Climate trillionaires and the limits of meritocracy
This blog is a contribution from one of IIPP’s Master of Public Administration (MPA) students. To find out more about the course, click here.
“The world’s first trillionaire will be made in climate change.” So said (or rather, tweeted) Chamath Palihapitiya, a venture capitalist and CEO of Social Capital, an impact investment firm.
From renewable power to electric cars and smart sensors to carbon sequestration — demand for products and services that help reduce our impact on the world’s environment and climate are set to soar over the next few decades, backed by massive government investment in the EU, China, and possibly the United States.
As the competition heats up to find breakthrough technologies, governments need to decide if the green revolution is another chance for investors and entrepreneurs to strike it rich — or if a climate friendly future needs a different approach.
Climate trillionaires: a force for good?
Many would argue that the prospect of climate trillionaires should be celebrated. The world is desperate for new technologies that may give it a chance of reducing carbon emissions, and further warming. The IPCC has made clear that staying below 1.5 degrees of warming is critical to avoid the worst effects of the climate crisis. If some people make their fortune by helping the world on this journey, then they are getting no more than what they deserve. Proponents of this view might have as their standard bearer Elon Musk: the second richest man in the world who has made his billions from electric cars and energy storage (among other things).
Others take a different view. Jason Hickel, an economic anthropologist and author, argues that “we can’t have billionaires and stop climate change.” He points out that the carbon emissions of the richest in society vastly outweigh the emissions of the poorest, with the wealthiest 10% being responsible for over half of the world’s emissions. But it’s not just carbon emissions — the lifestyles and investments of the mega-wealthy place too great a burden on the planet in a range of ways. Even if all our power comes from wind farms and solar, we will still have to deal with deforestation, increasing waste, damage to natural habitats and more whilst our economic system enables essentially unlimited consumption for a lucky few.
Viewed this way, excess wealth — even if earned from carbon reduction innovation — is not something to be celebrated. This emphasis on moving beyond carbon reduction alone is at the heart of Kate Raworth’s Doughnut Economics. Raworth outlines nine planetary boundaries, “beyond which lie unacceptable environmental degradation and potential tipping points in Earth systems.” In combination with ensuring that everyone is able to lead a minimum standard of life (as defined by the UN Sustainable Development Goals), those nine boundaries form a safe and just space for humanity to thrive.
“the lifestyles and investments of the mega-wealthy place too great a burden on the planet in a range of ways”
This is a radical reframing of the problem — from carbon reduction to climate justice. It builds on a long history of advocacy from activists and scholars since the term ‘environmental justice’ was first popularised in the United States at the 1991 National People of Colour Environmental Leadership Summit. And framing matters. As Robert Benford argues, how a problem is framed constrains the range of possible “reasonable” solutions.
Whilst there are some positive signs that governments are moving towards this approach (such as the growing support for a Green New Deal in the US and UK, and Amsterdam’s embrace of the Doughnut model), it is far from the policy mainstream. Whilst many countries have committed to becoming ‘net zero’, in line with the Paris Agreement, those commitments focus almost exclusively on carbon reduction.
It’s a shift in focus that needs to be made. But the framing of climate action is not independent of our other beliefs. In particular, it depends on our beliefs about success and value. Unless the climate movement confronts these head on, bringing climate justice to the fore will remain an elusive goal.
A longstanding commitment to meritocracy…
In the UK, political leaders of the 21st century from all sides — from Tony Blair to Theresa May — have aspired to make Britain a ‘true meritocracy’, meaning a society where success is determined by your talents and efforts, rather than the class you were born into. The idea that everyone should be able to pursue their passions is surely common sense.
But the focus on supporting the ‘best and brightest’ to excel has significant downsides, as recent books from Michael Sandel and David Goodheart explore. ‘Smart’ people become too powerful. Inequality is both entrenched and given a moral justification, as the ‘winners’ believe that their success was earned. Ideas of the common good, equity, and justice fade into the background, pushed behind policy agendas that strive to deliver ‘equality of opportunity’ instead. That a perfect meritocracy would be a bleak place to live should come as no surprise — the word was coined in Michael Young’s The Rise of the Meritocracy, a satirical novel that ends with a cold and heartless intellectual elite ruling over everybody else, and ultimately in revolution.
Beyond the dystopian picture of a ‘perfect’ meritocracy, the deeper problem for the project is that it is built on a flawed understanding of success. For one thing, assuming that each individual is fully in control of their own destiny minimises the role of luck. As Warren Buffet recognised, “the womb from which you emerge determines your fate to an enormous degree for most of the seven billion people in the world.” The country you are born in, your gender, ethnicity, parents’ education and more — all are random events that shape (although do not fully determine) your future. Ignoring this fact makes people less generous and less public-spirited.
…means we have forgotten how value is created
More importantly, a meritocratic view of the world sees success primarily as the outcome of individual efforts. If you create a great work of art, a successful company, or a breakthrough technology, it is your success alone. The Silicon Valley mythologising of tech entrepreneurs and CEOs is the logical endpoint of this view of the world: ‘great man theory’ assumes that innovation comes from inspired individuals who risk everything to make their dreams a reality. Investors and entrepreneurs are the real ‘wealth creators’ in society — and the rest of us should just be thankful for their (often creatively reduced) taxes and employment.
However, as Marianna Mazzucato has argued, value is created collectively, not just by individuals. As she says, we need to recognise “that innovation is collective: the interactions between different people in different roles and sectors (public, private, third sectors) are a critical part of the process. Those who might otherwise be seen as lone entrepreneurs in fact benefit from such collectivity.” It is also cumulative, as it comes on the work of those who have gone before.
The COVID crisis has provided a vivid reminder of this collective nature of value. We lined up to applaud underpaid essential workers — nurses, delivery drivers, supermarket workers, teachers and more. Despite many being dismissed as ‘low skilled’ by the UK government, they turned out to be of utmost importance in generating wealth and prosperity. The public sector provides the platform from which entrepreneurs build, but is also itself entrepreneurial — taking on risk and acting as investor of first resort in many innovations.
If meritocracy is a bad way of understanding success, what could replace it? How should we understand the impact of the individual in a world of collective value creation? A starting point could be grounded in a notion of contingency, or dependence. The success of an individual is dependent upon a huge range of factors. As well as their own talent and efforts (which, of course, are also dependent on parents and upbringing), it is dependent on your school and teachers, your friends and network — as well as raw luck.
Contingency is not fatalistic — your life is not determined, and everyone has the agency and power to be the author of their own lives. But it should remind us to be humble with our achievements and sympathetic to others’ hardship, as there is less to separate the two than we like to pretend.
Reframing climate action
By allowing us to understand success in a way that emphasises the collective nature of value creation, contingency brings us full circle back to the question of climate trillionaires. The problem with a climate trillionaire is that it just doesn’t reflect the broad social and collective contribution made to those businesses that do succeed. Reaching net zero will require collaboration from all types of actors. Publicly funded R&D will form the basis of much of the technical knowledge, as it has for the COVID vaccines being rolled out at the moment. Demand for climate friendly products and services is being driven by the tireless work of activists. And governments will be using their regulatory powers and procurement budgets to create and grow the carbon free energy markets that we need.
“The problem with a climate trillionaire is that it just doesn’t reflect the broad social and collective contribution made to those businesses that do succeed.”
Along the way, we hope that entrepreneurs and innovators, scientists and business people, will discover new products and services that make the journey easier. They deserve their success and our congratulations.
But those innovations should not reinforce the place of millionaires and billionaires, or lead to the world’s first trillionaire. That would mean that we would have failed to confront the root cause of the problem — a model of capitalism that allows extreme wealth extraction by the very few, whose lifestyles and investments do disproportionate damage.
Figure 1: Framing success, value and climate
To succeed in reframing the debate along these lines, climate justice campaigners need to confront the dominant paradigms about success and value. These core beliefs determine the type of climate action that makes sense. In a world that believes in meritocracy, in which success is personal and value and wealth are created by heroic individuals, it is natural to welcome climate trillionaires as our saviour, delivering us to a low carbon future. But a more nuanced view of success, which recognises its contingent nature — dependent on both luck and other people — supports the idea that value is created collectively.
Seen in this light, breakthrough climate technologies are a collaboration between state, businesses, entrepreneurs and civil society — and as such, the benefits and rewards from those technologies should be widely shared, and the downsides of extreme wealth acknowledged.