Political economy in the era of climate capitalism: Thoughts on Dieselgate, carbon fetishism and libidinal economy
Do you remember the Dieselgate scandal that the German car giant Volkswagen – amongst other automakers – was involved with? In 2015, it emerged that the company had installed software in diesel engines that could detect when they were being tested for emissions. This software manipulated the performance of the engines to improve results during testing. As a result, these vehicles met emissions standards in the lab but emitted up to 40 times more nitrogen oxides in real-world driving conditions. This scandal, which cost VW more than 30 billion Euros, not to mention the significant loss of reputation, has been widely discussed as one of the biggest cases of corporate corruption and fraud. For me, however, this scandal is also an event of what I call ‘carbon fetishism’, the obsession with reducing carbon emissions, often at the expense of other environmental and health concerns.
The picture was AI-generated by using ChatGTP’s Dall-E.
Diesel engines were rarely put into cars until the 1980s. They were big and loud, producing a lot of particle emissions. Then VW invented the TDI – the turbo direct injection diesel engine, which the company started to put into its cars from the late 1980s onwards. VW – alongside the French automakers Renault and Peugeot – developed a commanding competitive advantage in car diesel engines. So, when climate change became one of the hottest topics in the 1990s, and car companies were under pressure to reduce their carbon footprints, the diesel engine was promoted as one of the solutions. This is because they are more fuel efficient, compared to standard petrol engines, and produce less CO2 emissions. German and French automakers lobbied the European Commission hard to promote diesel-powered cars, although it was clearly known that they had a much higher output of other harmful pollutants. These pollutants included nitrogen oxides (NOx), which contribute to the formation of smog and acid rain, and so-called particulate matter, which is made up of tiny particles that can penetrate the lungs and enter the human bloodstream, causing cancer and other health problems.
In the 2000s and 2010s, diesel engines came to dominate the European car industry, thanks to a range of fiscal incentives that the EU Commission and European governments had put in place. In other large car markets, such as the US and Japan, they played a very minor role, given different politico-economic contexts. Air pollution in European cities increased massively during that period, exceeding the EU’s own standards.
I argue that this policy failure and environmental crisis is due to an extreme obsession with carbon emissions that has taken hold of large parts of environmental policymaking and activism since the early 1990s. What I call ‘carbon fetishism’ doesn’t just involve companies and politicians, but an array of academics, consultants, experts and NGO activists. We are talking about a broad system not just of governance but what could be called ‘libidinal economy’.
In their book, “Global Libidinal Economy”, Ilan Kapoor, Gavin Fridell, Maureen Sioh, and Pieter de Vries make a compelling case for the need to move beyond traditional, including Marxist, approaches to understanding political economy. Rather than focusing on the analysis of social relations by understanding economic exchanges, based largely on rational conceptions of human behaviour, Kapoor and colleagues argue for a political economy approach that is based on human drives and desires, which involves a range of unconscious dynamics. Part of their argument is the insight that capital is seen not just as a means to material growth (profit, etc) but as something instilled with a ‘drive’ that seduces and manipulates people for unending accumulation. In critical marketing and consumption studies this is quite an established frame of understanding and critiquing consumer capitalism. In political economy, however, such insight is rare.
Applying the libidinal economy approach to understanding the Dieselgate scandal allows for more nuances to emerge. Yes, VW behaved unethically. Yes, this is definitely a case of corporate misconduct, and senior managers should have ended up behind bars. However, Dieselgate needs to be also understood within a wider system of carbon fetishism dynamics that has emerged at least since the 1992 Earth Summit in Rio de Janeiro, which – now more than 30 years ago – first put climate change and the sustainability discourse on the global agenda.
As climate activists – whether based in NGOs, policymaking or business – have become increasingly vocal about the climate crisis and the urgency that is required for humanity to reduce its carbon emissions, an obsessive focus has been put on counting CO2 and other greenhouse gas emissions. While political economy critiques have addressed carbon commodification and its implications, these analyses often miss the deeper, unconscious attachments to carbon at play here. This is where a libidinal economy perspective becomes valuable. It helps us understand the irrational and unconscious investments in carbon – and, more specifically, investments in the reduction of carbon emissions. These emotional investments are made by street-based activists, climate-conscious business managers and progressive policymakers alike – not to mention the huge global crowd of academics and other experts working in the climate change field.
Let me be clear here. I’m one of these climate activists invested in the belief that we need to urgently reduce global greenhouse gas emissions. Yet, what I’m also keen to do is to not throw the baby out with the bathwater. That is, reducing carbon emissions is not everything. Just to use one example, as I’ve shown – along with many other critics from around the world – simply introducing carbon offsetting mechanisms will not solve climate change –. There is so much evidence out there now to show that carbon offsetting is actually counter-productive, i.e. increasing global greenhouse gas emissions. This is because most carbon offsetting projects are not additional; that is, they would have happened anyway, and hence provide an opportunity for polluters to continue to pollute without needing to reduce their carbon footprints. In addition, there are often manifold social, economic and environmental side effects that are not accounted for. For example, many land-based communities are thrown off their land because it is now being used as certified carbon sink.
“Every technological solution that is out there that promises to solve climate change is reliant on an obsessive need to count carbon, without taking into account the wider social, economic and environmental system at play. ”
Similar critiques can be made of gigantic renewable energy, geoengineering and carbon removal projects that have emerged throughout the world. Every technological solution that is out there that promises to solve climate change is reliant on an obsessive need to count carbon, without taking into account the wider social, economic and environmental system at play. There is no single and no simple (technological) solution to climate change. This is clear. Yet, most climate activists – wherever they are based, in NGOs, businesses or policymaking – still believe that such solutions are out there. If only we invest heavily in R&D, in new, innovative solutions, if we let free the entrepreneurial spirit of capitalism, or – politically on the other side of the spectrum – if the state would take control and come up with a massive ‘climate Marshall plan’ – then everything will be fine. These believers are irrationally and emotionally invested in carbon. They have become carbon fetishists.
The massive European move to diesel-powered private cars – which was actively supported by a coalition of large companies, policymakers and NGO activists – culminating in the Dieselgate scandal in 2015 (the year of the Paris Agreement), was one of the most significant events of carbon fetishism to date. There have been many more, and they continue to take place, yet often stay unreported. For example, one could continue with the car theme and discuss the climate credentials of the fashionable wave of electric cars hitting the streets as we speak. They are all advertised as having zero emissions. Really? Volkswagen and all other car manufacturers know all too well – from their own lifecycle analysis experts – that EVs often have the same or even larger carbon footprints compared to internal combustion engines. Yet, they don’t talk about that in their fancy advertising. Most consumers and climate activists who purposefully go out and buy an EV have at least partially the climate in mind when they make their consumer choice. They are also carbon fetishists, believing that their car choice will positively contribute to reducing greenhouse gas emissions.
The new frontier of social struggles will not be focused on fossil fuels, although companies such as Shell and ExxonMobil are trying hard to hold on to the belief that we can afford to dig oil and gas out of the ground for another thirty years, at the very least. No, these corporate giants have their heads in the sand. The new frontier is the electrification of everything, including cars. This requires a massive expansion of mining of copper, zinc, rare earth and all the other materials needed for electric systems, electric motors and smart infrastructures. So, let’s talk about mining. Let’s talk about the massive social, environmental – and economic – impacts large-scale mining has on communities and countries. It’s not a pretty picture.
Steffen Böhm is a Professor in Organisation and Sustainability at the University of Exeter Business School.