ive here. Readers may perceive the title as “a dog bites a man,” but presumably the best of them can expect to be treated with a great deal of respect. That includes not being hypocritical at Davos, such as acting as if they will of course maintain their extravagant lifestyles while the lower orders make sacrifices, including on the climate front, for them.
By Paul Rogers, Professor Emeritus of Peace Studies in the Department of Peace Studies and International Relations at the University of Bradford, and Honorary Fellow of the Joint Service Command and Staff College. He is the international security correspondent for openDemocracy. He’s on Twitter at: @tweet. Originally published at openDemocracy
The 2023 World Economic Forum (WEF) meeting in Davos started five days ago in a mood of pessimism.
Months earlier, 73% of business leaders surveyed by PricewaterhouseCoopers expected a decline in global growth in the coming year, with inflation, volatility and geopolitical conflict high on the list of risks. This is not a surprising number considering that 2022 ended with global equities down nearly 20%, with market losses of $30 trillion, the worst since 2008.
Despite this bleak economic outlook, the first three days in Davos were covered with discussions on trade issues between the European Union, the United States and then Ukraine, with German Chancellor Olaf Scholz and President Zelensky being the main speakers.
But the third day of the summit also saw a speech from UN Secretary-General António Guterres, who emphasized the urgent need for radical decarbonisation, as well as the amplification of systemic global inequality through a “morally bankrupt financial system”.
The forum’s founder, Klaus Schwab, has always wanted to examine broad global problems, but often smaller specific issues dominate the discussion, with issues such as Guterres’ concerns about social and economic divides and climate breakdown sidelined. Davos top companies and opinion makers focus on short-term results and shareholder requirements for solid returns, not long-term challenges.
Schwab himself would be critical of traditional shareholder capitalism and is keen on what he calls “stakeholder responsibility” or “stakeholder capitalism,” which aims to replace the primacy of profitability and shareholder reward with a broader concern on issues such as climate change and economic marginalization. This in itself might be a dubious concept – but in any case, there is little evidence that such a shift is in the future for the Davos elite.
Two stark examples of the lack of change emerged around the time the World Economic Forum began. The first concerns one of the few achievements of the COP26 climate summit, the Glasgow Financial Alliance for Net Zero (GFANZ), a gathering of 450 organizations in 45 countries with assets exceeding $130 trillion. The members’ collective goal was to coordinate their investments to help limit the global temperature rise to 1.5°C.
However, the indications in the past year reveal little change in behaviour. According to Reclaim Finance, among banks allied with GFANZ, the 56 largest banks in the world have invested $270 billion in fossil fuel companies for expansion, while the 58 largest member of the asset management group within GFANZ holds $847 billion worth of assets in fossil fuel companies.
It may take time, but we don’t have time.
The second example of business as usual is confirming a long-held suspicion that fossil fuel companies have known for decades from their researchers that climate change is directly related to the burning of fossil fuels.
A new study by analysts at Harvard University and the Potsdam Institute for Climate Impact Research finds that scientists at Exxon, the world’s largest fossil fuel company, “were implausibly accurate in their projections from the 1970s onward, projecting an upward curve of global temperatures and carbon dioxide emissions that are approaching of matching what really happened with the world heating at a pace not seen in millions of years.”
The researchers examined more than 100 company documents and peer-reviewed scientific papers covering the period from 1977 to 2014. Keep in mind that by 1977 activists were already debating green policies in relation to fossil fuels. The first period of concern about climate came in the mid-1970s after the publication of The Limits to Growth in 1972.
Exxon’s response has been to conduct its own studies — with those unexpectedly accurate conclusions. If Exxon had invested serious money in renewables, other fossil fuel companies would have followed suit and we would have been at least an additional decade on the road to a decarbonized world. Instead, it doubled down on rejecting science and went all out to exploit fossil carbon for as long as possible.
If global warming and climate collapse figured a bit at Davos, the same is true of Guterres’ other concern: systemic global inequality. As with climate issues, there is little new in this: inequalities have become extreme as the dominance of market fundamentalism fosters an environment of runaway wealth. However, the way the financial turmoil caused by the Covid-19 pandemic has allowed massive increases in wealth for a few people is nothing short of amazing.
In the four-month period from April to July 2020, with lockdowns still in place, the world’s $2,189 billionaires increased their wealth by a staggering 27.5%, a great example of “disaster capitalism” in action.
This year, Oxfam has set its annual report on wealth distribution again to coincide with the start of the World Economic Forum, providing more evidence of system failure for the majority of the world’s population. It reported that since January 2020, 63 percent of all new wealth generated — about $26 trillion — has gone to the richest 1 percent. She also noted that for the first time in a quarter of a century, the rise of excessive wealth was accompanied by an increase in extreme poverty and called for wealth taxes to be imposed on the world’s super-rich.
This is unlikely to happen on any scale, so the prospect of a world so bitterly divided and environmentally limited looms large. As the economic geographer Edwin Brooks put it more than half a century ago, the danger is “a crowded, glowing planet of massive inequalities of wealth, sustained by stark force but endlessly threatened by the desperate people of global ghettos.”
It doesn’t have to be.
At least on the climate issue, change can happen quickly. Public anxiety is about to turn to anger at political inaction, just as the danger of repeat wild-weather disasters emerges. This parallels the rapid emergence of viable options for radical decarbonization that, for now, can be implemented fast enough to prevent the worst excesses of climate breakdown.
It may not do much to transform neoliberal economics into a truly sustainable alternative, but public consciousness facing the challenge of preventing climate collapse can pave the way for economic transformation. Just don’t expect the World Economic Forum to be anywhere near the vanguard of change.