Adrienne Buller on green capitalism, risk, and market-based exploitation

“These are social, political, ethical questions that should be resolved democratically”

Adrienne Buller is a Senior Fellow at Common Wealth, a progressive think tank focused on the democratic economy. Her writing has featured in The Guardian, The Financial Times, The New Statesman, Jacobin, and New Left Review. Adrienne is based in London and available for interview and written pieces. @adribuller

I spoke to Adrienne about her new book, The Value of a Whale: On the Illusions of Green Capitalism (available in the US on October 4th). This interview has been edited for content and clarity.

MH: Some people seem to believe that “green capitalism” can stop the climate and nature crises, but maybe it'll just do so in an unjust manner. And you argue—correctly, in my opinion—that it actually can’t, that the solutions are false. So it's not just undesirable, it's actually infeasible on its own terms. Can you say more about that?

AB: I'm glad that comes through; that was my big goal in the book. A lot of the time, demands for justice- and redistributive-based approaches to the climate crisis that Green New Deal-type advocates or climate justice advocates will make are dismissed as pie-in-the-sky: “Oh, wouldn't that be nice, but you're not being realistic” and “This is the system within which we operate; if it's going to green itself in some way, and maybe create some harms in the process, that's the best-case scenario.” What I try to do is examine the evidence of what are these solutions being proposed, and examine that in a way that shows that, even on its own terms, a lot of green capitalism's totemic solutions—greening the financial system, carbon pricing and carbon offsets, and market-driven approaches to decarbonizing energy systems, transport, and all these things—they're all failing on the basic question of: does it work?

There's evidence that I review about carbon pricing regimes that shows them to be hugely underwhelming in large part because we can't arrive at anything close to what would be considered an effective carbon price without causing an unendurable level of economic hardship and pain. That is just a fatal flaw in the idea itself. Same with sustainable finance; it's doing very little. Major green- and climate-themed funds tend to just be packed with big tech and pharma. Let's not pretend that that’s driving a path towards decarbonisation.

I think all of it comes down to a point that I harp on a lot in the book, which is the question of justice and redistribution of consumption, wealth, and waste and how we organize and use the resources that we have—which are plentiful, there's more than enough for everyone to live a good life but we just organize them in a way that is catastrophically irrational. Addressing those questions to me is at the heart of actually materially resolving climate and ecological crisis, simply because the huge inequalities, rates of consumption and emissions, etc. among the globally wealthy are something that cannot be universalized. Therefore either you choose to maintain those and say, “I'm okay with basically denigrating huge parts of the global working class to permanent poverty and/or sacrifice zones,” or we have a discussion about the uncomfortable reality of the need to curtail a lot of lifestyles of those at the higher end of the spectrum, to talk about redistributing the way that we produce and share energy, resources, etc.

As you write, those sorts of market-based solutions insulate important decisions from democratic control and also allow for diffusion of responsibility for both their failures and their downsides. And they can actually be significantly more complex, when you really think about it, than your standard command-and-control regulation. Can you say more about that?

I'll start from your last point, which is that the idea of a market-based solution and something that just uses “the elegance of the price mechanism” to address this and the “self-interest of rational actors in the market,” as the classical economic models tell us they are. The justification for that is that it gets to sidestep and bypass the messiness of politics and that we'll just leave it to the market without having to deal with democratic contestation, and that's going to be efficient, it's going to get us there quicker, and it's going to be a better use of resources because of the impossibility of planning and the very classic neoliberal idea that we can't ever have enough information as a single person to plan effectively. All that argumentation doesn't actually reflect the reality of constructing markets that actually internalize, to use that language, the cost of carbon emissions or environmental damage to the market. Doing so is, it turns out, enormously complex and inherently political, and so you don't even evade some of the issues that are the initial justifications for using them. 

The EU Emissions Trading scheme is a great example. There's been a huge amount of effort, energy, and political and media attention dedicated to what is the crown jewel of EU environmental policy. But it still hasn't escaped lobbying efforts with respect to rules around derivatives trading with respect to the allocation of free permits, with respect to what industries are included, and all of these other questions. In addition, it is a hugely legally and legislatively complex tool that takes a lot of effort to construct, maintain, regulate, and monitor. So none of that is in any way more simple or evasive of politics than a regulatory approach would be in terms of directly regulating emissions and saying it needs to decline by this amount, or specifically we're going to regulate the fossil fuel industry, or what have you. 

To go back to the question about politics and the democratic aspect of it, the other very neoliberal or free market-type claim about markets in general is that they are the ultimate in democratic exercises because everyone comes to the market, they respond to prices, they get to have the freedom to choose what they want, what they're going to do, to adapt accordingly. In reality, we know that everyone is coming to the market on incredibly unequal footing. People don't arrive with the same level of freedoms; some people have to sell their labor to survive, many other people don't. Corporations are entering the marketplace with a huge amount of cash and power to throw around compared to many other small actors. So it's not a level playing field that is an exercise in democracy. Instead, markets tend to reproduce and reflect existing distributions of power, if not exacerbate them, which is something that we have seen in the US and the UK over the past 40 or so years as there have been fewer and fewer limitations on market exchange and the power of capital.

To me, that's a fundamental problem with a market-based approach to climate and environmental crisis, because it treats this as something that is a purely technical problem and one that reflects the fact that we just haven't arrived at the right price for environmental damage. When in reality these are questions that are embedded with every aspect of our economies and the way that we organize our lives. These are social, political, ethical questions that should be resolved democratically and should have everyone's input rather than being left up to the interests and whims of whichever actors happen to have the most power within the marketplace.

What is the difference between risk and uncertainty—specifically Knightian certainty—and why does that matter for how we think about the ecological crisis and what to do about it?

The importance of the difference, one being we can evaluate the likelihood of something happening based on a set of known parameters; that's how we think about risk. Whereas Knightian uncertainties mean we don't even know what the parameters should be, let alone have estimates of how they'll operate that we can then base an analysis of risk on. That matters a lot, particularly in the financial space, which I talk about a lot in the book. Finance is obsessed with risk; that's what it's all about, optimizing your risk relative to your return. That's fine from the perspective of a financial portfolio. It's a very different thing altogether when we are thinking about the uncertainty of climate crisis, insofar as we don't even know what is possibly coming down the line.

So the best approach in that scenario isn't to say, “Okay, let's arrive at this optimal level of risk that we can all maybe magically agree on is reasonable” when there is the possibility of a nonzero risk of catastrophe. In that scenario, the safest approach to be taking is one that's called the precautionary principle, which is that we should be working to do absolutely everything in our power to minimize the possibility of a potentially catastrophic risk. That is definitely not the approach that we're currently taking [laughs] and that finance currently takes to this. It's a distinction that I tried to make in the book to illustrate the way that finance and other actors think about this question.

How do entities in the Global North use financial tools to extract profit from the Global South and perpetuate these crises?

This is a really interesting question and comes down to the Wall Street Consensus concept that I borrowed from the delightful Daniela Gabor—it started in the sustainable development space and has moved into how we resolve global climate change and environmental issues—which is this idea that we should be doing everything in our power to encourage private capital and private investors to move into previously “undesirable” or too risky spaces for investment. So that's investing in projects or the sovereign debt of Global South countries, as a very salient example, and doing so through ways that involve using public power and capacity to backstop those investments—whether it's loan guarantees or other forms of securitization—that basically reduce the perceived risk for investors of moving into those spaces. Using public capacity to backstop it and taking no public benefit from that, but ensuring that while we socialize the risk, they can still privatize any gains to be made.

That's seen as this supposedly positive thing because there's always estimates all the time about financing gaps for climate and how we need to be leveraging private capital and private investment to deliver this. In some ways, I think that's a very intuitively compelling argument; it would be great if private investment was actually allocated towards decarbonisation and towards making people less poor. Problem is, a lot of the time, it really isn't. And even when these kinds of investments are made in projects that are beneficial in the near term, over the long run it increases vulnerability to shocks because we've done everything in our power to make global finance incredibly mobile and people can just move out of investments at any point.

We saw this with COVID. There was a massive efflux of investment from the Global South as the pandemic hit, which was absolutely devastating in terms of the cost of borrowing for nations there—you needed some very basic finance to respond to a pandemic. And it's the same with climate crisis, where you can foresee a future in which the inevitable series of acute shocks that will come from a long-running, accelerating climate crisis will make Global South nations very exposed to the whims of global markets, which are inherently unreliable, particularly in a system where we don't have any controls in place to prevent that. So that, I think, is a significant risk if we think about relying on private finance to deliver this.

In addition to that, even when we are de-risking these investments, private finance demands a huge amount from those that it lends to in the Global South, where it might claim that these investments are considered riskier than they might be elsewhere. So you end up with this idea that we're somehow pouring billions of dollars of finance into the Global South, and isn't that great? It creates this image of that being money that really goes to those places, but it tends to be in the form of often punitive and very high-rate loans. That's not a transfer of wealth from North to South in the way that it's often depicted; it ends up being a transfer of wealth in the long run back to the Global North in the form of an interest-bearing loan. And in the context where there's no guarantee that what the loan was given to actually is delivered or is helpful to global populations in terms of the climate or equality, then you have this double hit of extraction. So it's not that it wouldn't be great if there was more money flowing that direction, it's just that we have a global architecture to support finance in extracting as much as it can while delivering very little and being incredibly mobile in a way that's often very harmful.

You take care throughout the book to use different phrases, climate and nature crisis or ecological crisis, things like that, and then you specifically talk about how sometimes a lot of even well-meaning entities can have a narrow focus on carbon. How does financialization and the sorts of market logics that you talk about perpetuate carbon reductionism?

That’s a super interesting question. I think there are two elements at play there that are overlapping. One is just that it's a much simpler, in many ways, entity in terms of being something that can be rendered market-compliant. That sounds a bit silly, but it's much easier to say, “Every molecule of CO2, we can attach a price to.” So that's an easier thing to make market-compliant and to bring into a price mechanism-based system. And the second part is that I think that is not at all mirrored in the ecological question, which involves abstracting different elements of ecosystems out from each other, which doesn't really work from an ecological perspective. From the perspective of the climate, it is as simple as there is more or less carbon in the atmosphere right now. But from the perspective of the biosphere, it doesn't make sense to say, “Okay, we have X amount more mammals or X amount more whales, and we've resolved this problem, isn't that great?” because it's all about a very fine-tuned balance and systems that are incredibly complex and interconnected. It's not nearly as simple to arrive at any logical price for a whale or any other aspect of an ecosystem, then that's a much less attractive product for actors within a market-based system to be drawn to.

And then the other: from a purely financial perspective, we can model the risks of climate crisis in a much smoother way, that they tend to be attracted to. Now whether that's an appropriate way to model the climate crisis is another question. But you can have an understanding of for every fraction of a degree, this is likely to happen, or the relationship between carbon emissions and those fractions of a degree. That is something that applies to this risk-based approach, whereas ecological systems tend to be much more defined by that radical uncertainty. And I would say that the climate crisis is also defined by radical uncertainty and moderate uncertainty because of things like tipping points that we don't fully understand. But from the perspective of financial risk modelers, it's enough to be able to point at this supposed smooth relationship between emissions and temperature and risk. That allows you to really focus on carbon as this domain of risk and potential speculation and profit as opposed to nature which, even though they're trying, is much less desirable because it is much harder to understand what those risks are and might be, and how to speculate on them and make returns from them.

So green capitalism is bad. The profit motive is not a proper basis to run a society, much less save the planet. What should we do, and is anyone doing it right now? 

God, what a big question, and open-ended. You'll notice that the book itself obviously, maybe cheekily, skirts around that a little bit. I think in part that's because I have this pet peeve about books that are like, “And now here's my final chapter with my manifesto of 50 things that I list off.” There's so much to say and so many things that people are doing that there's no way I could have done that justice in the book itself. I also think, in a more meta way, one of the reasons that I avoid very specific prescriptions is that one of the core goals of the book is this return to asking everyone: what is it, fundamentally, that we value? And what is it that makes our lives good, better, worth living? What is it that actually benefits us on a day-to-day basis, and what is something that we have taken for granted but that is fundamentally harmful or irrational? And to leave that as an open-ended and democratic provocation.

However, if we want to get more specific because that's not super-satisfying, I think policies that are oriented around anything other than crowding in private actors, around ensuring an optimal distribution of costs and benefits, and around GDP growth as an outcome of this policy. The IRA is a good example there: yes, it's climate investment, but it's fundamentally oriented around in many ways supposedly addressing inflation, great, but also growth and other kinds of imperatives and new investment opportunities for private actors that I think will ultimately be a fatal flaw.

So for me, there are approaches like the emerging Chilean constitution. It's a really interesting and hopeful example of a way that we could be thinking about and organizing governance and economies around different indicators of what makes a good life and a thriving society. On a smaller scale, there are lots of community-based efforts around common ownership of energy that are really encouraging. I think that's a fundamental approach we need to be taking, which is moving as many things as possible that are fundamental to our ability to live life—whether that's energy, water, mobility, all those kinds of things—out of the domain of the market and decommodifying the fundamentals of life as a key terrain for us to be struggling on. That's absolutely antithetical to green capitalism, but any effort to do that is really valuable.

I would be remiss if I didn’t do this: let's talk about whales. Incredible beings. Awe-inspiring.

[laughs] I love a good whale.

That's sort of your framing for the book, and you have a beautiful little story in the introduction about why that inspired you. Can you say a little bit about that?

I was hugely fortunate to have grown up in British Columbia, Canada. I grew up in Vancouver, which is on the west coast, and it's a city that's very embedded in the nature around it; it's inescapable. You're in the midst of the ocean and mountains and temperate rainforests, and it's pretty spectacular. But it's also a place that is hugely embedded in primary industries, mining and other extractive industries—fossil fuels, forestry, fisheries. So you're also very quickly exposed to heavy industry and its brutal impacts, not just in terms of the workforce and the kind of work and conditions that it perpetuates, but also its ecological impact.

So I grew up embedded in nature and radicalized by the work around me, and whales in particular have always really spoken to me insofar as I think they speak to something that I think we lose in all discussions about the climate/environment, particularly with the carbon reductionism that you talked about there, which is the sense of awe and the complete unknown of the natural world that I think is captured by the deep oceans and the giants that live within it. They're also really intelligent animals that we don't fully understand.

So a reminder that there are species out there that experience loss, grief, love, and joy and communicate to each other and sing across the ocean. All of this is very sweet and lovely, but for me, it is one of those grounding exercises in reminding myself to move out of the economic-type frame that I often also fall victim to; I work in economics, it's what I think about most of the time. It serves as this touchpoint reminder for me to step back from that and think about: what are we really doing this for? What do we really care about? And to be reminded of the mystery of the very fragile world in which we live.