Proponents of private solutions are backed by the (un)imaginative default of private capital — capital that holds the power of financial resource allocation, and can thereby paint itself as the only way forward. Proponents of public solutions are backed by the (un)imaginative default of public goods’ provision — the idea that some goods are simply more efficiently provided by the state.
"The idea that private actors will fully internalise the externalities they are causing, and fully pay for natural capital they have previously considered free, is outlandish" - while this is generally true for the vast majority of firms, the beneficiaries of enormous profits (ie Microsoft, Apple) seem to be doubling down on carbon credits, renewable/nuclear PPAs (power purchasing agreements) and manufacting products with fully recycled** materials. What motivates these corporations to move in that direction? ESG credentials seem very unfashionable today, so maybe it's down to marketing to the climate-conscious? Or is it that, in a shocking move for a public company with quarterly earnings reports, they aknowledge that there won't be a market for much longer if they don't take action to limit their climate impacts? Do these perverse motivations take away from their actions?
I agree that those with above-average supernormal profits have the luxury to internalise a little more, and that these firms in all likelihood recognise the supply chain risks of not moving towards fuller internalisation. I'd push back against the notion that this relatively higher internalisation amounts to full internalisation — although that is a high bar, and depends on how you calculate their baseline impacts (e.g. no factory is better than a materially circular and renewably-powered factory).
"The idea that private actors will fully internalise the externalities they are causing, and fully pay for natural capital they have previously considered free, is outlandish" - while this is generally true for the vast majority of firms, the beneficiaries of enormous profits (ie Microsoft, Apple) seem to be doubling down on carbon credits, renewable/nuclear PPAs (power purchasing agreements) and manufacting products with fully recycled** materials. What motivates these corporations to move in that direction? ESG credentials seem very unfashionable today, so maybe it's down to marketing to the climate-conscious? Or is it that, in a shocking move for a public company with quarterly earnings reports, they aknowledge that there won't be a market for much longer if they don't take action to limit their climate impacts? Do these perverse motivations take away from their actions?
I agree that those with above-average supernormal profits have the luxury to internalise a little more, and that these firms in all likelihood recognise the supply chain risks of not moving towards fuller internalisation. I'd push back against the notion that this relatively higher internalisation amounts to full internalisation — although that is a high bar, and depends on how you calculate their baseline impacts (e.g. no factory is better than a materially circular and renewably-powered factory).
Consumer attitudes, which have consistently inclined towards climate- and eco-friendliness in a number of countries (https://www.pwc.com/gx/en/news-room/press-releases/2024/pwc-2024-voice-of-consumer-survey.html), can't be relied upon though. The IPCC has looked at mitigation pathways which take the demand-side into account, but these pathways are in pretty much all instances reliant on government regulation that encourages shifts in demand (https://www.ipcc.ch/report/ar6/wg3/chapter/chapter-5/).
I would also push back slightly against the climatically benevolent image of big tech. Amazon, for one, uses RECs — Renewable Energy Credits — to claim neutrality (https://www.technologyreview.com/2024/07/17/1095019/google-amazon-and-the-problem-with-big-techs-climate-claims/). A form of carbon accounting that is questionable at best, misleading at worst.