Corporate Strategy Concepts


Decarbonising capitalism


Transforming businesses across the globe into sustainable operations is a plausible future scenario, write Matthew Paterson and Peter Newell. But political action would be needed to overcome vested interests


W


hat might a decarbonised economy look like? While many readers of Sustainable Business might under- standably be involved in the day-to-day activi- ties of trying to build a business strategy around energy efficiency, renewable energy or other technologies that will help tackle climate change, it is worth taking stock of the big pic- ture of what else will be required to construct a low-carbon economy.


There are three plausible broad scenarios for the next 50 years as we struggle to respond to climate change. One is what we might call the Oryx and Crake scenario, following Margaret Atwood’s dystopian novel. This is a world where a small minority manage to insulate themselves from the effects of climate change and maintain a pros- perous lifestyle but at the expense of the rest of humanity which is forced to suffer a slow decline, and at the cost


of increased insecurity as they have to protect themselves against the majority world. This, sadly, is where we are currently headed. A second possibility is the transformation to a post-capitalist world. This is a world where we no longer aim for economic growth but to live consciously within limits. We deploy technolo- gies not for increased productivity as an end in itself, but to reduce our carbon emissions and other environmental impacts. In such a world we are not therefore forced to constantly improve efficiency to overcome the increased


28 | Sustainable Business | August/September 2010


Never before in history have we tried collectively to reshape the entire technological and productive basis of our society


consumption necessary for economic growth. Such a world also entails a significant redistrib- ution of wealth from rich to poor, and a shift from individualist to collectivist means of meet- ing our needs. Importantly, such a world entails a radical political overhaul of existing power relations, undermining the dominance of busi- ness in the shift to the new society. This scenario is perhaps the furthest from where we are today. A third possibility is one where capitalism transforms itself to meet the challenge of decarbonisation. If it succeeds, this would be a situation we call Climate Capitalism. It is, in effect, what most progressive business activity from the companies covered routinely in the pages of Sustainable Business is aiming towards, and what would result if it were rolled out across the whole global economy. It is a world where fossil fuel use is largely a thing of the past, and where com- panies make profits


through increases in efficiency rather than in production. But it is a world still organised around the basic principles and features of capitalist economies that have dominated the globe over the past 200 years. We think that it is important to be clear about the nature of the challenge that we face here. Never before in human history have we tried collectively to reshape the entire technological and productive basis of our society. All our previous major technological revolutions have occurred as a result of individual innovations


combined with armies, kings or entrepreneurs seeing the opportunities to use them to their advantage. Now we are trying to plan and engi- neer such a revolution on a worldwide scale. And this revolution needs to essentially wind down some of the most important industries in the world, and thus overcome the opposition of considerable vested interests. It also needs to do it in a relatively short space of time if the worst effects of climate change are to be avoided. Pursuing climate capitalism has narrow economic dimensions, to do with the sorts of investments that businesses make, how they perceive risk, the ways they manage their in- house operations, and so on. But it is also deeply political. It entails building coalitions that can overcome opposition to vested interests. It means organising government intervention to direct economic growth in ways that help pursue decarbonisation, and changing consumer behaviour in ways that many will resist. Green businesses need to understand the political landscape they face, as without political action, their pursuit of sustainable profits will be limited.


But we also need to start from where we are


now. For the past 30 years capitalism has been governed by a deeply held free market ideology (and a hostility to governments attempting to shape the economy as a whole), the dominance of finance over other sectors and the consequent short-termism, and widening inequalities both within and between countries.


Overall responses to climate change have been determined by this sort of economic ideol-


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