We have another of these COP climate change meetings somewhere warm and sunny in the middle of the Northern Hemisphere winter coming up, so we have — as well as the booking of swimsuits among the climaterati — a series of reports insisting upon how dire everything is and how we must abolish capitalism. For that is always the answer to everything, isn’t it? Abolish the system that has given us the richest poor people the planet has ever seen — abolish capitalism.
As usual Oxfam has decided to stop feeding hungry people and start shrieking that — sigh, you guessed, right? — we must abolish capitalism. Their report is here and the calculation is that billionaires emit more CO2 than proles therefore … how did you guess?
In one half they talk about the richest 1 per cent and 0.1 per cent by income. This, roughly, means the top 10 per cent of the UK and top 1 per cent of the UK. A GP will be in this global 1 per cent — even before whatever new pay rise Wes Streeting decides to give them. We are not, not here, talking about the awfulness of extreme inequality or anything. Just haute bourgeoisie in rich countries. When we start to talk about the top 10 per cent and the top 40 per cent then the emissions numbers can be taken — as Oxfam does take them — to be even more starkly unequal and therefore inequitable. But this is still missing the point. The top 10 per cent and the top 40 per cent are that portion of humanity living in countries that have any serious form of economic development. The bottom 50 per cent — shamefully, I agree — are those living unblessed by capitalism and free markets. That is why they have few carbon emissions — because they have very little of anything.
We can all read Oxfam’s numbers here and bemoan them just as much as they do. But a better bemoaning would point out that half of humanity is still poor and shouldn’t be. For we do know how to cure poverty — add capitalism and free markets, sit back, wait. So, we should go and do that, obviously.
Oxfam instead insists that those blessed by being richer — and thus able to emit — should stop being rich enough to be able to emit. This is really strange because Oxfam used to be — used to be — an anti-poverty charity. How things can change, eh?
The other half is talking about billionaires and wealth. At this point Oxfam attributes the emissions of the companies owned by the billionaires to the billionaires. This is ludicrous. For if we took the companies off the billionaires — dispossessed them — the companies would still exist, the emissions would still exist even if the billionaires would not. Therefore the emissions are not a function of the billionaires.
It’s difficult to know whether that’s more or less ridiculous than a formerly anti-poverty charity complaining about the existence of non-poverty.
The other report comes from Thomas Piketty and his confreres in Paris. This is, to my mind, worse for Piketty should know better. This report is also talking about wealth, the billionaires and so on, and tells us that:
The global top 1% represent 15% of all consumption based emissions, while they account for 41% of global emissions associated with private capital ownership.
Again, the global top 1 per cent by wealth is also roughly the top 10 per cent level for the UK. But wealth is hugely skewed by lifecycle effects — you start work, you save, pay off the mortgage, save some more then retire. Wealth peaks at about retirement age. The top 10 per cent of wealth holders in the UK are overwhelmingly in the 55 to 70 age group. This isn’t a product of how pernicious capitalism is — it’s one of saving for retirement. That top 10 per cent — by wealth — in the UK would include a teacher, an NHS nurse, in their 50s in the south of England who had paid off the mortgage. It’s cushty by global standards, it really is, but it’s not what we all think of as wading through caviar to get ashore from the yacht. The ownership of the companies that apparently emit is just because pensions do tend to own shares.
Companies do not, in fact, emit. The consumers of the company’s production are responsible for the emissions
This is also where we should Tsk more than a little. We can’t expect Oxfam to know these things, perhaps, but an actual economist should. Companies do not, in fact, emit. The consumers of the company’s production are responsible for the emissions. They call the company’s production into being by their demand, and therefore it is they — OK, we — who emit by driving, flying, cooking our food, heck, by having food at all.
We can even show this by their own calculations. They use Scope 1 and Scope 2 emissions in those calculations. Scope 1 is what your supply chain emits, Scope 2 is what your own activities do and 3 is what your customers do. But for us consumers, we out here, everything done by industry is Scope 1 emissions by definition.
Climate change isn’t — despite all of these attempts to insist it is — some function of they, them, some other that we can beat up upon to make them stop. It’s us being so selfish as to demand three squares and a warm flop that causes the emissions. This means that it just isn’t true that we can blame it all upon the billionaires, the companies they own, capitalism or anything else like that.
But then we get really wild here:
Our simple projections suggest that the share of wealth held by the global top 1% could increase from 38.4% today to 46% in 2050 if those individuals were to make and own all necessary climate investments in the next decades.
Yer wha?
So let’s just unpack this a little. Wealth is the result of investing in something successful. Capital has been deployed which then meets some human need or desire — or at least one that people will pay for. Further, there has to be some excess value production here. What is being produced must command a higher price than the costs of the inputs to create it — value add. This is what is known as making society richer overall — value is being added — even as the capitalist gains some of that added value.
The need or desire being described here is beating climate change. From not drowning Bangladesh all the way through to not broiling Flipper in the fumes of the last ice floe. Something we probably do need and certainly desire.
We should not allow the capitalists to do this and should instead use the people who bring us HS2. The reason we should not allow the capitalists to do this is that they might succeed.
Yes, that is what is being said. The capitalists will only increase their share of total wealth if their investments actually solve climate change. Therefore we cannot allow capitalists to invest to beat climate change because wouldn’t it be bad if they did?
But then talk-jamborees in warm parts of the world in mid-winter. It is necessary to produce a paper — however absurd — to go to one of these. For if you just turned up, bikini in paw and demanding a pina colada then you’d just be a prole tourist. Rather than a climaterati working to save the world while pawing a bikini.
