47.1 The Science of Climate Discourse

Matthew Haigh , Department of Business Studies, Aarhus University, Aarhus, Denmark
Nicholas Taylor , Outcrop, Fitzroy VIC, Australia
Full Papers
  • Haigh Shapiro Taylor, Joint Actions 2009.pdf (303.2 kB)
  • The paper juxtaposes memberships of the largest institutional investors in the Carbon Disclosure Project against investors' decisions, again en masse, to overlook the pressing problem of access of half the world's population to basic services. Zizek's theory of violence is drawn upon to characterize these decisions.

    The signatory investors to Carbon Disclosure Project Information Requests include the most visible players in the overt centres of capital. CDP claims that the data it collects provides insight into the strategies deployed by investors in relation to climate change. Signatory investors have access to all CDP responses, including those that are not made publicly available. In 2009, the CDP issued a press release claiming that investors routinely used climate change data. Data gathered by the authors justify questions concerning the veracity of CDP data. It is reasonable to hypothesise that investors do not routinely use CDP data in portfolio construction except to the extent that investment horizons are adjusted in line with actuarial predictions. This is not to say that investors are well-informed. CDP signatory investors appear to have convinced themselves of the certainty of climate change based not on scientific evidence but on secondary exchanges made between each other.

    While the investment houses with the majority of the world's disposable wealth wait in the wings to profit from climate change, pressing matters of access to food, clean water, and other basic services for nearly half the world's population remain chronically underfunded.  The need to direct attention toward provision of access to basic services is obvious. Basic services are threefold: primary and secondary education; primary and reproductive health care; HIV/AIDS prevention, care and treatment; and adequate water and sanitation (Faulks, 2000). The World Bank and the United Nations report declining levels of access to basic services in the cities of Asia, Latin America and Africa, and disparities of access attributable to North-South and East-West divides in North America and Europe.

    Pakistan and Burma provide cases in point. Low levels of access to basic services in Pakistan coincide with national levels of extreme poverty (Kimbro, 2002). On access to education, Pakistan has a low enrolment rate into primary schools (59.1 per cent in 2007) and disparities according to sex in the primary school enrolment rates of girls and boys, respectively, at 55.5 percent and 76.3 percent. Disparities in the literacy rates of males aged 15-24 relative to females are, respectively, 75.8 percent and 54.7 percent. Disparities also exist in health care according to sex and higher than expected death rates among girl children. Burma has been in dire need of improved access to basic services since data collection began. Children's access to education is poor. In 2004, 59.9 percent of children in Burma continued to grade 5 and the enrolment rates of girls and boys in secondary school were low at 36.0 and 38.0 percent, respectively. Health indicators are as poor. In 2003, the rate of use of modern contraception by married women was 32.8 percent; the maternal mortality ratio represented the third-highest rate in South-East Asia at 360 per 100,000 live births, and the proportion of average births attended by skilled health personnel was 57.0 percent.

    With the exception of contractors attached to the US-led military, Western investors have fled Pakistan in response to its continued civil unrest. Although some Western investors have announced decisions to divest Burmese-related investments, most have sidestepped the economic sanctions imposed on that country An example of the former is ATP (http://www.atp.dk), a Danish labour market pension fund, which in 2008 completed a divestment of its shares in Chevron (ticker: CVX) and Total (TOT), both holding contracts with the Burmese administration-owned Myanmar Oil. In contrast, Chevron, PGGM—a Dutch health sector pension fund—and China's Cinooc and PetroChina have never divested their Burmese-related investments. Norway's Government Pension Fund, an established investor in oil-related assets, is another.

    The policy of Norway's Government Fund to refrain from making investments in selected industrial sectors (e.g., arms manufacturing) and in companies accused of breaches of UN conventions on human rights appears not to extend to its investments in companies with operations in Burma. Estimates of the Fund's investments in Total and PetroChina (Chevron-owned and an investment of the Fund) are, respectively, USD1.26 billion and in USD27.9 million (October 2007). The Fund's Advisory Council on Ethics has acknowledged that human rights abuses (reportedly, forced labour and forced relocations) have been associated with the construction of the Total- and PetroChina-owned Yadana gas pipeline. The Fund's investments have been justified using argument that its investment policies have application only to current and potential future human rights abuses, not historical ones, and only to companies directly involved in human rights abuses. It is tempting to speculate on the logic behind this decision. US capital gains tax liabilities would potentially accrue to Unocal (ticker: UCL) and Texaco (TEX) (both owned by Chevron) and to Total if they were to pull out of Burma.

    Such ethical difficulties potentially frustrate claims of some investors that their presence has ameliorated the problems of access to basic services persisting in many so-called underdeveloped and developed countries. Even less compunction has been shown in regard to investors' claims of responsibility associated with subscriptions to closed-ended carbon funds and memberships of information clubs such as the CDP. Many of the world's poorest countries stand to lose the most from climate change precisely because they do not have access to any form of wealth, including the ability to participate in economic opportunities. We characterize the claims of socially and environmentally responsive behaviour of the largest investors as a type of metaethics of violence.  Asset allocation decisions made in pursuit of ‘morally clean' prospects—clean and green energy, profitable ‘cap and trade' transactions played between polluting investments—carry the morally dirty cost of overlooking the pressing needs of billions of the world's population.