Disaster capitalism with bad incentives - the ultra wealthy simultaneously make money from causing the climate crisis and dealing with its consequences
I’m sure this is one of the many reasons us humans seem, in practice, unconcerned or unable to do something substantial to avert the climate catastrophe that, at the end of the day, might annihilate us all.
Super-rich get ‘double dividend’ from causes and costs of climate crisis, report finds
How so? The mega-wealthy get ever more wealthy via their investments in companies that behave in such a way as to exacerbate the crisis, whilst at the same time investing in companies that make money mitigating the crisis.
Create a crisis, sell people some kind of solution to the crisis, become rich - it’s a tale as old as time.
The global equality organisation has found that the richest 0.1% of the world’s population are heavily invested in disaster preparedness, recovery and reconstruction – a market that is projected to grow from $70bn to $92bn a year by 2029.
This gives the planet’s wealthiest and most powerful people a “double dividend” from the climate crisis and, more alarmingly, an incentive to delay or disrupt action to solve the problem, the NGO says.
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Jean McLean, Oxfam’s chief influencing officer, accused billionaires of turning chaos into profit. “The super-rich benefit at both ends of the crisis: first, through continued investment in polluting industries, and second, through investment in the booming ‘adaptation economy’ – recovery and rebuilding services are sold back to a warming world,” she said.
Obviously this produces very bad incentives:
This gives the planet’s wealthiest and most powerful people a “double dividend” from the climate crisis and, more alarmingly, an incentive to delay or disrupt action to solve the problem, the NGO says.
Beyond an increasingly miserable existence for life on our planet, perhaps culminating in a fiery death, in the short term this situation is also substantially increasing inequality.
Rich people cause the problem:
The richest 0.1% on the planet, a group of 8 million people, are responsible for more carbon emissions than the poorest 3.5 billion combined, the report says. As a result, this group have reportedly contributed by 125 times more than the average person to extreme heat events.
This is partly due to lifestyles. The world’s private jets, for example, release more CO2 in two seconds than most of the world’s people emit in an entire year. But the biggest impact of this group comes from their investments.
Poorer people pay the price:
It also worsens global inequality as those least responsible for global heating end up having to pay those most responsible in terms of higher food prices, repairing homes damaged by extreme weather or relocating to other areas.
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The annual emissions for the richest 1% will cause 1.9m excess deaths due to heat, Oxfam says, based on estimated impacts on human health, agricultural productivity and sea level rise.
More than three-quarters of those deaths will occur in low- and middle-income countries, which are far less responsible for the crisis because they produce only 8% of emissions.
Wealthy nations and wealthy individuals are somewhat insulated – at least for now – from the climate crisis because they are more likely to be able to afford higher food prices, robust houses, emergency evacuation, private healthcare and personal security.
Oxfam have some suggestions to mitigate this absurd situation in the mean time, although given the consequences of the current situation their report details. Let’s just hope, admittedly unrealistically, that someone who has the power to do some of this listens.
Oxfam is demanding higher taxes on the rich, private jets, oil and gas companies and polluting companies. The group calls on the UK government to improve international climate financing commitments based on grants rather than loans, and to end profiteering from climate disasters.
Nafkote Dabi, the climate change policy lead at Oxfam International, said: “What’s complex about talking about climate change is everyone likes to think it’s a shared problem, but it’s not. Addressing the climate crisis is really easy. Control the richest, curb their power, curb their emissions, and also tax their wealth.”
The whole thing makes me think about Naomi Klein’s important book The Shock Doctrine: The Rise of Disaster Capitalism, which I read about 8 years ago - so nothing here is really entirely new news. It’s just news that for the most part we delude ourselves into not thinking about.
Whilst her book isn’t entirely climate change focused (though she has written one since which is, and which I need to get to reading) it provides a ton of illustrative examples of how the people with power and wealth who want nothing more but more power and more wealth cruelly leverage all kinds of disasters to get it.
Per Wikipedia’s description of the Shock Doctrine book:
In the book, Klein argues that neoliberal economic policies promoted by Milton Friedman and the Chicago school of economics have risen to global prominence because of a deliberate strategy she calls “disaster capitalism”. In this strategy, political actors exploit the chaos of natural disasters, wars, and other crises to push through unpopular policies such as deregulation and privatization. This economic “shock therapy” favors corporate interests while disadvantaging and disenfranchising citizens when they are too distracted and overwhelmed to respond or resist effectively.