Eduardo Gudynas’ analysis on the role of business at the COP26

Raquel Luna –

The following is a summary of the report “Negotiating Climate Change: the Ongoing Failure of Conventional Politics”1 by Eduardo Gudynas published on 3.12.2021. Although the report reviews the general outcomes and dynamics of the COP26 in Glasgow, Scotland, the focus of this summary is on the trends and dynamics of the involvement of business in resolving the climate crisis. The report was published jointly by OLCA (Observatorio Latino Americano de Conflictos Ambientales) and CLAES (Centro Latino Americano de Ecología Social).

Gudynas brings to light certain trends and dynamics that are materializing at the COP26 and that form part of a larger trend and dynamic in development cooperation.

Market mechanisms to the rescue

Gudynas mentions the intentions to achieve some environmental goals through regulations on international trade in goods. This is part of the trend of governments and multilateral organizations ceding increasing roles to corporations regarding the funding and management of the climate crisis and energy matters. Gudynas acknowledges that this trend ultimately raises the discussion regarding the role of national sovereignty.

Gudynas stands out: first, some governments of industrialized countries are considering imposing measures on international trade linked to performance towards climate change. Such mechanisms could result in enormous pressure on some commodity-exporting countries, usually from the global “south”. Gudynas considers that such measures can be more effective than the voluntary measures agreed in Glasgow. For example, restrictions on imports of goods that are products of a high carbon footprint would force exporting nations to change to other technologies or even change the goods they export.

Regarding measures on international trade, “three types of mechanisms are currently being considered. One is to condition imports depending on CO2 emission reduction standards. The most current example is the US-EU agreement on trade in steel and aluminum. In this case, trade between the US-EU is made more flexible and at the same time a barrier is installed to other suppliers that offer these metals but with a high carbon footprint.” Gudynas mentions how China, which manufactures steel largely through subsidized energy mainly from coal-fired power plants, will be affected. It could also affect Brazil’s aluminum with its large carbon footprint. Gudynas considers that this case is being closely watched as it is the first trade agreement signed by the US to include conditions linked to climate change.

A second case is the Carbon Border Adjustment Mechanism (CBAM)[25], which is a carbon-pricing system for imports into the European Union in compliance with WTO rules. “This is an initiative underway in the European Union under its well-known Green Pact, which seeks to avoid unfair competition in importing goods that are obtained with a large carbon footprint.” The CBAM will be implemented gradually with iron, steel, aluminum, cement and fertilizers, and electricity generation. Gudynas mentions that it could include agri-foods soon and it is causing concern in large agro-exporters. Countries like Japan and Canada are planning similar initiatives.

According to Gudynas, the approval of the International Methane Emissions Observatory (IMEO), promoted by the United Nations Environment Program (UNEP) and supported by the European Union, follows the same logic as it will provide global records to be taken as reference.

“Finally, internationally agreed tariffs could be applied to imports of carbon-intensive goods. This is a trade mechanism proposed by some academics, which would involve coordination between World Trade Organization rules and environmental and climate agreements or indicators. Its rationale is similar to the recent global minimum tax installed by the G7 countries, which imposes at least 15% on corporations.”

All these mechanisms are under discussion or in the initial stages of implementation. Beyond that, what they show is that we are approaching a situation where trade rules will adopt some conditionalities in terms of greenhouse gas emissions in traded goods. Gudynas notices that countries in the global “south” –such as countries in Latin America-, have little room for maneuver to deal with these changes in global trade and they tend to be very dependent on global exports.

Gudynas does not explicitly mention it, but these market mechanisms that affect the price of goods do not take into account justice. Arguably, carbon pricing affects the affluent less while the poor carry more of the burden. The affluent can afford the price.  

The need for business involvement 

For Gudynas, it is key to notice that several of the agreements signed in Glasgow place businesses (especially large corporations and even billionaires) as partners or collaborators of governments. “The most obvious purpose is to turn to them for additional financing. In some cases, this is achieved through philanthropic mechanisms, such as donations from some billionaires, but in most cases, they are articulated with partnerships and joint ventures that have expectations of profitability, as mentioned above. It should be noted that these positions are in turn in dispute with other corporations that resist, reject or question both climate change and any type of partnership with them in this field, as is the case with mining and oil companies.” Interestingly, Gudynas perceives such disputes between corporations as “a discussion between corporate management styles’ ‘.

More importantly, “there is the danger that a substantial part of national and international policies will be privatized in direct or indirect ways”.

Regarding the questioning of rational sovereignty, Gudynas states that “it is argued that some ecosystems, such as the Amazon, play an ecological role on a planetary scale and therefore other countries could impose conditions on Amazonian nations to force them to protect it. Some go a few steps further, considering that the concept of national sovereignty can no longer be applied in the 21st century in the face of some planetary environmental problems. A conflict that exposed this tension occurred in 2019 when French President Emmanuel Macron held Jair Bolsonaro of Brazil responsible for the serious forest fires that occurred at that time. At Macron’s request, the G7 countries discussed the Brazilian management of the Amazon forests and as a reaction, Bolsonaro wielded a strong nationalist discourse. Since then, a change is underway in the position of some northern governments that considered climate change as part of environmental policies, to start looking at it as a matter of national security and international trade.”

Gudynas notices, “this perspective is fraught with problems that pose enormous risks for Latin American countries”, but it also poses enormous risks for the global “south”, as it jeopardizes national sovereignty.

The reflection needed, according to Gudynas, is for countries to find the fairest ways to rethink and design sovereignty through the respect of human rights and the protection of nature.

The blurring lines

For Gudynas, the Glasgow climate summit is part of what appears to be important geopolitical changes that go beyond the reconfigurations between north and south. It goes beyond the question of whether China is considered as part of the global north or the global south. Or how the notion of the polluting, industrialized and rich global north opposes the poor and the developing global south. Gudynas argues that both, governments in the global north and the governments in the global south, are equally unable to commit to the reduction of greenhouse emissions and still support and subsidize big corporations and polluters.

The biggest delegation at the COP26

The biggest delegation –if we can call it as such – at the COP26 was that of the fossil fuels industry with 503 people. It surpassed Brazil, the country with the largest delegation. According to Gudynas, “more than 100 corporations and 30 business organizations focused on oil and coal interests were represented, and were also included in the delegations of at least 27 countries (such as Russia, Canada, and Brazil)”. Gudynas continues, “this number doubles, for example, the number of participants from indigenous organizations, and is larger than the combined government delegations from eight countries heavily affected by climate change (such as Haiti, the Philippines, the Bahamas, Bangladesh or Pakistan)”.

Gudyinas concludes “the addiction to fossil fuels dominated the COP26, it is present in the “north” and the “south”, because it is present in almost all political party ideologies. It is a pre-political condition in the sense that it affects most party political ideologies.”

It is important to notice that the precondition is not only the addiction to fossil fuels but that of business of profit over people, over nature, over life.

The pre-political condition

A crystal-clear example of this pre-political condition appears in the agreement between the United States and China during COP26 in Glasgow. John Kerry (from Washington’s corporate capitalism, with its representative democracy, and military and commercial imperialism) and Xie Zhenhua (from Beijing’s developmentalism, a communist party, stratified entrepreneurship and citizen control, and its planetary commercial deployment) coincide in conventional development. Gudynas confirms that two different partisan political regimes overlap largely on their aim of economic growth at all costs; they encourage domestic consumerism and they do not hesitate to externalize their environmental impacts to the rest of the planet.

“Both make speeches to curb climate change, but each defends the fossil fuels it needs (China does so with coal, the United States with oil). This makes it clear that the conventional policy observed in the countries is addicted to fossil fuels.” … But not only fossil fuels, but, put simply profit for profit. Their speeches are after all just announcements of good intentions for no concrete measures were provided.

The business savior complex

The absolute need for business is the position led by Joe Biden from the US, “conceiving business as a major financier of changes in the face of climate change”. This inevitably implies privatization. This is a privatization that transfers the management of multiple sectors, such as wind or solar energy equipment, lithium mining, etc., to the corporations of the “north”. These, in turn, are extended to the nations of the “south”, thus reproducing the well-known mechanisms of subordination”. Gudynas acknowledges that some business options that are presented as environmentally friendly alternatives in the “north” have severe ecological and social impacts in the “south” (for example, the case of lithium mining for electric cars and other “ecological” purposes).

Gudynas mentions a concrete expression of this trend: the creation of the Glasgow Financial Alliance for Net Zero (GFANZ, https://www.gfanzero.com). This is a coalition of large banks, investment funds, insurance companies, and financial risk analysts (450 financial firms across 45 countries) that promise to mobilize 130 trillion USD. At the top of such alliances are well-known finance household names: Mark Carney, Mike Bloomberg, and Mary L. Schapiro.

The celebration of continued failure

In all, the solutions mentioned above treat the climate crisis as market failures to fix or as a matter of optimization of the markets. There seems no acknowledgment of the fundamental problem of this system. The initiatives at the COP26 seem to have teeth and grip largely when they involve market mechanisms, technocratic solutions, and invariably and inevitably, voluntary private business commitments and partnerships… for profit.

The growing role of business at the COPs represents the clear expression of the real centers of power.

The COP26 was acknowledged discreetly by governments as the extension or continuation of more than two decades of failure. “Many may argue that progress has been made, and some can indeed be identified. But as regards the concrete and priority purpose of the entire negotiating process initiated in 1992, which is to halt climate change, to date they have not achieved it.” Gudynas accurately calls the conventional politics of the COP26 necropolitics.

Source:

1. http://gudynas.com/wp-content/uploads/GudynasCambioClimaticoFracasoPoliticaDic21.pdf