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System failure

The Gulf of Mexico oil disaster is a symptom of a sickly political economy, argues Tang Hao. Without wholesale reform of global structures, he says, the environment will always suffer.

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BP’s catastrophic oil spill in the Gulf of Mexico has unleashed a chorus of criticism. Some people say it was humanity’s desire for riches that forced open the earth’s crust and brought about disaster. But we cannot change human nature and overcome the urge for profit. The only real way to solve environmental problems is to improve political systems and our mode of economic development. (Likewise, we cannot do away with the human desire for power, but democratic systems have gradually helped to solve what were once vicious political struggles.)

To find the true cause of the pollution, we should look to the basis of the international political economy: that current global economic growth is oil-powered. This has led to economic problems, such as shortage of supply, as well as endless problems with environmental pollution (an oil spill triggered by last week’s pipeline explosions in China’s north-eastern port city of Dalian, is one of the latest examples). And with such a grave systemic issue, even if businesses, governments and NGOs act exactly as they should, environmental disasters will still occur.

Globalisation has seen ever more capital and technology concentrated in the hands of multinational companies. But this has not been matched by an increase in corporate social responsibility. Multinationals have neither the inclination to use technology responsibly, nor the ability to control how that technology develops. Meanwhile, multinationals can easily move their production around the world – avoiding the democratic oversight of any one country.

Operating in an economic structure where ability and responsibility are out of balance, businesses cannot resist the profits to be made by ignoring environmental protection. BP’s slogan is “Beyond Petroleum”, and it strives to create a green corporate image. But it could not prevent itself misusing its power, wealth and technology. This accident was caused by an extraction strategy aimed at turning a quick profit. The gulf between BP’s corporate advertising and the results of its actions shows that the standard procedure – of profiting from environmental damage, then using a small portion of those profits to improve your image – is defunct. Responsibility needs to be exercised while making money, not afterwards.

If multinationals are unable to exercise environmental responsibility, what about national regulations? In this case, US president Barack Obama’s administration chose to allow BP to handle the oil leak. The government lacked the capacity and the funds to stem such a spill: you can’t send the coastguard a kilometre beneath the sea to close a ruptured well.

Moreover, when it comes to the environment, states are not necessarily any more trustworthy than corporations. After the spill began, media reports revealed that members of both the upper and lower houses of US Congress – and particularly members of the Senate Committee on Energy and Natural Resources – had received large political donations from BP. Over the last two decades, BP has made donations to presidential candidates, including Obama, totalling US$3.5 million (23.7 million yuan). And of the 64 federal judges in the five states surrounding the Gulf of Mexico, 37 have links to the oil and gas industry. Close, long-term and institutionalised cooperation between government departments and big business ensures that BP can always enjoy political protection. A system that relies on the power-hungry to solve the problems caused by the money-hungry hardly gives cause for optimism.   

Since the Cold War, political and economic expansion have become intimately linked. This is the main reason why globalisation has been so vigorously promoted by the world’s major powers. US might and multinational expansion have inevitably merged – even if BP is not an American firm, it has many shared interests with the US government. And so the current economic and political framework cannot allow a multinational such as BP to go bankrupt; that would help no one. Obama’s administration cannot do anything to BP, as it needs the company to plug the leak and pay compensation. If BP collapses, there is no party directly responsible for the worsening pollution. The British prime minister, David Cameron, publicly defended BP, not only because of the huge stake in the company held by British pension funds, but because the company’s rise or fall impacts directly on the UK economy and the fate of the Eurozone.

Besides corporate responsibility and government intervention, some put their environmental hopes in the public. But in the current mode of development, the public are more likely to be part of the problem than the solution. In developed nations, consumers’ pursuit of cheap oil drives companies to take risks in extraction and, in the United States, government attempts to regulate the oil sector have struggled to find popular support. In developing nations, the public do not think first about the long-term harm caused by environmental destruction – they are more concerned with the immediate economic benefits. So although the public are, in the long term, the victims – and some have organised a boycott of BP filling stations, for instance – they are still themselves a cause of environmental woes.

The political economy has become unbalanced. Multinationals have no internal motive to protect the environment; government and business are closely linked; the public’s interests mean they indirectly harm environmental protection efforts; and there is a lack of independent oversight – measures that wreck the environment far outstrip those efforts to restore and improve it. And the situation is getting worse: oil firms are moving their wells from the land to offshore and deep ocean locations – a frenzied exploitation driven by declining oil reserves. Resolving the situation requires a systematic response from the international community, not the kneejerk reaction of the United States. This could include: creating a higher technological barrier to entry for oil firms and tighter international environmental standards; strengthening the ability of international organisations to manage the environment and solve issues at a transnational level; and, since clean energy is unlikely to succeed in the market on its own, introducing government policies to limit the use of fossil fuels and subsidise cleaner energy sources.

The Gulf of Mexico oil spill is an ecological disaster caused by humanity’s pursuit of profit – but it will not be the last. Reforming our inadequate international political-economic system and strengthening the supervision of transnational actors will not be easy. But it must be done to solve our environmental problems – and should become the focus of the international environmental movement.

Tang Hao is an associate professor and a columnist. He is currently Fulbright scholar-in-residence at Randolph-Macon College in the United States.

Homepage picture from DigitalGlobe shows an enhanced satellite image of the US oil spill.

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Default avatar
匿名 | Anonymous



John Silkey

Very insightful

Great insights into the lockstep movement of big business and government. We all stand responsible as we have blindly allowed petroleum to become the foundation of the global economy.
I would also add that the pursuit of infinite GDP growth at all costs in a finite world will lead to continued system shocks such as this spill. Until the world economy decouples economic growth from material based wealth, it will be difficult to wedge space between government and big business.
-John Silkey

Default avatar
匿名 | Anonymous



Publicity and radical change

I find that we share the same view, I also believe that the environmental disasters of today are caused by human greed, and the significance of capitalism is to wildly satisfy this desire that humans have. Hence, I think that if we want to reverse this worsening trend, there is only one way: that is to continuously spread the word to everyone around us, and when most people have understood that self control is the only way to have a better life, only then will radical change be successful.

Default avatar
匿名 | Anonymous



企业总是喜欢在政府治理能力较差的地方或者可以滥用社会、生态环境的地方来追求最大利益。但是我们作为消费者并不一定去买他们的产品,而且,在我们知道这样做的后果后,我们很可能不去做这种选择,“购买含有非环保棕榈油的雀巢产品(例如Kit Kat)将会加速环境变化,并且导致猩猩的灭绝。”



Some alternative views

We can not change human nature? Most humans are not greedy. Although society depends on co-operation, humans are not pre-disposed to either follow every fashion or live beyond our means. We are manipulated by big business, politicians and religion.

Companies might choose to locate where they can profit most from poor governance and social and environmental abuse. But we consumers do not have to buy from them, and indeed we might not do so if we are made aware of the implications of the choices which we make. “Buying Nestlé products (such as Kit Kat) whose ingredients include unsustainable palm oil will accelerate climate change and make orang utans extinct.”

If companies have lost their moral compass, then Corporate Social Responsibility, reputational risk, ethical investments, sustainability indices and the like are just rhetoric.

Since the Cold War, the world has willingly become dependent on China for its consumer products. This, climate change, species extinction and the recent collapse of financial institutions are the result of globalisation.

Default avatar
匿名 | Anonymous



Change the public or change the system

The majority of environmental campaigns today are focused on changing the public, but the cause of the environmental problem is economic globalisation and other institutional arrangements, and yet we lack a basic road map for reform at the institutional level.

Default avatar
匿名 | Anonymous


目前社会上存在的所有组织中,最有执行力的仍然是企业,不是政府、不是NGO、也不是消费者。它们最大限度地在影响着地球上每个人的生活内容和方式,可以说是无孔不入。我曾经在BP公司里工作2年,也在其它工业跨国公司里工作了7年,工作过程中拜访过无数个工厂,BP是我知道的最注重安全运营的公司了,所有员工都被告诫要在细节上谨慎小心,防患于未然,而即使这样的公司仍然引发了这么大的漏油的事故和灾难,它可以说是又一个面对整个石油业,甚至整个工业呼唤绿色革命的强烈信号,让我们进一步反思:我们这种“攫取自然资源-生产-遗弃”的方式是错误的,应该尽快真正走上一条即能与自然和谐相处又能促进经济发展的道路,才有可能避免类似地引发环境问题继而经济问题的高风险,让企业能够持续生存下去。对于消费者来说也一样,与其教育他们消除贪欲,限制消费,不如同样向他们专递一种人与自然如何和谐相处的信念,让他们参与到绿色革命的创新大潮中来,一起改变这个世界?毕竟,人也是动物,我们都来自自然,与自然和谐相处符合我们内心深处的愿望。在这个基础上,政府进行政策支持,金融提供绿色信贷... 社会各界互相配合,世界变绿才有希望。

Emma (visavisNet.com创始人)

Crossover Cooperation Centred on Industrial Green Reform is the Key to Solving Environmental Issues

At present, of all the existing organizations in society, the most influential, are not the governments, NGOs, or consumers, but the enterprises. Enterprises have maximum influence on each person's life and lifestyle, and can be said to be ubiquitous. I worked at BP for 2 years, as well as other industrial multinational companies for 7 years. During this time, I visited numerous factories and BP was the company that was most concerned with safe operations. All staff were warned about being cautious to details and to take preventive measures. However, if such a serious oil spill accident and catastrophe can happen to such a company, this could be a strong signal calling the whole oil industry and even the whole industrial field, for a Green Revolution. Upon further reflection, our “take natural resources – production – desertion” method is wrong, we should live in harmony with nature which can also boost economic development; only by doing so can we avoid similar environmental and economic problems from happening again, and enabling enterprises to survive. It is the same with consumers, instead of just teaching them to eliminate greed and limit consumption, why not teach them to believe in the harmony between human beings and nature, let them become the innovative wave of Green Revolution, and change the world together? After all, humans are also animals, we all come from nature, and being in harmony with nature is the desire that is deep in our hearts. On this basis, government can offer policy support, finance can provide green credit policy… A green world can only be promising when people from all walks of life cooperate together.
- Emma (Founder of visavisNet.com)

(Translated by Jieping Hu.)