3 Landscapes of RiskFinancial Representations of Catastrophe

Mark Hudson

In late June 2017, the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD), led by billionaire Michael Bloomberg, founder and CEO of the financial services and data firm Bloomberg LP, released its final report (TCFD 2017). A week later, another financial heavy hitter, Mark Carney—governor of the Bank of England and chair of the Financial Stability Board at the time—presented the report to heads of state at the G20 summit in Hamburg. The report, which was given a considerable amount of space in the mainstream business press, recommended that companies reveal their climate-based risks to investors, in order that consideration of such risks might become a standard part of investment decisions. This has been a goal of climate campaigners for some time—particularly those operating through shareholder activism. On the surface, such disclosure could result in a significant revaluation of firms and their share prices, by making visible what the TCFD report calls the “material risks” of climate change. As one member of the task force put it, by shedding light on “the fact that climate-related risks and opportunities can be material, and increasingly will be material,” the report aimed to make these risks “clear and comparable—that is what the investment community wants” (McCarthy 2017).

Disclosure such as this is supposed to make markets work more efficiently. However, acts of revelation often simultaneously serve to obscure, as any decent magician will tell you. While recognizing that a significant shift has occurred in corporate practice and discourse relating to climate change, in what follows I lay out how the modes of revealing climate change currently being developed by financial firms have the potential both to dramatically change the public understanding and the politics of climate change as an environmental problem and to serve to obstruct a robust, democratic political response to the threat of climate catastrophe.

From Denial to Risk Management: Two Fronts of the Corporate Response

Gone are the days when CEOs of major companies or even politicians could publicly deny that climate change is happening or that human activities are the main driver. Even the most notorious agents of climate denial such as Exxon, which obscured what it knew about the connection between its main product and climate change, and which funded the “merchants of doubt” (Oreskes and Conway 2010) in their campaign to sow uncertainty over climate science, can no longer simply say “It’s not happening” or even “We don’t know if it’s happening.” Forced to acknowledge that climate change is real and human induced, Exxon publicly endorsed the Paris Agreement and said that it would support a carbon tax. Clearly, what Exxon says and what Exxon does are far from identical. While acknowledging climate change, the corporation remains wedded to a business model that, if it is allowed to continue, will put us well over the 2ºC “safe” average global warming threshold. Its demand projections and planning models assume that we will overshoot. Research from the Corporate Mapping Project has unearthed the emergence of a “new denialism” along these lines, describing a shift from good old head-in-the-sand denial that there is a problem or that we are in any way responsible to a public acknowledgement of the problem, its severity, and its genesis in human activity, all the while working the back channels to ensure that no action is taken that would actually address the problem. That is, the denial concerns not the science but what the science implies for policy (Klein and Daub 2016).

Corporate and government inaction aside, acknowledgement of anthropogenic climate change is widespread among political and economic elites globally. It features prominently at elite policy gatherings like the World Economic Forum in Davos, Switzerland. Of course, this consensus on the reality and significance of climate change has emerged within the parameters of another one: that any steps taken toward adaptation and mitigation must occur within current social relations; that is, they must not seriously threaten the conditions for accumulation, and while steps are sure to result in winners and losers across sectors, they will take place within existing relations of property and power. Now that political, industrial, and financial elites have decided that they cannot ignore the unpalatable mess of climate change that they have created (Heede 2014), they are asking how they might attempt to digest it, without causing too much internal damage and, preferably, while getting some joy out of it. In addition to the strategies being worked out by networks of capitalists to obstruct political action on climate change, there is increasing effort to make the biophysical and meteorological effects of climate change comprehensible and actionable (commensurable and exchangeable) to market actors.

So there is a two-front class-based response to climate change, intended to manage the implications of climate change for profitability and accumulation. They align with the two primary ways that capitalists, as a class, must understand and treat nature. The first of these, as Mann and Wainwright (2018) indicate, is as a collection of resources. That is, it is a storehouse of raw materials that can be put to use in the creation of commodities and, in turn, value. In this vein, we see corporations scrambling, through the new denialism, to maintain their access to the fossil fuel storehouse. The second way that nature is apprehended, however, is as an element of uncertainty, risk, and hazard to the production of value. Forests, for example, are increasingly seen as ticking time bombs of value destruction given their (increasingly catastrophic) tendency to catch on fire. Where once there was timber, now there is fuel. Oceanfront once contributed to property value; we may now be at a point where the menace of storm surges and flooding detracts more than the view adds (Luscombe 2017). While some parts of the business lobby are busy staving off any genuine political action that might reduce their ease of access to fossil fuel resources and to the atmosphere, the financial industry has for some time been becoming attuned to the potential threat to profit (and perhaps to accumulation overall) posed by climate change itself. This latter front began to develop with the growing realization among particularly exposed or sensitive elements of capital that, in fact, real economic costs—discussed as “material risks”—were starting to emerge that are related to climate change. In what follows, I attempt to trace the contours of this second front and to consider its implications for the status of nature and for climate justice. Is this transformation of how we see, understand, and act on the problem of climate change a successful “mainstreaming” of climate action, or is it another obstruction on the pathway to just and sustainable societies?

One of the ways we can think about how climate change presents risks for profitability is through the concept of “negative value.” This is a concept put forward by Jason Moore (2015a, 2015b) to talk about the possibility that rather than providing appropriable value to capital through the provision of “free work,” reorganizations of socioecological arrangements can sometimes actually inhibit accumulation. Moore (2015a, 98) defines negative value (in contrast to surplus value) as “the emergence of historical natures that are increasingly hostile to capital accumulation.” In the case of climate change, Moore describes how “capitalism’s wastes are now overflowing the sinks, and spilling out over the ledgers of capital” (279).

While Moore argues, I think correctly, that the obstacles to accumulation presented by climate change are unavoidable by capital as a whole because they act to directly increase the costs of production (see Risky Business Project 2014), the distribution of negative value among firms (that is, when and where disasters or changes in weather patterns that have cost implications occur) has become the subject of competitive manoeuvring such as efforts to “climate proof” businesses against weather-related supply-chain disruptions or to socialize their costs. Many of the forms taken by capital’s response to climate change, which we will sample below, can be understood as efforts to diversify and spread risk or to transfer the costs of climate change (its negative value) onto other parties.

The redistribution of negative value from climate change certainly involves political action. Firms, industries, and associations lobby and backroom deal to reduce political risk by minimizing or displacing costs of regulation. They also, through image management, attempt to maintain or gain market share by greening their corporate images.

It also involves market action—reallocating capital, changing asset mixes and investment portfolios, managing supply chains, and creating new commodities, all of which depend on the creation of credible (not to be confused with accurate) information that firms and investors can act on. This information must eventually take the form of a number, for the simple reason that in order to be of use to market-based actors, it has to be related to a price. The work that goes into the creation of this information I call the work of digestion. It involves the transformation of place-bound, relational, qualitatively heterogeneous effects and phenomena (like wildland fires, or melting arctic sea ice, or drought) into seemingly unbound, isolated, homogeneous quantities that eventually find their way into prices and, through those, into new allocations of social labour and new relationships between humans and extra-human nature. I believe digestion to be an apt metaphor for this because it involves a diverse, qualitatively heterogeneous range of things (think apples and oranges) being inserted at one end and, at the other, the production of what looks and feels like a fairly homogeneous quantity: a substance varying largely by some commensurable unit, like weight or volume. It may in fact vary in quality from others of its kind, but we would rather not look closely enough to find out.

In order to get a solid handle on what I mean by digestion, and on how capital is working to translate the messiness of climate change into an order it can handle, we can look at the products of digestion—primarily new kinds of commodities and tools for modifying the value of existing commodities. The most obvious of these are carbon emissions allowances, or offsets. A great deal of ingenuity goes into translating a landscape into separable units of potential carbon sequestration: what is bought and sold as a credit for a tonne of carbon either sequestered or never emitted is in fact a set of modified ecological and social relations, and it requires some intricate accounting and a few fairly heroic assumptions to transform these relations into a tonne of carbon not emitted (or its equivalent in other greenhouse gases, expressed as “CO2e”). However, while carbon credits get a lot of attention, they are as yet a boutique kind of commodity for which governments and firms are struggling to make and maintain markets. Other products of digestive work have broader consequences, potentially affecting every commodity price and every investment decision.

Climate Change Risk Indexes

One of the functions of digestion is to provide better information to investors and traders. From the perspective of capital, the key questions with regard to climate change are these: What is going to happen to the price of wheat, rice, natural gas, or herring, or the value of land, factories, or real estate, as climate change destabilizes the biological and biophysical conditions of production? How can investors or firms make informed decisions about assets and commodities in the face of this destabilization? Is there a way to turn “climate change” into a number that can modify my net present value calculations? This is the practical dimension through which climate change is a problem for capital.

The “problem” of climate change can, however, be constructed in a number of ways. One of these—certainly one that is plausible—is to construct it as a form of “catastrophe risk” (see Cooper 2008, 82; Haller 2002). In this framework, we are confronted with the dilemma of having to take action in the face of irreducible uncertainty. Having a very strong suspicion that something really terrible is going on, combined with an inability to calculate its likelihood, or to “pinpoint the precise when, where and how of the coming havoc” (Cooper 2008, 83), leaves us in a bind, with no calculable basis for action, but also with the sense (in some cases very well empirically grounded) that terrible things will occur in the absence of action. For that portion of humanity with the most grounded, experiential, or proximate sense of impending, irreversible disaster (pick a small island state whose coastlines are shrinking, for example), this kind of framework makes sense and impels a moral requirement to act even in the absence of certainty. Capital, however, has a hard time operating within this framework. Incalculability is just one more limit to overcome. As such, firms reject this construction of climate change in favour of the much more comfortable framework of risk management. Here, morality exits the picture, crowded out by the fetish of numbers. Likelihoods are calculated—partly through the hive mind of insurance and investment markets and partly through increasingly sophisticated modelling techniques, often developed at the outset in universities and then made proprietary and dispensed on a (hefty) fee-for-service basis.

For example, there are a number of efforts to do a coarse-grain, nation-by-nation quantification of climate change risk. This form of digestion attempts to take the multiple forms of material transformations and “vulnerabilities” faced by a particular territory and relate them quantitatively to those faced by all others. All of these rely to some extent on the notion that risk is a product of vulnerability and “readiness” or “resilience.” The Notre Dame Global Adaptation Initiative, for example—a project housed at the University of Notre Dame—defines its ND-GAIN Country Index as a “measurement tool that helps governments, businesses and communities examine risks exacerbated by climate change, such as over-crowding, food insecurity, inadequate infrastructure, and civil conflicts.”¹ The index assigns countries scores in two broad categories: their vulnerability to climate change and their readiness to adapt to it. Each of these scores is based on forty-five indicators related to food, water, human habitat, ecosystem services, economy, governance, and social readiness. These indicators, of course, embed all sorts of political presumptions about what makes for a “ready” or “resilient” state—things like control over corruption, business climate, educational attainment, or the debt-to-GDP ratio. ND-GAIN, for example, uses the World Bank’s “Ease of Doing Business” index as the economic component of its “readiness” indicator. This is an index of how easy it is to start and profitably operate a business in any given country: a country with high levels of investor protection and low levels of regulation and taxation is deemed more “ready” than a country in which regulations (possibly including environmental ones) or licensing processes make setting up and running business operations more risky and difficult. Index scores can be used as intended by the project as a basis for identifying priority locations for climate change adaptation but equally for discounting investments in low-scoring nations. As of 2017, Canada ranked thirteenth out of 181 countries on the global list. Norway was the front-runner, with Somalia coming last.²

Other platforms offering the same sort of information are presented more explicitly as tools for investment and corporate risk management in the face of climate change. Investment bank HSBC, for example, developed a climate change scorecard for nations in 2009 (updated in 2011 and again in 2013), which is not too dissimilar from the ND-GAIN: ranking nations (but not actually producing a risk coefficient) according to their exposure (how likely any country is to be adversely effected by climate change) and their sensitivity to climate change (how economically significant any such effects are), as well as on two indicators of resilience, “adaptive potential” and “adaptive capacity.”

One interesting aspect of the HSBC research is that, like the ND-GAIN Country Index, while it provides what appears to be neutral information on the state of the world, it simultaneously produces a list of appropriate managerial targets through which governments and multilateral development institutions might influence the investment ratings of a country. Thus, the numbers and their means of generation become active, orienting managerial attention, rather than simply being passive reflections of an existing state of affairs. Education, for example, becomes a way of reducing one’s exposure to adverse climate effects. In a particularly ironic twist, increasing a country’s GDP per capita (a very good predictor of a country’s contribution to climate change) improves its risk ranking, so the more a nation exacerbates the overall problem, the less vulnerable it is. The debt-to-GDP ratio is also included, so the very political process of minimizing debt—which frequently means imposition of austerity and in some cases pressure to increase production of natural resources, including fossil fuels—here translates numerically into a reduction in climate change vulnerability. In short, there should be no false hopes that these kinds of rankings will serve as a device through which financial markets discipline states or firms into taking action to reduce emissions. The rankings actually reflect a nation’s ability to insulate commodity values from climate change and thus provide only a very rough estimate of predicted negative value.

While the exercise undertaken by HSBC produces only a ranking and not a specific set of national risk coefficients, it is an early effort to make the uncertain effects of climate change visible to banks and investors and integral to investment algorithms. Private firms such as Risk Management Solutions (RMS) and Verisk Maplecroft (a subsidiary of Verisk Analytics) offer tailor-made quantifications of risk to supply chains, operations, and investments around the world, promising to make the complex field of environmental, social, and political risks—including those arising from climate change—transparent to investors. Four Twenty Seven, which integrates the data from ND-GAIN into its analytics, similarly helps its clients to “reduce risks, identify new opportunities, and build resilience in the face of climate change.”³ In addition to gathering market intelligence, the firm offers made-to-order climate risk scores for specific companies based on the precise location of their corporate facilities and on the sectors or industries in which a particular company is active, thereby enabling investors to factor climate change into their portfolio management and investment decisions. In order to enhance its own risk assessment toolkit, Moody’s purchased a majority stake in Four Twenty Seven in July 2019.

Apart from mapping the physical risks of climate change for the benefit of investors, effort is also going into calculating political risk. For example, the global asset management company Schroders provides fund managers with analyses of “Carbon Value at Risk” (Carbon VaR), a process that assumes governments will eventually impose (in some form) a $100/ton price of carbon and then provides an estimate of the cost implications of this for any particular firm. This representation translates climate change directly into expected future profit and therefore shareholder value. Climate change is indeed made visible as a material risk, but the implications for action by the firm remain open. One such action would be to minimize exposure in the event of the “worst-case” scenario (from the firms’ perspective), in which governments actually act to keep us below a 2°C average global warming. The other, of which we see much greater evidence, is to realistically assess what governments are doing, rather than saying, about establishing a meaningful carbon price and intervening aggressively through lobbying and campaign funding to minimize the likelihood of any political action that would avoid catastrophic global warming but also trigger potentially large losses in value in the short and medium term.

We are thus witnessing the rise of a small, privatized, scientific industry whose purpose is to produce and sell a visible climate risk landscape, which then becomes the salient aspect of climate change for investors, banks, and firms. What is produced and made visible through this work is a geography of negative and positive value, altered according to changing climate patterns and distributions of disruptive events. Each qualitative form of havoc is made commensurable with every other, and the damage done to lives both human and otherwise, to specific communities, to landscapes and ecosystems, becomes identical (in the gaze of capital and, in turn, policy makers, civil-society organizations, NGOs, and the rest of us) with risks to value—always mediated through price and already-existing value. This means, of course, that flood damage to a wealthy Florida neighbourhood is “worse”—ceteris paribus—than that done to a Dhaka slum. The possibility that we may lose 50 percent of animal species in “biodiversity hotspots” (Watts 2018) is in itself insignificant post-digestion. What matters is how this might transform the landscape of risk and the existing or potential future value of an asset under current projections of warming. Climate change is seen not as an existential threat for particular people, plants, animals, towns, nations, or ways of life but, first and foremost, as an optimization problem. However, as we will see, the numbers generated only ever have an uncertain and probabilistic relationship to the realities they purport to represent. We should be clear that these are representations, whose job is to be credible enough to create value for their producers. They are not climate change. They are a view of climate change as seen through a lens that filters everything but value.

Insurance and Reinsurance

The first group to have recognized climate change as a form of negative value was probably the insurance industry—and its insurers, the reinsurance industry. Insurance has been positioned as an important tool for climate adaptation, particularly for low-income nations or governments without the financial wherewithal to cope with the aftermath of disasters, enabling them to transfer risk and access funds in greater volumes and more quickly than through other forms of lending or relief (Grove 2010, 541). The insurance industry has considerable expertise in converting various forms of tragedy, disaster, and catastrophe into streams of numbers, and their profitability rests on their ability to do so with a reasonable degree of accuracy. This goes back perhaps as far as the fourteenth century, and certainly as far as the seventeenth, as merchants and lenders were trying to quantify and insure against the risks of getting cargo across the ocean (Martin 1876, 6).

Thanks to this long expertise, the insurance industry has been at the forefront of the attempt to quantify the likely impacts of climate change, particularly as they relate to weather-related property damage and casualties. Reinsurers, who are ultimately holding the bag in the event that the insurers find themselves overexposed, have been attempting to grapple with climate change (as far as it impacts their bottom line) for longer than most other industries and for longer than many governments (Johnson 2011, 2). Since 1980, average insured losses worldwide from extreme weather have doubled each decade, hitting US$50 billion by 2013 (Reguly 2013). Much of this is due to a significant increase in the value and quantity of exposed settlements and infrastructure (McAneney 2014), but a changing climate and increased incidence of natural disasters are also playing an important part (Thomas, Albert, and Hepburn 2014). With regard to Hurricane Harvey, for example—an event that JPMorgan estimated would result in $10 billion to $20 billion in insured losses (Keoun 2017)—climate change researchers suggested that the probability of such an intensity of rainfall in the Houston area was increased by a factor of three on account of global warming (van Oldenborgh et al. 2017, 10).

So one would imagine that the (re)insurance industry is in a particularly sensitive place with regard to the “material risks” of climate change. The industry’s public pronouncements would support this view. In an early attempt to draw the attention of insurance executives to the threat to profitability, for example, a 2006 report from specialty insurer Lloyd’s declared that “so far, the industry has not taken changing catastrophe trends seriously enough. Climate change is likely to bring us all an even more uncertain future. If we do not take action now to understand the risks and their impact, the changing climate could kill us” (Lloyd’s 360 Risk Project 2006, 3).

Despite this dire early warning, the extent to which (re)insurers are integrating climate change into their corporate practices is unclear. In a study of the reinsurance market, Leigh Johnson (2011, 53) concluded that, “by and large, firms have not developed formal or informal methods for integrating climate change impacts into their underwriting and pricing decisions.” She attributes this in part to the uncertainties that plague the process of digestion. The implications of climate change, at least in 2010, when Johnson was writing, were understood to be uncertain as well as small relative to other sources of variation and uncertainty. Catastrophe models are made up of modules that aim to predict not only the likelihood of a hazard but also how it will interact with the built environment, and with the financial value of elements within that environment, so uncertainties are stacked. As a result, the public commitment to integrate climate change into pricing and underwriting was not reflected in actual practice (Johnson 2011). Since then, the quantifying practice of “probabilistic event attribution” has advanced considerably, to the point that litigators are interested in their use in assigning specific blame for specific, climate-related harms (Dzieza 2018; for a more skeptical view, see Lusk 2017). Climate models have improved in their degree of resolution. Nonetheless, (re)insurers and the catastrophe-modelling firms upon which many of them rely still find themselves facing considerable challenges because probabilities assigned to weather events—to their severity, their combination, and the likely property damage associated with them—are no longer stable, and different climate models vary considerably in their forecasts. They realize that the models based on historic data underestimate the costs they will likely have to pay out now or in the future, so they are trying to turn from historical to predictive modelling, relying on processes of “expert elicitation.” The latter involves asking a handful of climate scientists for their best guesses as to the future of, for example, hurricane frequency and severity over the next five years and using those as a basis for modelling. That may be a step forward but leaves (re)insurers stuck with another source of uncertainty. The Geneva Association (a think tank for insurers and reinsurers) puts it this way:

The lack of historical and observational data and the existence of competing theories formalized in competing forecasting models, leads to a multitude of different answers for the return periods of certain extreme events in today’s transient environment. Unfortunately, it is difficult to assign confidence or the probability of one answer being better than the other, a situation which can be described as ambiguity. (Geneva Association 2013, 17)

It should also be noted that the prices of insurance products, as a reflection of the “costs” of climate change, involve only the costs of damage to insured property and life. For the developed world, it is estimated that about 40 percent of the property value at risk is actually insured. For a region like South Asia, it is more like 8 percent. The distribution of insurance coverage worldwide is profoundly unequal. In 2017, the United States accounted for 50 percent of total losses, which was unusually large, but even on a long-term average basis, it makes up 32 percent of the total. While the media were riveted to the flooding of Houston that year, 2,700 people died in flooding in a heavy South Asian monsoon, the economic losses from which were estimated at $3.5 billion. With only a tiny fraction of that insured, the disaster will hardly appear on the ledgers of (re)insurers. (Munich RE 2018). This non-alignment of insured costs and actual harm is further illustrated by the fact that only one of the top forty most deadly catastrophes also ranks among the forty most costly (Johnson 2011, 20).

The example of insurance suggests that the business of digestion is very much incomplete and plagued by huge uncertainty. While the (re)insurers are publicly proclaiming the need for and their commitment to improved risk modelling, and while they have remained profitable so far despite the ballooning costs, the best valuations of even the most straightforward effects of climate change remain ambiguous. Nonetheless, (re)insurers have a clear material interest in calculating the distributions of “negative value” threatened by climate change and so are active participants in the process of digestion. Riddled with problems though it is, the representation of climate change’s consequences as value at risk is becoming a widely used frame for the politics of climate change.

Cat Bonds

(Re)insurers are not the only ones trying to turn a profit off of the quantification of climate change. Catastrophes and extreme weather have burst the boundaries of insurance markets and made the leap into global bond markets. The global pool of capital operative in insurance and reinsurance is about $350 billion to $400 billion. That sounds like a lot, but one Hurricane Katrina costs about $60 billion, so a few of those in a year can seriously strain, or even break, the market’s capacity to adequately spread risk. Hence the more recent turn to getting financial and bond markets to shoulder some of this risk by designing new financial instruments based on insurance, known as insurance-linked securities. In terms of climate change risk, the key instrument is the catastrophe bond, or “cat bond” for short. Cat bond issuance is about $28 billion to date, though the rate of growth has not been steady. The market originated in the 1990s, grew very quickly in the early 2000s until 2007, collapsed in 2008–9, grew steadily if not spectacularly until 2014, and then dropped moderately until 2017.

Cat bonds work as follows. If you have, say, $200 million lying around looking for a decent return, you can opt to make a bet that a particular event—in this case, a catastrophe of some kind—is not going to happen in a particular place over a particular period of time. If indeed it does not happen, you get a pretty good return—8 or 9 percent. If it does happen, you lose a portion or the entire amount invested, which goes to whoever issued the bond (usually an insurer) in order to help them cover their losses. The triggers vary among bonds: it could be an actual weather event, or an indemnity amount, or a mortality index, or an industry loss. As an example, you might bet that a named storm on the eastern seaboard of the United States is not going to surpass a certain storm surge high-water mark. If during the relevant window of time a storm surge does go over the threshold, the bond issuer uses your money to pay off claims. If not, you are sitting on a healthy return, based on the premiums paid by the insured (plus an additional return on the principle, which is usually invested during the relevant period of the bet). Of course, constructing these offerings requires a substantial amount of digestive labour—transforming a possible future weather disaster into a price-bearing commodity that can be bought and sold. Companies such as RMS and AIR (Applied Insurance Research, another Verisk company) provide the risk analyses that form the bases of cat bond offerings. Through this work, the catastrophic consequences of climate change appear to be financially tamed. Havoc gives way to the orderly world of probability and price.

The risk analyses that form the substance of the bonds are in some ways very sophisticated, and each bond circular provides an incredible amount of detail to potential investors about how measuring gets done (for example, what kinds of gauges are used to measure the height of the storm surge, and where they are located, and how they work) and about the simulation modelling that predicts the indemnity. However, as sophisticated and as high-resolution as the models are, the translation of disaster into value still occurs through the classic definition of risk as the probability of a hazard multiplied by the consequences—in dollar terms, of course. The first part of that equation, the actual probability of the trigger events themselves, remains rooted in historical data—data that, as we have seen, are unlikely to have much actual predictive value as climate change sets in. This may help to explain the frequent disclaimers in bond circulars about the irreducible uncertainties involved.

Is digestion a technique of revelation or obstruction? Here I want to avoid decrying the “violence of abstraction” or presenting a blanket critique of reductionism through modelling, because abstraction and reductionism are key aspects of how humans think. We categorize the world in order to make sense of it, and we must abstract from specificity in order to discern patterns. These general abstractions then form the basis for explorations of their different, historically and spatially specific, forms, as well as the fuzziness of their boundaries. Rather than critiquing abstraction and representation, we need to pay attention to who creates our abstractions and for what purpose, whether they misrepresent the world, and whether they are used to remake something in the image of the abstraction. We need to ask, do our models of the world become models for the world? Moore (2017, 182–83), looking at cartography’s role in empire, has (after Donna Haraway) called this capitalism’s “God trick,” namely, “to re-present the world in ‘objective’ form. This trick accomplished two big things: it concealed capital’s desire for domination under the guise of objectivity, and in the same breath, it enabled the practical tasks of world domination.” Part of capital’s response to climate change has been to engage in a new round of cartography and representation. What do the new maps reveal, and what do they hide?

Leigh Johnson (2011, 98) asks the crucial question of “whether model output can be rendered in terms other than the expected loss of exchange value.” If it cannot, it is a technique of obstruction, since it allows the politics of climate change to occur only in the register of the market, at the level of the firm or the individual responding to changes in relative values and prices. Given the uses to which modelling has been put—notably, not attempting to minimize the aggregate production of “negative value” but positioning firms strategically within its distribution over time and space—its outputs are forced to speak in the language of exchange value. Importantly, this realization should move us away from targeting the modellers, the scientists, and the “experts” who generate the numbers as the problematic and powerful actors and force us to recognize that they produce what a market-based system demands. They are (highly paid) workers producing a product whose generation is driven by the systemic requirements of capitalism. (Re)insurers and investors, who are increasingly positioned as the key actors in any kind of transition to low-carbon economies, can only speak the language of price. In this way, taking the metaphor of digestion one step further, we might speak of “autocoprophagia.”⁴ This might be more apt because not only does capital dedicate energy through the social allocation of labour to producing what I am here comparing to feces, but it also goes one better and consumes it, closing the circle. Capital must produce streams of numbers, turning qualities into quantities to represent risk, hazard, and opportunity, and then treat those same uncertain quantities as real and credible enough to consume—to plug into calculations and algorithms that in turn condition the pricing of real assets and commodities and that therefore condition landscapes, socio-natural relations, and the fortunes of human and non-human lives.

The work that goes into turning qualities into quantities not only creates a passive representation. In some cases (as with insurance products or carbon credits) it actively produces new commodities, instead of just enabling their production. The numbers so created form, for example, the actual substance of the financial commodities generated as capital’s primary market-based responses to climate change. Johnson (2013, 35) points in this direction when she claims that “a bond does not become a tradable commodity or income stream unless and until it has been modeled and assigned an expected loss.” In the case of capital’s digestion of climate change, actual, specific, and differentiated forms of danger (in this case, the capacity of weather to destroy value) must be transformed by labour into exchangeable packets of risk—a transformation that Brett Christophers (2016) argues is constitutive of the commodity. That is, it is the translation of physical or political risk into exchangeable, abstract risk that allows the commodity to bear value.

The generation of these abstractions is part of a historical progression rather than a complete novelty or a sudden break. Cartography, accounting, botany, and zoology, among other forms of intellectual and abstracting labour, made aspects of the world—land, labour, energy, species—more easily available, or available at all, for appropriation and for capitalization (Moore 2015a). According to Christian Parenti (2015), this is what makes analysis of the state so important to understanding the metabolic relations of capitalism. States are, in his view, “crucial membranes” in this relationship because they are responsible for delivering to capital the use values of extra-human nature. While states do indeed serve this function, it is increasingly also undertaken by private consulting firms, as discussed above.

As climate change is digested, it is depicted as a map of values (both negative and surplus) unevenly scattered over time and place, and each capitalist’s primary interest is in placing him or herself strategically within that matrix. Indeed, the very characteristic of the catastrophe risk mentioned above, that “no mass of information will help us pinpoint the precise when, where, and how of the coming havoc” (Cooper 2008, 83), is precisely the basis of an insurance market in which actors bet on and hedge against the uncertainty of when, where, and upon whom disasters will fall. Capital, in the face of the increasing certainty of large-scale damages from climate change, chooses not to maximally preclude the source of harm, or do what can be done to spare human and non-human life from catastrophes we know will result (by leaving fossil fuels in the ground, for example), but to place itself advantageously within the “havoc” to come, minimizing costs relative to competitors and finding new spaces for valorization.

How does this change the policy environment around climate change? What happens to our understanding of the problem? At issue is not the act of quantification itself. It is the open question of whether capital’s way of seeing climate change becomes the way that we all see climate change—whether the models’ output, expressed as expected exchange value, dominates our view of both the problem and our responses to it. While the claim made in favour of this is that it makes climate change “visible,” we need to bear in mind that climate change is already visible to billions of people. People see and experience it through water scarcity, rising sea levels, storm surges, wildfires, and typhoons. I’m sure that non-human life experiences it as well, though I cannot say how. It is only capital that cannot see these things until they are translated into value terms. The rest of us already get it. The much more basic mathematics of the carbon budget inform us that we must begin a rapid process of transition to zero carbon economies, which involves leaving fossil fuels in the ground. Failure to do so will mean that the suffering already being experienced bodily in many different ways will be hugely amplified. However, through digestion—a supposed act of revelation—the complex entanglements of social and “natural” relations that actually make up the world we live in are, in their qualitative dimension, lost. The actual consequences of climate change for human and non-human life—hunger, thirst, sickness, extinction, homelessness, death—are obscured, replaced with streams of expected value expressed ultimately as price. Human suffering, species loss, the erasure of particular kinds of landscapes in favour of others, all of this vanishes under the streams of numbers that are the only actionable information markets can handle, since they are the among the abstractions upon which exchange rests. Representations of the world and the construction of problems (Is the problem the floods, or threats to supply chains?) always suggest a specific politics and therefore limit or preclude others. It is only if we move the politics of climate change and transition out of the exclusive register of the market that it might be guided by principles like justice, democracy, or survival understood as non-commensurable with other “values.”