CARBON KILLS THE KING OF RETAIL
Wal-Mart sacrificed in climate change battle
An announcement today confirmed that Wal-Mart is filing for bankruptcy. Wal-Mart’s legendary promise of “Always Low Prices. Always.” proved unable to cope with the financial burden of direct carbon taxation. This could be a sorry end to the great retail giant’s history.
After the hottest year on record, all the major economies signed the Global Carbon Contract (GCC) at Davos in 2014. The GCC established a global model for carbon pricing, and taxed businesses on their carbon impact. Wal-Mart faced an initial annual tax bill of US$ 5 billion, rising to more than US$ 10 billion this year.
The tax devastated Wal-Mart’s low-cost supply chain, heavily dependent on using high carbon producers. Wal-Mart has been slow to restructure as funds flowed from shareholders to tax authorities. Lately, Wal-Mart’s customers have abandoned it in droves as prices increased.
Analysts had expected the US and European governments to intervene to save the company, as they did when the banks crumbled in 2009.
EU President Juan Antonsa remarked: “Wal-Mart has been a big contributor to reducing inflation world-wide, but there are bigger issues here. What legacy do we want to leave our grandchildren? As Wal-Mart might say: ‘No price is too small to pay’.”
This will be no comfort to the more than 1.5 million Wal-Mart employees facing an uncertain future. The GCC Carbon Displacement fund, which offers support to those who lose their jobs due to carbon restructuring, will provide some assistance. Those left without work will be hoping that the more carbon-efficient retailers will provide new job opportunities.
What other household names might go to the wall in the battle over climate change? Will a new round of bail-outs commence?
Warning: Hazardous thinking at work
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