As the climate crisis deepens, arguments for market solutions are still growing – but the truth is that capitalism is fundamentally incapable of overseeing the radical shift we need.

The primary argument invoked for market-based solutions to climate crisis is cost efficiency; less attention is devoted to whether they deliver on their purported target outcomes. (Holloway / Getty Images)

The following is an adapted extract from The Value of a Whale: On the Illusions of Green Capitalism by Adrienne Buller, published by Manchester University Press.

In February 2022, the Intergovernmental Panel on Climate Change published its latest summary of the impacts of our rapidly changing climate. It is a vast document, reaching nearly 3,700 pages compiling all available evidence on the myriad transformations, insecurities and catastrophes both looming on the horizon and already affecting many around the world. In thousands of pages of scientific findings, it might be easy for essential points to be lost. Fortunately, the report’s final line offers no shortage of clarity: ‘The cumulative scientific evidence is unequivocal … Any further delay in concerted anticipatory global action on adaptation and mitigation will miss a brief and rapidly closing window of opportunity to secure a liveable and sustainable future for all (very high confidence).’

This was not the only revelation buried in the report’s pages. For the first time, the IPCC acknowledged the role of the private sector in fomenting not only misinformation on the climate crisis, but another phenomenon, which it termed ‘maladaptation’. In the words of the report’s authors, maladaptation describes those actions that may be designed to help mitigate or adapt to a changing climate, but in doing so ‘lead to increased risk of adverse climate-related outcomes, including via increased greenhouse gas emissions, increased or shifted vulnerability to climate change, more inequitable outcomes, or diminished welfare, now or in the future.’ Whether by compromising livelihoods or accelerating biodiversity loss, maladaptive responses ‘can create lock-ins of vulnerability, exposure and risks that are difficult and expensive to change and exacerbate existing inequalities’. In most cases, the authors argue, maladaptation is likely to be an ‘unintended consequence’. In a sense, the authors described (unintentionally or otherwise) the trouble with green capitalism.

Given the urgency of the context and the weight of politics supporting the systems and ideas underlying the green capitalist framework, should we accept green capitalist solutions? Is something—anything—better than nothing? If, in curbing emissions or protecting biodiversity, some financiers and development firms make an exorbitant profit, is that really so big a problem as to merit scrapping the whole project? We live in a society structured and defined by capitalist relations, and the idea that market-based solutions are the best and most pragmatic path to resolving most problems is powerfully ingrained common sense. Asset management firms and other large corporate interests have outsized power in shaping the perspectives of governments and international institutions. This makes any programme for confronting these interests an uphill battle, which must advance across incredibly unfavourable terrain. At the same time, ecological crisis is at every turn advancing along the fastest trajectories scientists have offered. Time is not a luxury we can afford.

To answer this question, it first helps to establish criteria for what constitutes a ‘solution’ worth pursuing. Throughout this book I have evaluated green capitalist solutions against what I believe to be two essential criteria. The first, with which I’m confident anyone concerned with ecological crisis will agree, is that a solution must have a material impact: it must actually slow or reverse the industrial flow of emissions into the atmosphere or the collapse of biodiversity; failing this, it must reduce vulnerability to the impacts of these processes or contribute to adaptation. Crucially, it must accomplish one of these tasks on a timescale that reflects the urgency of accelerating ecological crisis.

Second, and perhaps more divisively, it must contribute to necessarily radical shifts in the distributions of wealth, consumption and power in the global economy. As I have previously argued, this isn’t a question of equality or justice in a moralising sense. Both of these are worth pursuing in their own right. To many (myself included), this makes meeting them a necessarily high bar for any approach to addressing these challenges. However, even for those interested solely in the question of effectiveness—that is, does a solution reduce emissions or ecological degradation—achieving these, as has been argued throughout this book, is also a practical necessity.

The evidence that affluent consumption is the primary driver of ecological crisis is expansive. While technological progress has, to date, produced some reductions in material throughput and waste, these gains have been entirely negated by rising consumption. However, while affluent consumption matters in absolute terms, inequalities in these patterns of consumption and waste are just as critical. In part, this reflects the ‘zero-sum game’ of rising consumption: relative income is one of the strongest determinants of happiness, with the result that the forms and rates of consumption that signal one’s position are driven overwhelmingly by the super-affluent, and in turn drive consumption up across the board with diminishing returns to wellbeing. The need to address these inequalities also reflects the deepening extent to which the nature and scale of consumption and waste among the affluent demands ‘cheap’ and invisible land, resources and labour—whether this is dumping industrial refuse near communities of colour or shipping hundreds of containers of plastic waste from Canadian consumers to be dealt with by Malaysian labourers.

In this sense, the ‘freedom’ implied by consumption and choice within markets ultimately rests on the profound unfreedom of countless others, kept just out of sight. This is a strategy that is reaching the end of its road. The supply of these invisible people, ecologies and dumping sites for waste is rapidly dwindling. Indeed, as Jason Moore argues: ‘The end of cheap garbage may loom larger than the end of cheap resources.’ These then, are my criteria for evaluating any approach to confronting ecological crisis. The first assures we secure a present and a future that are safe and habitable. The second does this as well, while also trying to make that future one worth living in.

Do Green Capitalist Solutions Work?

The primary argument invoked in favour of market-based solutions to climate and ecological crisis is cost efficiency. Considerably less attention tends to be devoted to the urgent question of whether, in practice, these solutions have delivered on their purported target outcomes, from swiftly cutting emissions to restoring a biodiverse ecosystem. Perhaps this is for good reason: the evidence reviewed as to the material impact of existing green capitalist solutions offers little reason for optimism. Among the greatest triumphs of carbon pricing mechanisms, for instance, is the EU Emissions Trading System (ETS) which—while it reports emissions reductions of close to 40% within the sectors it covers—has, over 15 years, scarcely left a dent on the region’s overall emissions. Nor has it delivered the ‘innovations’ in decarbonised energy and industry assumed by carbon pricing advocates; rather, most gains to date have been the result of temporary transitions from coal to gas. Sustainable finance is pitched as a perfect alignment between the profit motive and altruism—doing well by doing good—yet for the moment it seems to be, at best, an immaterial exercise in branding, and at worst, an excuse for inaction from policymakers.

Furthermore, under the evolving conditions of asset manager capitalism, the role of the state has been firmly oriented toward de-risking and shepherding private sector profits, rather than using its capacities for direct investment and action. The evidence in favour of biodiversity offset programmes is perhaps the least compelling, thus far generating poor to catastrophic outcomes for biodiversity, while creating new opportunities to profit from new markets in conservation. But beyond the failure for these market mechanisms to drive substantial impacts to date, there are many reasons to believe they never will. In part, this reflects the pervasiveness of unsupported assumptions and biases, from neglecting the systemic embeddedness of fossil fuels in global systems of energy and production to prioritising cost efficiency over actual ecological outcomes. But it also reflects capitalism’s drive to externalise costs, such that all these efforts to ‘internalise’ climate and ecological damage to the market have and will continue to generate new and painful ‘externalities’. This is where the question of materiality begins to bleed into the question of justice.

Freedom, Democracy, Justice: The Illusions of Green Capitalism

In ecological crisis, capitalism confronts both an unprecedented threat to its fundamental operating logics, and an opportunity to turn (for a finite period) the mitigation of that threat into a new terrain for profit. Green capitalism, as defined here, reflects this blend of threat and opportunity, and is centred around two broad strategies for minimising the former while maximising the latter. The first strategy is to commodify and render market-compliant the governance of phenomena from carbon emissions to the ‘services’ provided to the economy by ecosystems and biodiversity. The second is to use the state as a facilitator of new market domains and as a ‘de-risker’ of private capital, in line with the Wall Street Consensus articulated by Daniela Gabor.

In lieu of public investment and capacity, green capitalist approaches thus advocate the use of state capacity—particularly for handling risk—to safeguard and shepherd private capital into previously undesirable areas through a heady blend of market making, incentive, and guarantee. In practice, these approaches operate in a somewhat blurred sequence, with the establishment of markets for trading emissions permits, for instance, immediately followed and supplanted by the market for derivatives and other financial products based on these new commodities, with financial risk often shifted, willingly, onto the state and public.

Within both of these strategies—and running through the numerous green capitalist policies and solutions explored in this book—is a central thread: the effort to privatise the response to ecological crisis. In other words, green capitalist solutions seek to transfer the complex, ethically and socially fraught, and inherently political questions presented by ecological crisis from democratically contestable terrain to the private authority of markets, with outcomes ultimately driven by the self-interest of rational actors motivated by profit. For disciples of ‘free market’ economic liberalism, the idea that green capitalism seeks to shift authority over the collective response to ecological crisis to the private sphere will appear as a grave misreading of the market and the price mechanism as the ultimate terrain of democracy. To quote Ludwig von Mises, among the most prominent free market thinkers: ‘The capitalist system of production is an economic democracy in which every penny gives a right to vote.’ In this view, the market is an innately democratic system, in which actors arrive freely as equals and make their voices heard through spending or withholding their money. As a result, the market is also an arbiter of justice and good democratic governance, as it penalises those businesses or actors whose actions or offerings are deemed undesirable.

Any casual observer of the political systems of the US or UK, among others, will understand immediately that this vision is a fantasy. The scale of economic power exercised by the vast corporate persons and financial firms that today dominate the global economy all but erases the power any individual has in making their voice heard. Indeed, corporations routinely have outsized sway in formal political democratic processes as well, with lobbying power and political donations often setting incredibly narrow terms within which politicians can operate. Distributions of wealth are radically unequal and their increasingly strict relationship to asset ownership makes the ever-elusive aspiration of ‘social mobility’ increasingly untenable. We produce more than enough food every day to feed everyone on Earth, yet each year over one billion tonnes is left to waste, as an estimated 800 million live in hunger and ‘chronic malnourishment’. The freedom to consume affordable goods is increasingly predicated on the reciprocal unfreedom and exploitation of those within the supply chains of those goods, from garment workers to seasonal agricultural labourers. It is difficult to maintain that this is a system defined by its promotion of democracy, genuine freedom, or justice.

In fairness, free market thinkers acknowledge that expansive inequalities exist and indeed that people may take issue with them; within the market-led value system, however, these are not problematic. To borrow again from Mises: ‘It is true that the various individuals have not the same power to vote. The richer man casts more ballots than the poorer fellow. But to be rich and to earn a higher income is, in the market economy, already the outcome of the previous election.’ Thus, the issue of the enormously unjust ‘pre-distribution’ of wealth and, correspondingly, democratic power, is deemed entirely fair—the reflection of democratic will previously exercised. Similarly, substantive equality is not of concern, provided the conditions of formal equality are met, such that the prince and pauper are both equally free to sleep beneath the bridges of Paris.

This relative disinterest in substantive inequality is integral rather than incidental to market-led economics and systems of governance. As theorist Stuart Hall wrote, this ‘liberal’ approach to governance embodies an inescapable tension ‘between its universalistic claims on behalf of all citizens and its alignment with the interests of particular sections of society; between its commitment to representative government and its doubts about universal democracy.’ It is a disinterest that also, ultimately, deals the strongest blow to the prospects of green capitalism as a viable or desirable programme for confronting ecological crisis. Vast tree planting projects in service of carbon offset demands are already driving major land grabs across many regions of the Global South, and their widespread uptake—in combination with other non-solutions such as massive scaling up of crops for bioenergy—is placing the stability of the global food supply at additional risk. Resistance to the perception of anti-democratic ‘elite’ climate politics perceived to place unjust burdens on the working poor is widespread (if not always in good faith), from the gilets jaunes in France to the UK parliament’s ‘Net Zero Scrutiny Group’. At the same time, the foregrounding of profit-motivated solutions risks exacerbating the very inequalities driving ecological crisis in the first instance. It is for this reason that the solutions of green capitalism—whether carbon pricing, ESG or habitat banking—are self-defeating.

So: should we accept green capitalist solutions? The answer, to me, is clear. Market-based solutions do not offer a path to safety for the world’s majority, let alone a future that is defined by collective abundance and wellbeing. At best, green capitalist solutions are a deadly distraction from the urgent task of actually slowing, reversing, and adapting to climate and ecological crisis; at worst, they are actively undermining our ability to do so.

Adrienne Buller’s The Value of a Whale: On the Illusions of Green Capitalism is published by Manchester University Press.

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