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Why Climate-Conscious Plutocrats Still Like Trump

Attendees at the World Economic Forum in Davos this week say they're worried about global warming. But they're also looking out for their business models.

Fabrice Coffrini/AFP/Getty Images

For the first time in its history, the top five slots in the World Economic Forum’s annual survey of global risks all come from one category: the environment. As no shortage of marketing materials will tell you, the elites gathering this week in Davos, Switzerland, are worried about climate change—so much so that some are choosing to forgo their foie gras and swapping private jet rides for first-class train tickets.

One thing they don’t seem that worried about is Donald Trump. Despite pledges to fight back against an “era of fortress and walls,” WEF founder Klaus Schwab congratulated Trump earlier this week for all the good he’s done in America. “All of your politics,” he said warmly of a man who’d just threatened to expand the United States’ travel ban, “are certainly aiming to create better inclusiveness for the American people. I want to thank you personally, particularly, for injecting optimism into our discussions.” Neither were VIPs visibly bothered last year by Brazilian President Jair Bolsonaro, who dined peacefully between Apple CEO Tim Cook and Microsoft CEO Satya Nadella at Davos 2019.

The specter of Bernie Sanders or Elizabeth Warren winning the 2020 election, on the other hand, has reportedly “concerned” this year’s attendees. During a round of interviews in Davos, outgoing BP CEO Bob Dudley lashed out at Sanders and Alexandria Ocasio-Cortez for the “completely unrealistic” vision embodied in their calls for a Green New Deal, countering that fossil fuels will be around for the foreseeable future.

It’s not exactly groundbreaking to point out the hypocrisy wafting through the crisp alpine air: One percenters have long opined about how to solve inequality as they pay workers poverty wages and suck down ortolan. The climate crisis, though, forces a deeper reckoning that they’re doing everything in their power to avoid, undermining the core tenets of an economic order that’s brought them massive fortunes. Their allegiance to the authoritarians who, no matter how unseemly, will at least protect rent-seeking interests doesn’t bode well for the rest of us.

Capital and authoritarianism—as historian Quinn Slobodian pointed out during last year’s Swiss confab—are old partners. The world’s biggest fossil fuel companies eagerly collaborated with the regimes of Francisco Franco, Adolf Hitler, and the Shah of Iran, among others. For years, the kind of liberal global governance espoused in places like the WEF was thought to be anathema to the right-wing populism Trump and his ilk had been pushing. Yet their priorities—the free movement of goods and profits, but not people; the curbing of “climate risk,” but not the right to emit—aren’t far off from the right-wingers’ demands. “The assumption was that the so-called populists wanted to burn the global architecture down,” Slobodian wrote. “We can now see the dawning of another possibility—a future in which this cadre of right-wing leaders, who were until recently treated as renegades, become its new tenants.” That future, with right-wing “populists” leading the global elite, would also feature rising seas, hotter summers, and stronger storms.

Outside the narrow confines of partisan debate in the U.S., there’s nothing inherently progressive in caring about the climate crisis. For decades, the Pentagon has conducted studies about how to protect its operations and military installations against rising temperatures. Insurance companies have some of the world’s most advanced data on sea-level rise, not because they care but to ensure they aren’t making bad bets on which policies are going to be underwater. Tech firms will be keen to suck up the data generated by a new array of smart home gadgets that enable energy efficiency. There are plenty of sectors already figuring out a path to profiting from the climate crisis.

For the fossil fuel industry, of course, profiting indefinitely in the era of climate chaos will be a bit harder. Its valuations reflect the fuel reserves it owns—the expectation is that it’ll exploit them at some point, translating unburned oil and gas into profits while effectively collecting rents on them in the meantime that it can pour into share buybacks to keep stockholders happy. Should new regulations make those reserves inaccessible—say by banning certain kinds of drilling, or changing fuel prices—the valuation of those companies could plummet. Carbon Tracker, a United Kingdom–based think tank, found several years ago that just 20 percent of those reserves can be safely exploited, leaving 80 percent in the ground, if we’re to avoid runaway catastrophe. Figures have only gotten clearer since. Some estimates suggest that as much as $10 trillion worth of assets could be stranded by some mix of climate policy and climate effects, with ripples throughout the economy. This math isn’t hard: If we’re really going to take on climate change, then, at present, fossil fuel companies are massively overvalued. To protect themselves, they’ve been keen to posit themselves as an indispensable part of the energy transition instead of a barrier to it, protecting their social license to operate oil and gas companies.

Consistent with this strategy of presenting an eco-friendly front, Bob Dudley was careful on air, on Wednesday, to disagree with CNBC Squawk Box host Joe Kernen, who—after calling Greta Thunberg a “17-year-old drop-out”—challenged Dudley as to whether emissions needed to be constrained at all. “We must reduce carbon emissions,” Dudley emphasized. “We must do it.”

But spending speaks louder than words. The world’s largest fossil fuel companies, including BP, have poured an estimated $200 million a year into stymieing climate and energy rules since the Paris Agreement was signed. In the same time period, they’ve spent $1 billion on “branding campaigns that suggest they support an ambitious climate agenda,” according to the British nonprofit InfluenceMap. Between 2010 and 2018, BP invested just over 2 percent of its total capital in low-carbon energy, in line with other oil majors.

Calling out cognitive dissonance at Davos generally hasn’t gotten people very far. Historian Rutger Bregman made headlines last year for pointing out on stage what he saw as the key problem propping up inequality, which no one present wanted to talk about: “taxes, taxes, taxes.” He wasn’t invited back.

For the Davos set, questions of redistribution are apparently off the table. But the problem goes much deeper, especially when it comes to the climate crisis. As economist Mariana Mazzucato has argued, progressives sometimes overfocus on how wealth is distributed, rather than on who and what actually creates it. It’s true, of course, that the world’s richest people aren’t paying their fair share in taxes, by sheltering it offshore and hiring armies of accountants to exploit loopholes they lobbied to include in the tax code. But why do they deserve to be rich? Asking billionaires to pay more doesn’t question their right to make obscene amounts of money in the first place, or what that’s doing to the planet.

Amid calls for more aggressive action on climate, banks, which have furnished $1.9 trillion worth of fossil fuel financing since 2019, have been vehement that they’re nothing more than neutral arbiters of the global economy. “We don’t want to find ourselves being the person that dictates winners and losers. A bank’s job is to support the communities in which it operates. It is not to dictate outcomes,” Citibank Chief Executive Mike Corbat growled from the Alps this week.

Yet designing an economy fit for the twenty-first century will mean making judgments about what’s valuable and what’s not. Are private equity firms really creating a healthier economy when they give a lifeline to struggling coal plants or run utilities into the ground? Should we consider the hedge funders getting rich off Puerto Rican debt—hobbling the island’s ability to respond to climate-fueled storms like Hurricane Maria—productive just because they’ve gotten wealthy doing it? Should fossil fuel companies be allowed to keep drilling just because their products still fetch a high price?

Despite their various—and sometimes obscene—drawbacks, the Trumps and Bolsonaros of the world offer protection from having to answer those questions. More often than not, it’s been social movements and organized labor that pushed for restrictions on corporate excess and called for their economies to chase some goal other than boundless accumulation. Where Sanders and Warren have amplified those voices on the campaign trail, politicians like Trump and Bolsonaro promise to curb such demands and the people bringing them. Whatever their respective positions happen to be on climate change or international agreements, globalists and right-wing populists can agree that corporations should basically have free rein. On stage in Davos, after Schwab’s glowing introduction, Trump boasted about having enacted “the most extensively regulatory reduction ever conceived,” calling regulations a form of “stealth taxation,” while pledging to take on the “unelected bureaucrats” who have imposed “crushing and anti-business and anti-worker regulations on our citizens.” It was music to plutocrats’ ears.

The world’s wealthiest people aren’t stupid. If they ever genuinely denied their private jets were fueling a climate crisis, they’ve clearly ditched that line. Now they want the safest possible passage for themselves through a climate-changed twenty-first century and the social upheavals it’ll bring with it. So far, they seem happy to trust authoritarians to deliver that.