Market and economic based redistributive policies lock back into logics of capitalistic expansion, accumulation, and dispossession

The Fiscal Nature Municipal and national fiscal policies undoubtedly have an impact on disaster and vice versa. Governments seek to grow their economies through taxation and spending. However, a natural disaster has the potential to undermine that expansion. In crass financial terms, disaster is a liability. As such, when catastrophe hits, governments must cope with the resulting costs without increasing public debt. In our era of global neoliberalism, financial markets are a popular means of dealing with risk. For instance, the “how-to guide” of the International Monetary Fund (IMF) on managing the cost of natural disaster notes the use of insurance, reinsurance, debt instruments (securitization), catastrophe bonds, and other capital market options to transfer risk. The goal, according to the IMF, is to create fiscal buffers against disaster-related financial threats.22 Beyond insurance covering potential and actual losses, we see that financialization is central to understanding contemporary disaster capitalism. Finance, simply put, influences everything. Importantly, Sarah Quinn reminds us that this means, “Finance is always social.”23 Financial systems, according to Quinn, not only distribute profit and risk throughout society but are also based on social understandings and relationships that have deepened throughout the last fifty years. Lin and Neely have also argued that “finance has become an essential fabric of contemporary American life.”24 We now see a reliance on market-based solutions for everything. Disaster risk is no different. Importantly, financialization is not just an American phenomenon. Globalization facilitates this process. As John Bellamy Foster argues, financialization, or more specifically, the financialization of accumulation, is at the center of the global economic system. Like other forms of capitalism, this system is predicated on the unequal relationships within countries, such as those between newly industrialized countries in the Global South and wealthy countries that control capital markets.25 Similarly, this imbalance can be extended to relationships between cities. What does financialization mean for the fiscal nature of cities and disaster risk? According to Manuel Aalbers, “Urban policy has become a financial instrument.”26 Amid debates over climate change, the mayors of New York, Paris, and Rio de Janeiro penned a 2016 editorial arguing that environmental action begins with cities. Noting that cities “account for 85% of global GDP, and they are engines of technological process and policy innovation,” they claim that cities are better positioned to solve environmental problems than national governments. However, in their editorial, the mayors wrote that they have faith in the benefits of expansion and urbanization. In fact, they argue that urban innovation can “increase economic activity.”27 The mayors, in other words, accept an expansion-oriented understanding of cities even as they support initiatives such as renewable energy. Similarly, following the 2015 United Nations Climate Change Conference in Paris (COP15), hundreds of investors from around the world mobilized around the call for new green technology and energy.28 This was spurred by Article 2 of the Climate Agreement, which calls for “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development.”29 An immediate outcome of COP15 was the convening of the 2018 Ceres Investor Summit on Climate Risk at the United Nations Headquarters in New York. Over 450 financial companies and capital market leaders met to discuss disaster-resilience projects and ways to fund green and sustainable projects that reduce carbon emissions.30 Meetings such as these reflect a trend toward so-called corporate environmental, social, and governance (ESG) investment practices, which are increasingly influencing environmental policy and action. While such developments suggest a growing concern for environmental problems, they are deeply rooted in the expansion of profit-making activities that would likely encourage capitalistic urban expansion. ESG investors, while slowly moving money toward renewable energy sources, have not pushed to radically decarbonize our economy. For instance, investment in smart cities still fuels the urban growth machine, which consists of a coalition of policymakers, corporations, and citizens who are true believers in endless expansion. This is not just about getting bigger; it is also about having a wider reach. Expansion-oriented growth means increased local and global consumption. Allan Schnaiberg calls this insatiable hunger the treadmill of production. The treadmill is an everaccelerating machine that thrives on the consumption of resources.31 This theoretical approach is addressed in more detail in chapter 3. However, it is essential to note here that our cities run faster than they ever have—by extracting and consuming resources, producing waste, and, as a corollary, creating more risk. As such, we need to question whether our system of risky cities should or can continue to run faster and faster.