Environment
Sustainability and the political economy of welfare
Welfare is commonly understood in socio-economic terms of equity, highlighting distributive issues within growing capitalist economies. In times when the unequal distribution of wealth in the ‘advanced’ capitalist world has returned to levels of the 19th century, the question of whether we can and should ‘afford the rich’ is indeed central. The traditional response of welfare researchers – that issues of inequality can be solved by redistributing the primary incomes of capital and labour within economically growing economies – however, is not only difficult to achieve in an increasingly unfettered global capitalism but is also controversial. While GDP, income growth and rising material standards of living are normally not questioned as political priorities, there is growing evidence that Western production and consumption patterns and the associated welfare standards are not generalizable to the rest of the planet if environmental concerns are to be considered. For that to happen we would indeed need four to five Earths.
In an attempt to take planetary boundaries such as climate change, the nitrogen cycle, and biodiversity loss seriously, our new book Sustainability and the Political Economy of Welfare discusses the implications for ‘the’ economy and associated welfare standards. It raises the issue of what would be required to make welfare societies ecologically sustainable. In doing so, we regard the current financial, economic and political crisis and the corresponding recalibrations in Western welfare state institutions as an impetus to also considering environmental concerns. We are furthermore concerned with the main institutional obstacles to the achievement of sustainable welfare and wellbeing (especially the social structures of global finance-driven capitalism), how these could feasibly be overcome, and how researchers can assist policy-makers and activists in promoting synergy between economic, social and environmental policies that are conducive to globally sustainable welfare systems.
These are complex issues that tend to overstretch the terms of reference of single disciplines. My co-editor Oksana Mont and I felt accordingly privileged to have the opportunity to assemble an interdisciplinary team of researchers from five Lund University faculties as well as Kate Soper, Hubert Buch-Hansen and Ian Gough, who wrote the preface, and to work together for eight months at the Pufendorf Institute for Advanced Studies. We subdivided the book into three parts: conceptual issues of sustainable welfare, policies towards the establishment of sustainable welfare and emerging practices of sustainable welfare in countries such as France, the US, Sweden and China.
Our concept of sustainable welfare attempts to integrate the two previously separate disciplines of welfare and sustainability research. Taking environmental limits seriously in welfare theorising means, first of all, to ask whose welfare should be met. Distributive principles underlying existing welfare systems would need to be extended to include ‘non-citizens’, those affected in other countries and future human beings. Hence, sustainable welfare is oriented towards the satisfaction of human needs within ecological limits, from the intergenerational and global perspective. It is only at global level that thresholds for matter and energy throughput as well as for greenhouse gas emissions can be determined in order to effectively mitigate global environmental challenges such as climate change. At the same time, these biophysical conditions and global thresholds delineate the room for manoeuvre within which national and local economies can evolve and within which welfare can be provided. This suggests a new mix of private, state, commons and individual property forms with a much lesser steering role for the market than at present.
In the policy-oriented second part of the book, several authors place emphasis on the detrimental effects of the financial system within the international political economy and highlight various degrowth visions of practical transformation strategies that could frame more specific policy packages. Here, research has a potentially vital role to play but can only do so in close dialogue with diverse societal actors – particularly if it produces insights into the mechanisms, groupings of actors and their institutional embedding as well as into the ways in which governments and governance networks may support voluntary and civic bottom-up initiatives. If sustainable welfare is going to be practiced at all, then it will most likely be in different ways in different countries due to their diverse points of departure in terms of the institutional particulars of market coordination and welfare systems. While research on the potential diversity of future welfare systems is still in its infancy, it is important to explore the opportunities and potentials that exist within current welfare systems since these must be built upon in any move towards sustainable welfare.
Part III of the book argues that a potential opportunity for the establishment of sustainable welfare lies in the diversity of perceptions about the ‘good life’ and the relationship between individuals and governments in initiating transformative processes and legitimizing sustainable lifestyles. People are becoming increasingly disenchanted with the consumer culture due to its growing negative side effects such as time scarcity, high levels of stress, traffic congestion and the increasing displacement of other pleasures of life and wellbeing through the shopping mall culture. We may already find seeds of alternative visions and practices in craft movements, the service economy, socio-ecological enterprises and forms of collaborative consumption. A ‘slower’ life and more free time should not be seen as a threat to the ‘Western way of life’ but as sources of individual and communitarian wellbeing, genuine individual fulfilment and opportunities for greater involvement with various social networks that have the potential of improving social relations and creating trust. This could also facilitate to breaking the link between resource-intensive economic growth and hegemonic perceptions of societal ‘progress’ – and to ending the monopoly of the prevalent consumer culture over alternative definitions of wellbeing and the ‘good life’.
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Corporations and climate change
Global businesses, many of them now larger and more powerful than nation states, exhibit enormous sway on humanity’s response to the climate crisis. Indeed, during the Paris climate talks in December last year, growing media focus centred on business “leadership” on climate change. For instance, Royal Dutch Shell, General Electric, BHP Billiton and management consultancy McKinsey & Co. announced the establishment of a committee to advise governments on how to combat global warming while strengthening economic growth. This follows other announcements such as Unilever’s chief executive officer, Paul Polman, emphasising the need for private sector mobilisation to close the shortfall in emission commitments made by governments, as well as Virgin’s CEO Richard Branson who has argued that “our only hope to stop climate change is for industry to make money from it.”
These proclamations need to be viewed in the broader context of business opposition to the fundamental economic change necessary to avoid dangerous climate change. A good example of the duality of this corporate engagement has been the revelation that oil-giant Exxon, for decades a leading opponent of carbon regulation and funder of climate change denial, has since the early-1980s been well aware of the disastrous implications of fossil fuel use for the Earth’s climate. This self-serving logic parallels other well-known examples of business obfuscation such as BP’s infamous ‘Beyond Petroleum’ greenwashing in the early 2000s, and more recently Peabody Energy’s marketing of coal as a response to “energy poverty” in the developing world.
How then to make sense of the mixed messages from corporations on climate change?
In our new book, Climate Change, Capitalism and Corporations: Processes of Creative Self-Destruction, Daniel Nyberg and I explore the role of corporations and corporate capitalism within the climate crisis. We argue that while many global businesses promote a message of “action” and “leadership”, this ignores the deeper problem 0f how corporate capitalism is locked into a cycle of promoting ever more creative ways of exploiting nature and destroying a habitable climate.
While the last two centuries of industrialisation and capitalist expansion have promoted a mythology that economic development leads to environmental improvement (the so-called ecological modernisation thesis), climate change fundamentally challenges these beliefs. Despite the growing uptake of the language and practices of “sustainability”, “corporate environmentalism” and “green growth”, humanity’s degradation of the environment has in fact accelerated. We can see this not only in the physical manifestations of climate change – the melting Arctic, record-breaking droughts and floods, rising sea levels and ocean acidification – but also in the destruction of habitat and declining biodiversity.
Humans have become a force of nature and scientists argue we are now entering a new geological epoch, the so-called “Anthropocene”. One of the defining features of this new age of humans is the loss of vast numbers of animal and plant species – what writer Elizabeth Kolbert has termed the “Sixth Great Extinction”. As a result, in a relatively short period of time, global capitalism, powered by fossil fuel-based energy, has changed the very chemistry of the atmosphere and oceans with devastating consequences.
In our book we argue that global capitalism is now locked into a process of what we term “creative self-destruction”. By this we mean our economies are now reliant upon ever-more ingenious ways of exploiting the Earth’s fossil fuel reserves and consuming the very life-support systems we rely on for our survival. This is evident in the rush by the world’s largest companies to develop new sources of fossil fuels such as deep-water and Arctic oil drilling, tar-sands processing, new mega-coalmines, and the “fracking” of shale and coal-seam gas. This is occurring at the same time as crucial carbon sinks such as the world’s forests and oceans are being ever further denuded (witness for example the massive forest fires that recently raged across Indonesia aimed at converting rainforest into plantations for palm oil and paper).
We argue that as the folly of our fossil fuel path has become ever more evident, so the corporate response has reinforced the grip of creative self-destruction. A great example of this fossil fuel lock-in was the significant portion of funding provided to last year’s Paris climate talks by major fossil fuel companies and carbon emitters. This was a situation that French climate officials admitted was unfortunate but financially unavoidable if the talks were to proceed!
Indeed, Plan B for climate response has involved growing discussion by businesses and technocrats of “geoengineering”. This includes proposals such as the dispersal of sulphate particles in the atmosphere to dim incoming solar radiation, increasing the reflectivity of clouds or even “fertilising” the oceans through encouraging algal blooms. Despite the likely catastrophic side effects (these plans have after all been compared to chemotherapy for a dying planet!), money and resources are being swiftly mobilised around these technocratic “innovations”.
These examples highlight both the inventive genius of corporate capitalism, and the blindness of industry and government to the ecological catastrophe they are fashioning. We argue this is how we have arrived at a political discourse whereby blocking out the sun or seeding the oceans are somehow seen as sensible options in responding to climate change. This framing allows us to accept that corporate capitalism is able not only to solve the climate crisis it has created, but to actually engineer a new climate.
Of course, a key question is how large corporations are able to continue engaging in increasingly environmentally destructive behaviour despite the disastrous consequences for human society and a habitable climate? In our book we argue that corporations and their spokespeople are able to achieve this by incorporating criticism and reinventing the daily ritual of “business as usual” as a perfectly normal and ecologically sound process.
For instance, through the narrative of “green” capitalism, corporations and markets are portrayed as the best means of responding to the climate crisis. Underpinning this view is the, as yet unproven, claim that new technologies and markets can decouple economic growth from environmental impacts. So as we document at length in the book, many large companies have established new roles and practices aimed at improving their eco-efficiency, greening their supply chains, producing new green products and services, marketing and branding their environmental worthiness, and reporting on their “sustainability” upon a range of industry metrics.
This sparkling image of corporate environmentalism and business sustainability falsely promises no conflicts and no trade-offs. Here, it is seen as possible to address climate change while continuing the current global expansion of consumption. In contrast to the blinding evidence of ever-escalating greenhouse gas emissions, this comforting political myth promises no contradiction between material affluence and environmental well-being. We can have it all and, according to the myth of corporate environmentalism, avoid climate catastrophe!
Moreover, we point out that citizens are increasingly called upon to enrol in this mythology as active constituents in corporate campaigns against improved emissions standards or carbon taxes, as well as consumers and “ecopreneurs” in the quest for “green consumption”. We have thus become the brands we wear, the cars we drive, the products we buy; and we are comforted to find the future portrayed as “safely” in the hands of the market.
The supremacy of “business as usual” thus exacts a powerful grip on our daily thinking and actions. It is a grip strengthened by the promotion of every new “green” product, a grip tightened through the establishment of sustainability functions in business and government, and a grip defended with every “offset” we purchase for a flight to a holiday destination.
Of course, this is also a vision that fits well within the dominant economic ideology of our time; neoliberalism. Alternatives, such as state regulation and mandatory restrictions on fossil fuel use, are viewed as counterproductive and even harmful. For instance, in response to a call to ban new coal mines, Australian Prime Minister Malcolm Turnbull invoked the so-called “drug-dealer’s defence” in rejecting calls for restrictions on our massive coal exports. That is, if we don’t sell it someone else will! In this view, there is no alternative to the market. And so echoing Fredric Jameson, “it is easier to imagine the end of the world than the end of capitalism”.
Taken together these discourses and practices conceal the environmental destruction that is built into our economic system. Actually dealing with climate change as perhaps the ultimate contradiction of capitalism would require material trade-offs that challenge basic identities and interests.
This is why the alternative to “business as usual” is much harder to imagine and easier to dismiss as the enemy of social well-being – what critics so often characterise as going back to living in caves or a return to the “dark ages”. Indeed, those environmentally aware citizens who argue that we need to leave the vast majority of fossil fuels “in the ground” are demonised as extremists, green terrorists, and a threat to national prosperity. As we saw last year in the Federal Government’s much satirised “radicalisation awareness program” (#Freekaren), ordinary citizens that question our economic madness are now subversives of the highest order!
Ultimately the “success” or otherwise of the Paris Agreement is unlikely to threaten the fundamental dynamics underlying the climate crisis. Dramatic decarbonisation based around mandatory limits upon consumption, economic growth, and corporate influence are not on the agenda nor open for discussion. Rather, global elites have framed the response to climate change around an accentuation of the very causes of the crisis.
In essence, the prevailing corporate view is that capitalism should be seen not as a cause of climate change but as an answer to it. Thus a problem brought about by overconsumption, the logic goes, should be addressed through more consumption.
This capitalist imaginary of unending growth, prosperity and mastery over the natural world is central to our undoing. Unfortunately, until this changes, the dominance of corporate capitalism will ensure the continued and rapid decline of our once-bountiful and habitable planet. As we conclude in our book, changing this world-view is perhaps the most profound challenge we face in responding to the existential crisis that is climate change.
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Private Governance in African Gold Mining
The creation of one’s interests in others negates the need for persuasion or coercion. That is the central premise of my article ‘Interests need not be pursued if they can be created: Private governance in African gold mining’, published in Business and Politics and awarded the inaugural 2015 Richard Higgott Journal Article Prize. In the article, which examines the political economy of sub-Saharan African gold mining, I argue that mining firms are able to create ‘truths’ about the superiority of industry-developed regulation. In doing so, these firms determine industry regulation and impinge on state sovereignty.
The article develops these arguments through analysis of a series of interviews conducted with senior executives of sub-Saharan African gold mining firms and industry representatives. In doing so, it argues that gold mining firms utilise their structural power to set the regulatory agenda and develop private governance regimes. However, it is the use of discursive power, or the painting of these regimes as superior forms of regulation, that allows business to wrest sovereignty from the state.
The globalisation literature has long recognised the role of firms as political actors. Large, powerful firms possess what is known as private authority, which enables them to produce private governance initiatives that are recognised as legitimate forms of regulation. In the mining sector, these include the International Council for Mining and Metals (ICMM), the World Gold Council, the Extractive Industries Transparency Initiative and various ISO standards.
The article utilises a three faces of power framework to analyse the interview findings. The first of these forms of power is instrumental; that is, lobbying, campaign funding and the placement of business-friendly elites in government bureaucracy. Secondly, firms utilise structural power, or threats to relocate operations based on regulatory standards as well as the ability to develop voluntary regulation. Lastly, firms rely on discursive power, or the use of communicative practices, to create ‘truths’ about policy that are accepted by governments and the public alike. Discursive power means that interests do not need to be pursued if they can be created; or, that firms can rely on “perception of legitimacy and voluntary compliance” in preference to coercion.
Using the above framework to analyse the interviews, it emerges that gold mining firms are relying less on instrumental power, instead using structural power supported by discursive power to determine the direction of industry regulation. That is, they set the regulatory agenda, create voluntary systems of rules and then promote these as superior forms of regulation.
The findings suggest that instrumental power is seen to be largely ineffective. One respondent noted that their firm continued to lobby governments, however, “by the time the government is deciding to put a resource tax of 70% on you, it’s already way too late to start lobbying.” The same interviewee noted that in this case they would revert to the use of structural power, by threatening to end the funding of social services in the communities in which they work. Evidence of structural power also emerged in the promotion of the World Gold Council and ICMM, industry bodies that allow firms to jointly decide on the issue areas they wish to prioritise. These cross-industry bodies allow firms to agenda set, and there was general consensus that membership allowed firms a ‘seat at the table’ when it came to developing private governance initiatives.
Although business utilises its structural power to set the regulatory agenda and form industry governance regimes, it is the discursive power of these firms that affords them the greatest amount of power. Interviewees were keen to emphasise their business’ efforts at self-regulation and the adherence to global standards, or as one respondent put it “living to one code”. This presents evidence of a lack of a ‘race to the bottom’ in the industry but it also suggests that firms are keen to promote their private governance solutions as legitimate and superior to government legislation; in turn engaging discursive power. This allows firms to delineate themselves as the holders of knowledge and experts whose regulation is superior to that implemented by the state.
One of the strongest examples of ‘successful’ private governance to emerge from the research was the implementation of the ISO14001 standard across the mining sector. This standard allows firms to certify their environmental management systems (EMS) against a prescribed standard. The voluntary adoption of this standard by one gold mining firm was deeply resented by other companies in the sector, who saw the standard as too prescriptive for the industry (it was originally developed for sectors such as manufacturing). Eventually, all large mining firms, then smaller players, adopted this standard. Ultimately, it has now been used as the basis for several countries’ formal regulation in this area, including in Ghana, the EU and China.
Over the past three decades, extractive firms have created a large number of standards and procedures covering a wide array of issue areas. As in the case of ISO14001, these standards and rules become the ‘accepted way of doing things’ and are relied upon by governments in designing legislation. The ability of firms to promote themselves as capable of governing their industry is evidence of their discursive power. This allows them to build a reputation as industry experts and control the regulation of their sector, in preference to sharing sovereignty with states.
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