From climate change to economic change? Reflections on ‘feedback’

Abstract

'Feedback' from climate change into the economy is critical. But what kind of 'feedback'? Given capitalist structures and interstate rivalry in the global economy, there is little in the way of overall planning, and certainly no effective power to act for capitalism 'in general'. The fossil fuel bloc is deeply embedded in the economy, and is not afraid to press its advantage; the emerging renewable economy is gaining strength, but remains subordinate. Yet intensifying climate change and failing climate policy are creating new political pressures. This article addresses efforts to target fossil fuel corporates through divestment campaigns and argues the main 'feedback' to date is socio-political. It tracks how the threat of climate policy translates into 'transition risk' for investment strategy, and produces a growing loss of confidence in fossil capital. In this, we argue the climate contradictions of capitalist society have destructive effects but offer transformative potential. KEYWORDS Capitalism and climate; climate movements; fossil fuel sector; transition risk; divestment With decades of climate science we are fully aware of the impact of the global economy on climate change. There is, as we know, a direct correlation between global economic growth on the current carbon-intensive model, and rising global temperatures and associated climate disruption. But what is the impact of climate change on the economy, and what prospect is there for feedback to force economic decarbonization? On the face of it, with greenhouse gas emissions growing unabated and only limited decoupling of economic growth from emissions (Cohen et al., 2018; Global Carbon Project, 2019), the answer to that question has to be 'very little'. Persistent failure points to a deepseated contradiction between the current logic of economic development and socio-ecological stability. The structures of capitalist society are riven with internal contradiction, and these have both destructive effects and transformative potential. There is no significant self-adjustment underway; instead, socio-political feedback is forcing new forms of 'transition risk' into the fossil fuel economy, disrupting it in new and potentially transformative ways. The growing politicization of carbon-intensive development has indeed generated new economic antagonisms and transformations. A widening gulf has emerged between the fossil fuel economy and emerging renewable economies, sparking conflicts that reach from the streets and social media, to state structures, and to the centre of finance capital. Thirty-five of the world's largest banks have together invested US$2.7 trillion into fossil fuels since the Paris Agreement (Banktrack, 2020). Yet even J.P. Morgan, by far the largest investor in fossil fuels at about $70 billion annually has privately acknowledged that the globe is set on a 3.5°C trajectory of warming with no solution in sight and no ability to understand the economic impacts (Mackie & Murray, 2020, p. 13). Climate antagonism is

Economics and climate emergency

“…Note, figures can vary using per capita measures and consumption measures rather than production measures, but the general relation between GDP and emissions remains similar and the fact a few countries are responsible for the majority of emission remains the same. As Goodman and Anderson (2020) note, 65% of global emissions 1751-2010 were produced by 90 entities (of which two thirds were corporations), and 71% of emissions 1988-2015 were produced by 100 corporate and state entities. See Heede (2014) and Griffin (2017).…”

“…Like growth economies, postgrowth economies will have institutions that may be understood in terms of 'institutional forms'. (Koch & Buch-Hansen, 2020) This line of argument raises basic issues regarding transitions and the scope for constructive change, which is the subject of James Goodman and James Anderson's essay (Goodman & Anderson, 2020). Clearly, no one acts for or speaks on behalf of capitalism in general and this means that cumulative changes to capitalism based on climate issues experience complex feedback, which in turn leads to new political pressures.…”

Climate change and industrial relations: Reflections on an emerging field

“…The power resource approach, more often applied to unions, has been shown to be therefore, at least, as relevant to understanding the impact of employer associations on climate policy and industrial relations. Moreover, as in unions, capital is not homogenous, and as financial markets, driven by investment firms (Goodman and Anderson, 2021), embrace the climate challenge, and its potential financial windfalls, workplace and organisational climate change action are likely to become a theme of employer industrial strategies. There is an urgency for the field to explore the intersection between employer association, including the role of finance capital, climate, state policymaking, and how this junction may be reshaping industrial relations.…”

“…Research on the interconnections between employer associations and climate change has, to date, been limited. Employer and employer associations-focussed studies suggest that these actors are key drivers of green clauses in agreement making and workplace relations, which are often framed through the prism of corporate sustainability and reinforce managerial prerogative and intensify the labour process (Markey and McIvor, 2019; Moussu, 2020; Tufts, 2013). An examination of the influence of employer associations over Australian climate policy highlights how employer associations, particularly those represent mining and resource capital, have deployed various power resources to limit and even reverse climate action in Australia over a 30-year period (Goods and Ellem, 2022).…”

Climate, Society and Elemental Insurance

“…Our study contributes to research about the financialisation of natural environments, which refers to the assetisation of ecological metrics, such as extreme weather event and carbon emission data, and to the growing influence of finance in guiding political governance (Chiapello 2020;Goodman & Anderson 2020;Langley 2020;Ouma et al 2018). We focus specifically on an index insurance risk model that uses environmental data to design a social infrastructure for governing weather-related hazards.…”