Friday 31 January 2014

Climate change - a dynamic business environment -

Back in the days when the internet was new, the prevailing wisdom was that it would broaden our minds by exposing us to a wider range of opinions. It seems that all that's really happened is that whatever whacky views we might have we can always find someone out there that agrees with them. Surfing the web has become more like wandering around in a reflective bubble.

It's not easy to see things from different perspective and in my own bubble I've tended to look at climate change in terms of its environmental and social impact. The general perspective being that inequality and loss of habitat are bad things. This has been accompanied by weary attempts to understand why the world of business and government doesn't quite seem able to take it seriously. Or not seriously enough to do anything that might compromise short term profits.

I was up the garden pruning fruit trees the other day when it occurred to me that, from the simple perspective of making money, climate change has quite a lot going for it. Not for everyone of course - not for farmers whose lands might become either inundated with water or desiccated by drought - but for lots of those in the general business of exploiting resources and selling stuff it does. 

For example, if I were a big fossil fuel company it would make sense to get as much out of the ground now, before governments stop us, and turn it into cash to be invested elsewhere. My own corporate strategy would be to invest the income in remediation. That way I'd effectively end up getting paid twice. Once for extracting the fuel that causes the damage and once again for putting the damage right.

Just as the mass extinction events of the past have opened up opportunities for new life forms to emerge, albeit on geological timescales, so climate change will offer new opportunities for business. A bit like a good war. Since one feature of the current neo-liberal economic order is that the proceeds of whatever growth there might be are increasingly finding their way into the hands of the hyper rich, there will be plenty of money to be made preserving their exclusive lifestyles. Why bother attending to the needs of the poorest 3.5 billion when they only control as much wealth as the richest 85. Besides, because poor people can only spend small sums at a time the transaction costs, per $ spent, are much higher. To put it simply its a lot easier to make a lot of money constructing luxury yachts, taking people on expensive adventure holidays, giving them financial advice on what to do with all the money they don't really need or drawing up the contracts to make sure they keep most of it to themselves, than it is to sell lots and lots of basic necessities to people who don't have very much.

Now you might argue that climate change will damage a lot of our existing infrastructure. The costs associated with cleaning up after major storm events in the developed world are absolutely enormous. But this money doesn't disappear, it simply ends up in the hands of those doing the rebuilding and I feel pretty certain that as long as the rich need a particular bit of infrastructure it will get rebuilt.

Just as it has become clear that for our minds to work effectively we have to be able to forget capitalism can only supply us with new goods and services if we've used up, or wasted, the ones we've already got. ( I believe that Singer sewing machines were so durable that the company ended up buying, and then destroying, second hand machines simply to take them out of competition with the new machines it was trying to sell) Where would the arms trade be without market stimulation through destruction? 

So, in the cut throat competitive world of big business, climate change simply presents us with a dynamic business environment. One that separates the men from the boys in this best of all competitive worlds. The rest of us will just have to put up with being losers.



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