Capitalist economics requires that we function in the realm of competitive markets with the aim of outpricing other companies to capture the market and generate higher profits. For this to happen, companies set lower prices to entice consumers and can only combat this negative source by providing a large supply cheaply. This requires low wages and, more relevantly, cheap technology.
Fuel companies are the main culprits of carbon emissions as they provide the supply of non-renewable energy resources. These companies have been lobbying governments for decades to delay national and global action. They have been aware of the threat of climate change since the 1950s, yet have continued regardless, hiding behind the excuse that consumers are the ones responsible – again echoing this capitalist mindset of the necessity (and inevitability) of consumerism. The aim of growth only exacerbates the issue, finding more consumers to accumulate more capital to invest in expanding the company to increase supply, and therefore consumption, of oil and gas. And so, the cycle continues...
The transition to renewable energy sources is costly as it requires research and the technology needs to be refined to make mass-production cheap. Most companies are not willing to make this jump as it damages their profits, and their technology is already catered towards oil and gas extraction and consumption. Take electric cars for example. These are only just being adapted for popular use. Charging points are becoming more frequent but still lack the capacity for large-scale use, and the time between charges is still an issue that needs technological research, discouraging consumers from buying them.
Companies can find loopholes to base themselves in certain places where they avoid punishment and continue to sell to whoever demands it...
So, what can be done and what is being done to combat this? One route is through government policies that either reward or punish companies for the way they behave in terms of method and output. Unfortunately, this is difficult in our current globalised world because companies can move from country to country and can also act as international entities problematising who is held accountable to which government – or should international institutions have the power to deal with this? Companies can find loopholes to base themselves in certain places where they avoid punishment and continue to sell to whoever demands it, and there will continue to be demand because low-carbon options are less viable to consumers.
A solution that is currently being used is through investment opportunities. Because sustainable development is being promoted to the public now, it is appealing to them to see companies that market themselves as sustainable, but who are also affordable to them. Therefore, companies have investors find sustainable initiatives for them to invest in something they can use as a marketing tool to say they support sustainability. Whilst this does not deal with the issue of poor environmental strategies of that company, at least money is being put into the sustainability sector so the research can be done to produce affordable, sustainable options.
This leaves the question of stranded assets. If the world moves to sustainable options to battle the emergency climate crisis, what happens to the companies that are left with no demand and so useless expensive equipment and millions of workers they can no longer pay? This then comes back to the waste of capital and labour – companies cannot give these up otherwise their whole capitalist endeavour will fall. Governments around the world must find a way to compensate companies for their losses otherwise they will continue to fight against sustainable development and capitalism will inevitably push us into the grave.