The Value of a Whale

Adrienne Buller

Adrienne Buller stalks more tigers in this book than a maharajah on a shoot – it’s just a pity that some of them are paper tigers. This weakens the impact of what is otherwise a thoroughly researched and challenging analysis.

The book sets itself up as a critique of ‘green capitalism’. This, like all capitalism, is (said to be) concerned with appropriation and accumulation, pillaging resources, subordinating poor countries and people to the needs of rich ones, often with violence, driving ever higher inequality, and using the market as its primary instrument. This plays out in domains which include carbon pricing and offsetting (Chapter 2), the financial markets (Chapter 3), Environment, Social and Governance (ESG) programmes (Chapter 4), the ecological debt of rich countries to poor ones (Chapter 5), and the pricing of natural capital (Chapter 6). Remember: ‘green capitalism is a response to the collision of the accumulative drive of capitalist economies with the profound threat to returns, asset values and accumulation posed by deepening ecological crisis’.

The ecological crisis is real enough, and it is true that humankind cannot continue to consume more and more natural resources. It is also true that income and wealth inequality make things much worse. Buller provides rich detail on all of that. These arguments featured strongly in the debate on degrowth I curated last year in Development Policy Review, between Jason Hickel and Stephane Hallegatte (start here). As in that debate, however, it is helpful to abstract from the overall framing, and take the issues one by one.

So, carbon pricing – the ‘totemic solution’ of green capitalism. Buller argues that neither carbon taxes nor cap and trade schemes, like the EUEuropean Union Emissions Trading Scheme, can be shown to have delivered other than marginal cuts in emissions: in the case of the EETS, overall emissions have fallen a measly 3.8% over 15 years of operation. Political resistance comes from all points of the compass, and even when schemes are in place on a sufficiently robust scale, there are many obstacles to the resultant price signals driving a transfer of resources from high- to low-emitting sectors: for example, because the infrastructure to support renewable options is missing. Furthermore, Buller argues that carbon pricing has adverse distributional impacts, within and between countries. Nevertheless, ‘for constituents of the green capitalist alliance, from prominent billionaires to major corporations, the carbon price is a gradual and comparatively painless policy solution which preserves existing economic relations and structures while also offering a new route to accumulation within a competitive market.’

Offsetting. An obsession for green capitalism and an essential lubricant of carbon markets – but a ‘Wild West of trading, speculating and profit-making’ which makes little material impact. Projects like offsetting through tree-planting or dam-building routinely involve enclosing the land and resources of low income communities and countries: ‘this is, at its core, a neo-colonial project’.

Financial markets. Buller ‘identifies, within an increasingly finance-dominated global economy, a critical and historically recent force: the asset management industry.’ A small group of firms – Black Rock, Vanguard, State Street - manage assets in the tens of trillions and determine how capital is allocated. In general, Buller argues, they belong to a ‘deflationary coalition’: representing mainly a cohort of the richest people in the global North, they use both their voting power at company AGMs and their political influence to block additional expenditure on environment-friendly projects and green new deal proposals. The use of index-tracking and passive investing makes them even more conservative, for example in relation to divesting from the fossil fuel sector. Titans like Larry Fink, ceo of Black Rock, talk a good game on climate risk and ethical investing, but in the end advance ‘a response to the climate and nature crises defined by three related pillars: using the state to minimise financial risk; generating new and ideally state-backed opportunities for private investors through climate and environmental policy; and ensuring the aggregate stability and growth of asset prices.’

ESG and green finance. The three pillars play out in the world of green finance, where asset managers and others claim to steer investments towards greener options (the ‘portfolio’ approach), and also participate actively in company decision-making (the ‘stewardship’ approach). Buller argues that ‘greenwashing’ is prevalent in the ESG industry. Examples include oil firm Total, which issues sustainability-linked bonds, in which returns are linked to emissions – but only of production-related emissions, not those related to the burning of the fossil fuels extracted. The Glasgow Financial Alliance for Net Zero, launched at COP 26, is pilloried for extravagant and literally incredible claims about the potential funds that can be diverted to green investments, and for adhering to technocratic approaches like the monitoring and disclosure beloved of the ‘Wall St Consensus’: ‘a project’ Buller says, ‘for leveraging the public sector’s capacity to create new lucrative and low-risk opportunities for private investors, rather than using public funds to invest directly and holding these assets on public balance sheets.’ Investing and investment, Buller reminds us, are not the same thing.

Ecological debt. Buller catalogues legal, financial and institutional forces which disadvantage developing countries in general, and adds ‘unequal ecological exchange’ to the list: ‘wealthy countries exploit low-income economies as under-remunerated sources of the raw materials and cheap labour they demand, as well as ‘sinks’ for their waste and the environmental impacts of primary commodity production and extraction . . . This facilitates an ‘imperial mode of living’ among the comparatively affluent global population (largely but not exclusively located in Northern metropolitan centres), whose everyday existence requires an increasingly untenable exploitation of the resources and labour of unseen ‘elsewheres’.’ Reparations seem to be in order, not least in payments for Loss and Damage associated with climate change.

Natural capital. Nature is under threat. Buller is sceptical of green growth as a response, arguing that green technologies will increase the demand for scarce minerals like lithium, and therefore worsen environmental degradation. More generally, she sees no evidence that economic growth globally has been decoupled from resource use.  Can putting a price on nature - can valuing ecosystem services - offer an answer? The answer is ‘No’. Nature is too complex, and too valuable in different ways. Natural capital and ecosystem accounting is ‘a machine of commodification and financial speculation.’ Indeed, ‘the turn to market-based solutions for the most complex and urgent challenges of our time can . . . be viewed as a metastatic advance of neoliberal instincts.’ Inevitably, poor countries, the ‘elsewheres’ of the world, are the losers.

To summarise, then, most of the instruments developed and propagated under the aegis of green capitalism just do not work. But more than that, there is ‘a central thread: the effort to privatise the response to ecological crisis. . . . 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.’

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Adrienne Buller deliberately avoids making recommendations in the book – but it is not hard to imagine her preferred course of action. What, though, might be options while we wait for the overthrow of capitalism? I can see two avenues.

The first avenue is to find examples of good practice within the domains of green capitalism which Buller has identified, and which might suggest the improvability of the instruments. Counter-examples do not prove that all the negative cases have been misunderstood  - and, to be clear, Buller has found many negative cases. But positive cases do disprove the generalisation that all examples are malign. They might also demonstrate that not all the individuals involved have bad intentions. Frankly, as one example, it is hard to see Mark Carney, the former Governor of the Bank of England and the man behind the Glasgow Financial Alliance, as someone whose primary motivation is pillaging and subordinating poor countries; nor as someone who would be indifferent if that were shown to be the outcome of his work.

There are hints within the book. For example, it is disingenuous to say the European Emissions Trading Scheme has failed because overall emissions remain high. In fact, Buller herself acknowledges that emissions have fallen by over 40% in the sectors covered by the scheme. And the price of carbon in the EETS has risen sharply since the early days of the early 2000s, to over 95 euros/t in the summer of 2022. The EETS has been on a journey of gradual improvement; that this is so is evidenced by the current call from EUEuropean Union corporates for border taxes on imports from countries with lower standards.

Another source might be with the many cases catalogued by CDKN (of which I was the founding chair).  The website has dozens of cases in which local communities benefit from and are empowered by projects funded in one way or another by carbon markets: in India, Nepal, Ethiopia, Kenya, Colombia and many others. Examples include forestry and water management, urban waste, resilience, and much else.

A third source could be among the examples of monitoring and standard-setting that Aarti Krishnan and I collected for our work on ‘Counting Carbon’. We acknowledged the fact that standards are often developed in rich countries and imposed on poor countries and producers, giving rise to what Aarti called a ‘green squeeze’. But we also found examples of measurement and monitoring of carbon emissions being fully embedded in systems driving change at company level. Examples include Tata Steel, Swire Beverages, or the coffee and tea suppliers Bettys and Taylors. Most certification programmes embody action plans in their work.

To repeat. The overall balance of all the initiatives Adrienne Buller reviews may merit a fail. But individual cases can disprove generalisations. The evidence is not all negative. And that may give hope.

The second avenue to explore is one that Buller ignores altogether. In her focus on market mechanisms, she falls into the error of assuming that markets exist independently of Government policy and regulation. Actually, there is one place where regulations feature in her narrative, which is when she explains that reductions in emissions in California can be explained not by carbon pricing but by regulations like vehicle emission standards. Indeed. This is an important point. ‘Capitalism’, and certainly ‘green capitalism’, are not simply about untrammelled markets, but rather about markets embedded in a matrix of rules, regulations and policies, including fiscal policies. Vehicle, appliance and building standards, water and air quality rules, planning procedures, pricing regimes for different energy sources, carbon measurement and monitoring requirements, Government spending on research and development or nature conservation – all these shape action on climate change. They even structure the markets of which Buller is so critical.

That gives us an agenda. At the end of his debate on degrowth with Jason Hickel, Stephane Hallegatte concluded that ‘degrowth alone cannot stabilize climate change. Most of the action will be in reducing the carbon intensity of GDP, i.e. the amount of carbon emitted per USD 1 of GDPGross Domestic Product or consumption. To do that, policy will be key: ‘the key point . . . is that we do not need to know all the answers to start acting, because we have in front of us many opportunities to reduce the environmental footprint. We can start there.’ Quite so.

By the way, the value of a whale, according to the IMF, and based on the contribution of the whale to carbon sequestration and to ecotourism, is $US 2 million. We can agree that our engagement with the natural world cannot be delimited by that kind of calculus.