The commodification of natural resources turned out to be a feature of the long-run process of financial expansion that turned out to be characterized as the “financialization” of the capitalist economy where monopoly-finance capital increasingly affect social and economic reproduction.
In the last decades, market deregulation opened up new investment opportunities in sectors where private enterprises and foreign companies were formerly subject to restrictions such as mining, energy and telecommunications. In spite of some local resistance, market liberalization was introduced in many countries historically dominated by state-owned, vertically-integrated monopolies. In this setting, new energy investment patterns have been built in a context where institutional investors have assumed an active role in the selection of high profit potential projects for their portfolios. However, the outcomes of the 2008 global financial crisis put the question about the economic viability of new energy investments and policies on behalf of the reduction in economic activity and the risks of recession and higher unemployment rates.
Indeed, energy policies have been overwhelmed by tensions between governments’ actions, the transnational corporations’ strategies and the citizens’ expectations. As a result of the political ascendancy of financial institutions and transnational corporations, good governance turned out to be mainly based on macroeconomic stabilization and fiscal prudence. Under the expansion of monopoly- capital, in the context of financialization, greatest concerns have arisen, since energy policies and investments could pass down social and environmental safeguards. Decisions taken by private managers – strongly influenced by short- term returns– could turn out to challenge sustainable energy investment in the long-run. Assets, debts, price volatility, mergers and acquisitions overwhelmed investments in the energy industry and highlighted the tensions between the managers´ commitment to short-term returns and the long-run nature of investments in the energy sector.
In fact, social dynamics has been subordinated to the transnational and financial interests. In this interdependent global setting, the challenges and possibilities of “national policies” have turned out to be more complex. The scenario of the COP 20 that is currently being held in Lima, Peru, certainly reflects these tensions.
Energy policies could play a decisive role to support sustainable economic growth since they were articulated to economic and social policies. Restructuring energy policies require comprehensive solutions in order to include issues related to regulation and labor markets, technology and innovation, governance and politics, in addition to the environment and climate change.
Another development is possible? The answer certainly requires an interdisciplinary approach to energy policies in any reform of the economics curriculum.