A review of Overshoot: How the World Surrendered to Climate Breakdown

In 2023 delegates from around the world gathered for a 28th session of the Conference Of the Parties (COP), this time held in the United Arab Emirates. The official director of the mega-meeting, nominally devoted to mitigating the climate crisis caused by fossil fuel emissions, was none other than Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company (ADNOC).

At the time, ADNOC was “in the midst of a thrust of expansion, planning to pour more than 1 billion dollars into oil and gas projects per month until 2030.” (Overshoot, page 253)

Overshoot, by Andreas Malm and Wim Carton, published by Verso, October 2024.

Sultan Al Jaber’s appointment was praised by climate envoy John Kerry of the United States, which was also committing a historic expansion of fossil fuel extraction.

The significance of COP being presided over by a CEO working hard to increase carbon emissions was not lost on Andreas Malm and Wim Carton. In that moment, they write,

“[A]ctive capital protection had been insinuated into the highest echelons of climate governance, the irreal (sic) turn coming full circle, the theatre now a tragedy and farce wrapped into one, overshoot ideology the official decor.” (Overshoot, p 254; emphasis mine)

What do Malm and Carton mean by “capital protection” and “overshoot”? “Capital protection” is the opposite of “asset stranding”, which would occur if trillions of dollars worth of fossil fuel reserves were “left in the ground,” unburned, unexploited. Yet as we shall see, the potential threat to capital goes far beyond even the trillions of dollars of foregone profits if the fossil fuel industry were rapidly wound down.

In Malm and Carton’s usage, “overshoot” has a different meaning than in some ecological theory. In this book “overshoot” refers specifically to carbon emissions rising through levels that will cause 1.5°C, 2°C, or other specified threshold for global warming. To apologists for overshoot, it is fine to blow through these warming targets temporarily, as long as our descendants later in the century draw down much of the carbon through yet-to-be commercialized technologies such as Bio-Energy with Carbon Capture and Storage (BECCS).

Overshoot, Malm and Carton say, is a dangerous gamble that will certainly kill many people in the coming decades, and collapse civilization and much of the biosphere in the longer term if our descendants are not able adequately clean up the mess we are bequeathing them. Yet overshoot is firmly integrated into the Integrated Assessment Models widely used to model the course of climate change, precisely because it offers capital protection against asset stranding.

Scientific models, “drenched in ideology”

If the global climate were merely a complex physical system it would be easier to model. But of course it is also a biological, ecological, social and economic system. Once it was understood that the climate was strongly influenced by human activity, early researchers understood the need for models that incorporated human choices into climate projections.

“But how could an economy of distinctly human making be captured in the same model as something like glaciers?,” Malm and Carton ask. “In the Integrated Assessment Models (IAMs), the trick was to render the economy lawlike on the assumptions of neoclassical theory ….” (p 56)

These assumptions include the idea that humans are rational, making their choices to maximize utility, in free markets that collectively operate with perfect information. While most people other than orthodox economists can recognize these assumptions as crude caricatures of human behaviour, this set of assumptions is hegemonic within affluent policy-making circles. And so it was the neoclassical economy whose supposed workings were integrated into the IAMs. 

While “every human artifact has a dimension of ideology,” Malm and Carton write, 

“IAMs were positively drenched in non-innocent ideological positions, of which we can quickly list a few: rationalism (human agents behave rationally), economism (mitigation is a matter of cost), presentism (current generations should be spared the onus), conservatism (incumbent capital must be saved from losses), gradualism (any changes will have to be incremental), and optimism (we live in the best of all possible economies). Together, they made ambitious climate goals – the ones later identified as in line with 1.5°C or 2°C – seem all but unimaginable.” (p 60; emphasis mine)

In literally hundreds of IAMs, they write, there was a conspicuous absence of scenarios involving degrowth, the Green New Deal, the nationalisation of oil companies, half-earth socialism, or any other proposal to achieve climate mitigation through radical changes to “business as usual.”

In the place of any such challenges to the current economic order was another formidable acronym: BECCS, “Bio-Energy with Carbon Capture and Storage.” No costly shakeups to the current economy were needed, because in the IAMs, the not-yet-commercialized BECCS was projected to become so widely implemented in the second half of the century that it would draw down all the excess carbon we are currently rushing to emit.

As the 21st century progressed and as warming thresholds such as 1.5°C or even 2°C grew dangerously close, overshoot, excused by the imagined future roll-out of BECCS, became a more attractive and dangerous concept. Due to the magic of IAMs incorporating overshoot, countries like Canada, the US, and other petrostates could declare climate emergencies, pledge their support to a 1.5°C ceiling – and simultaneously step up their fossil extraction efforts. 

“Construction Work on Trans Mountain Pipeline outside Valemount, BC, Canada, Sept 16, 2020.” (Photo by Adam Jones, licensed via Creative Commons CC By 2.0, accessed via flickr.) On June 17, 2019, the Canadian Parliament approved a motion declaring the country to be in a climate emergency. On June 18, 2019, the Government of Canada announced its approval of the Trans-Mountain Pipeline Expansion, for the purpose of bringing more tar sands crude to the BC coast for export.

At COP15 in Copenhagen in 2009, and most famously at the Paris Accord in 2015, countries could piously pledge their allegiance to stringent warming limits, while ensuring no binding commitments remained in the texts to limit the fossil fuel industry. Overshoot was the enabling concept: “Through this sleight of hand, any given target could be both missed and met and any missing be rationalised as part of the journey to meeting it ….” (p 87)

“The common capital of the class”

There is a good deal of Marxist rhetoric in Overshoot, and Malm and Carton are able guides to this often tangled body of political-economic theory. On some subjects they employ these ideas to clarifying effect.

Given the overwhelming consensus of climatologists, plus the evidence in plain sight all around us, that the climate emergency is rapidly growing more severe, why is there still such widespread resistance to radical economic change?

The opposition to radical change comes not only from fossil fuel company owners and shareholders. Rather, the fierce determination to carry on with business as usual comes from many sectors of industry, the financial sector, nearly all policy-makers, and most of the media elite.

As Malm and Carton explain, if firm policies were put in place to “leave fossil fuels in the ground”, stranding the assets of fossil fuel companies, there would be “layer upon layer” of value destruction. The first layer would be the value of the no-longer usable fossil reserves. The next layer would be the vast network of wells, pipelines, refineries, even gas stations which distribute fossil fuel. A third would be the machinery now in place to burn fossil fuels in almost every other sector of industrial production. The economic valuations of these layers would crash the moment “leaving fossil fuels in ground” became a binding policy.

Finally, the above layers of infrastructure require financing. “Increased fixed capital formation,” Malm and Carton write, “necessitates increased integration into equity as well as credit markets – or, to use a pregnant Marxian phrase, into ‘the common capital of the class.’” (p 133)

The upshot is that “any limitations on fossil fuel infrastructure would endanger the common capital of the class by which it has been financed.” (p 133-134) And “the class by which it has been financed,” of course, is the ruling elite, the small percentage of people who own most of corporate equity, and whose lobbyists enjoy regular access to lawmakers and regulators. 

The elite class which owns, finances and profits from fossil production also happens to be responsible for a wildly disproportionate amount of fossil fuel consumption. Overshoot cites widely publicized statistics that show that the richest ten per cent of humanity is responsible for half of the emissions, while the poorest fifty percent of humanity emits only about a tenth of the emissions. They add, 

“It was not the masses of the global South that, suicidally, tipped the world into 1.5°C. In fact, not even the working classes of the North were party to the process: between 1990 and 2019, per capita emissions of the poorest half of the populations of the US and Europe dropped by nearly one third, due to ‘compressed wages and consumption.’ The overshoot conjuncture was the creation of the rich, with which they capped their victory in the class struggle.” (p 225-226)

Stock, flow and the labour theory of value

Malm and Carton go on to explain the economic difference between fossil fuel energy and solar-and-wind energy, through the simple lens of Marx’ labour theory of value. In my opinion this is the least successful section of Overshoot.

First, the authors describe fossil fuel reserves as “stocks” and the sunshine and wind as “flows”. That’s a valid distinction, of significance in explaining some of the fundamental differences in these energy sources.

But why has fossil fuel extraction recently been significantly more profitable than renewable energy harvesting?

The key fact, Malm and Carton argue, is that “the flow [solar and wind energy] appears without labour. … [T]he fuel is ripe for picking prior to and in proud disregard of any process of production. ‘Value is labour,’ Marx spells out …. It follows that the flow cannot have value.”

They emphasize the point with another quote from Marx: “‘Where there is no value, there is eo ipso nothing to be expressed in money.’”

“And where there is nothing to be expressed in money,” they conclude, “there can be no profit.” (p 208-209) That is why the renewable energy business will never supply the profits that have been earned in fossil extraction.

This simple explanation ignores the fact that oil companies aren’t always profitable; for a period of years in the last decade, the US oil industry had negative returns on equity.¹ Clearly, one factor in the profitability of extraction is the cost of extraction, while another is the price customers are both willing and able to pay. When the former is as high as or higher than the latter, there are no profits even for exploitation of stocks.

As for business opportunities derived from the flow, Malm and Carton concede that profits might be earned through the manufacture and installation of solar panels and wind turbines, or the provision of batteries and transmission lines. But in their view these profits will never come close to fossil fuel profits, and furthermore, any potential profits will drop rapidly as renewable sources come to dominate the electric grid. Why? Again, their explanation rests on Marx’s labour theory of value:

“The more developed the productive forces of the flow, the more proficient their capture of a kind of energy in which no labour can be objectified, the closer the price and the value and the profit all come to zero.” (page 211)

Does this sound fantastically utopian to you? Imagine the whole enterprise – mining, refining, smelting, transporting, manufacturing and installation of PV panels and wind turbines, extensions of grids, and integration of adequate amounts of both short- and long-term storage – becoming so “proficient [in] their capture of energy” that the costs are insignificant compared to the nearly limitless flow of clean electricity. Imagine that all these costs become so trivial that the price of the resulting electricity approaches zero.

As a corrective to this vision of ‘renewable electricity too cheap to meter,’ I recommend Vince Beiser’s Power Metal, reviewed here last week.

Malm and Carton, however, are convinced that renewably generated electricity can only get cheaper, and furthermore can easily substitute for almost all the current uses of fossil fuels, without requiring reductions in other types of consumption, and all within a few short years. In defense of this idea they approvingly cite the work of Mark Jacobson; rather than critique that work here, I’ll simply refer interested readers to my review of Jacobson’s 2023 publication No Miracles Needed.

Energy transition and stranded assets

Energy transition is not yet a reality. Malm and Carton note that although renewable energy supply has grown rapidly over the past 20 years, fossil energy use has not dropped. What we have so far is an energy addition, not an energy transition.

Not coincidentally, asset stranding likewise remains “a hypothetical event, not yet even attempted.” (p 192)

The spectre of fossil fuel reserves and infrastructure becoming stranded assets has been discussed in the pages of financial media, ever since climate science made it obvious that climate mitigation strategies would indeed require leaving most known fossil reserves in the ground, i.e., stranding these assets. (One of the pundits sounding a warning was Mark Carney, formerly a central banker and now touted as a contender to replace Justin Trudeau as leader of the Liberal Party of Canada; he makes an appearance in Overshoot.)

Yet there is no evidence the capitalist class collectively is losing sleep over stranded assets, any more than over the plight of poor farmers being driven from their lands by severe floods or droughts.

As new fossil fuel projects get more expensive, the financial establishment has stepped up its investment in such projects. In the years immediately following the Paris Agreement – whose 1.5°C warming target would have required stranding more than 80 per cent of fossil fuel reserves – a frenzy of investment added to both the reserves and the fixed capital devoted to extracting those reserves:

“Between 2016 and 2021, the world’s sixty largest banks poured nearly 5 trillion dollars into fossil fuel projects, the sums bigger at the end of this half-decade than at its beginning.” (p 20) 

The implications are twofold: first, big oil and big finance remain unconcerned that any major governments will enact strong and effective climate mitigation policies – policies that would put an immediate cap on fossil fuel exploitation plus a binding schedule for rapid reductions in fossil fuel use over the coming years. They are unconcerned about such policy possibilities because they have ensured there are no binding commitments to climate mitigation protocols.

Second, there are far more assets which could potentially be stranded today than there were even in 2015. We can expect, then, that fossil fuel interests will fight even harder against strong climate mitigation policies in the next ten years than they did in the last ten years. And since, as we have seen, the layers of stranded assets would go far beyond the fossil corporations themselves into ‘the common capital of the class’, the resistance to asset stranding will also be widespread.

Malm and Carton sum it up this way: “We have no reliable friends in the capitalist classes. … any path to survival runs through their defeat.” (p 236)

The governments of the rich countries, while pledging their support for stringent global warming limits, have through their deeds sent us along the path to imminent overshoot. But suppose a major coal- or oil-producing jurisdiction passed a law enacting steep cutbacks in extraction, thereby stranding substantial fossil capital assets.

“Any measure significant enough to suggest that the fears harboured for so long are about to come true could pop the bubble,” Malm and Carton write. “[T]he stampede would be frenzied and unstoppable, due to the extent of the financial connections ….” (p 242)

Such a “total breakdown of capital” would come with drastic social risks, to be sure – but the choice is between a breakdown of capital or a breakdown of climate (which would, of course, also cause a breakdown of capital). Could such a total breakdown of capital still be initiated before it’s too late to avoid climate breakdown? In a book filled with thoughtful analysis and probing questions, the authors close by proposing this focus for further work:

“Neither the Green New Deal nor degrowth or any other programme in circulation has a plan for how to strand the assets that must be stranded. … [This] is the point where strategic thinking and practise should be urgently concentrated in the years ahead.” (p 244)

¹ See “2018 was likely the most profitable year for U.S. oil producers since 2013,” US Energy Information Administration, May 10, 2019. The article shows that publicly traded oil producers had greater losses in the period 2015-2017 than they had gains in 2013, 2014, and 2018.

Image at top of page: “The end of the Closing Plenary at the UN Climate Change Conference COP28 at Expo City Dubai on December 13, 2023, in Dubai, United Arab Emirates,” photo by COP28/Mahmoud Khaled, licensed for non-commercial use via Creative Commons CC BY-NC-SA 2.0, accessed on flickr.