This article is an edited excerpt from Alasdair MacEwen’s interview with Jessica F. Green on The Land and Climate Podcast, in which she discusses her new book, Existential Politics: Why Global Climate Institutions Are Failing and How to Fix Them.
Listen to the podcast at the top of this page, or purchase a copy of Existential Politics from Princeton University Press by clicking here.
After thirty years of multilateral climate policy cooperation, we have failed to bend the curve on emissions. The climate crisis is worse than ever.
Politics is about who gets what and when. The issue with climate policy is that it is a distributional problem. Climate policy should be about asset revaluation.
Climate change reduces the value of assets that will be destroyed by extreme weather, whilst climate policy reduces the value of others. Truly decarbonising would make existing fossil fuel assets and infrastructure worthless. This generates a huge conflict.
There is currently a wealthy, politically entrenched set of fossil asset owners, and a less influential set of green asset owners. Existential politics is the fight between these two sets of asset owners. Who will win globally, and at the national and subnational level? They are not fighting about emissions – they are fighting about their bottom lines and, in some cases, their way of life.
Instead of confronting this fundamental power struggle, climate policy focuses on carbon accounting. My new book, Existential Politics, examines carbon pricing, carbon accounting, and voluntary carbon markets, to understand why climate policy is failing.
Carbon taxes and carbon pricing are incredibly complicated, and not terribly effective. Net zero and carbon offsetting are technical, opaque processes that are sold as measurement. Climate actors have come to realise that offsets are unethical and ineffective. Most carbon offsets are avoided emissions, selling the absence of something. It is a stupid investment, but we have bet the climate bank on offsets.
Despite all of the problems in making carbon offsets work, they remain the basis of climate policy. The “net” in net zero mostly means offsets. Corporate pledges, national pledges, aviation and shipping policy for reducing emissions all rely on offsets. Fossil asset owners have a vested interest in continuing this, as it enables them to meet climate goals. Offsetting allows fossil fuels to maintain value dominance over green assets.
Emission trading systems (ETS) create a new currency; the emissions allowance, which is dictated by supply and demand. These systems require a huge amount of regulatory capacity, data, and active management. The EU’s ETS is an example of this. It has created a functioning market with a reasonable allowance price, and a central bank for carbon, called the Market Stability Reserve. Managing an ETS requires an extraordinary amount of regulatory capacity and political will. Emissions trading has only resulted in a few percentage points’ reduction of annual emissions, and that is in tandem with many other types of climate policy.
Carbon tax fails as climate policy – a fundamental rule of politics is making things more expensive makes people angry, making the policy unpopular. The French Yellow Vests are an example: eight months of protest, sparked by a proposed fuel tax. Carbon tax can reduce emissions but does not promote decarbonisation. Reductions are from fuel switching or energy efficiency, which will not reduce fossil fuels, only consumption.
Spending billions on fossil fuel subsidies while implementing carbon pricing is preposterous. One policy makes carbon emissions more expensive, and one makes them cheaper; it is working at cross purposes.
We need to start thinking of the climate crisis as an economic problem in order to deal with the power asymmetry between fossil asset owners and green asset owners. Viewing the climate crisis as a technical problem of emissions only buys time for fossil capital.
As told to Alasdair MacEwen. Additional editing by Anna Spree.
Jessica F. Green is a political scientist and an expert in the politics of decarbonisation, carbon pricing and global governance. Her first book, Rethinking Private Authority: Agents and Entrepreneurs in Global Environment Governance, examined the role of non-state actors in global environmental politics.
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