Sea assets — is the means to manage the implosion of fossil capital while halting climate destruction, guaranteeing energy security, capitalising on the value of our resources, and facilitating a smooth, painless labour market adjustments.

Transforming ownership is, then, the most direct and effective route to reshape the organisation of production and investment in the North Sea. But socialisation must not just change the structure but also reshape the underlying social relations. If so, extending public control over privately-owned energy resources provides space to pursue a different approach: planning an orderly transition that privileges the meeting of need over market exchange, sustainability and energy security above profit maximisation and private accumulation. This reflects a central maxim of Common Wealth’s approach to the transition: decarbonisation at pace and scale now fundamentally depends upon the extent to which democratic planning displaces market coordination of investment. The ability to shape and make the transition must be taken out of private control. That requires a substantive, fundamental reshaping of economic coordination through and toward public planning and undertaking. As we have argued, “Democratic coordination, through tools of public ownership and investment, is not only the indispensable means through which to deliver the transition; it is an end in itself.”

Challenging the prerogatives of private property relations in the energy transition will be fiercely resisted, and not only by fossil capital. Fossil fuels are not just still at the core of our energy system, but as powerfully demonstrated by Adam Hanieh in Crude Capitalism, are deeply entangled in producing and sustaining contemporary capitalism. Oil’s imbrication in almost all facets of modern life is much deeper and more pervasive than many of the more optimistic narratives of the transition recognise. Think, for instance, of the enormous pile of financial assets — the trillions and trillions of dollars’ worth of bonds, equity, bank loans and so forth — that rest atop the commitment of the industry to extract and burn their fossil fuel reserves, and the powerful array of economic actors and financial interests who benefit. In other words, effecting a managed implosion of fossil capital is not just a challenge to the obdurate power of the oil and gas giants, it would confront forms of economic and geopolitical power that are connected to the ongoing expansion of the oil and gas industry.

Progressive forces, disorientated and scattered, groping for programme and popular strategy, appear helpless on the stage of history, lacking the means or strength to effect such an epochal transformation. But history moves in leaps; progress is not linear but erupts and lurches forward from the contradictions and crises of our unequal economic order. The challenge is to nurture and cohere out of the material of a frustrated, angry and demobilised public a coalition able to reassert the necessity — and possibility — of social control over the organisation and provision of essential production and consumption.  

One starting point for the energy transition might be to foreground the distributional struggle at stake: fossil capital is a social relation and economic mechanism for vast upward redistribution. Despite claims that the general public would ultimately benefit from the sector’s inflated profits via dividends and share buybacks, ground-breaking analysis by Isabella Weber and colleagues shows the reverse: the 2022 oil and gas crisis resulted in record fossil fuel profits globally (US$916 billion in 2022). Of that, 51 per cent of profits went to the wealthiest one per cent, while the bottom 50 per cent not only received just one per cent of the total, but ordinary people also bore the higher burden from increased, everyday costs. Yoking together an explanation of the cost of living crisis, a deep and vividly felt social injustice, and a clear and unpopular antagonist, a populism formed in opposition to the empire of fossil capital could form the basis for a new popular politics of energy. This will not be enough alone, but it is perhaps the nucleus of an emerging majority that can begin the existential task of wrestling control of our energetic future back from private power to put the needs of people and planet first.  

Dismantling fossil capital must start from a blunt assessment of where we are. At the start of 2025, days away from the second coming of Donald Trump, it is clear: we are failing. This is not to ignore important progress has been made in key sectors and geographies. But in the civilizational task of energetic transition we should not evade the stark reality of where we are, nor the unprecedented scale of the challenge ahead. If we are to meet that challenge and secure a thriving future — a future of social abundance founded on democratic stewardship of the energy commons — we must confront the ownership regime that sits behind and drives forward climate and nature breakdown: private property and fossil capital.