Resource rich democracies have typically been burdened by the competing objectives of advancing economic growth through resource extractivism while contemporaneously mitigating carbon emissions. The fossil fuel industry, perceived as some of the biggest beneficiaries of rent-seeking activities in resource rich democracies, has usually been viewed unfavourably as a major opponent to progressive climate change legislation. However, the role of key intermediary actors in the financial networks of the fossil fuel industry are often overlooked. This paper investigates the key stakeholders of rent-seeking activities arising from resource extraction and examines their relationship to the fossil fuel industry.
The analysis takes a comparative approach by considering the financial networks of the fossil fuel industry in Australia versus Norway. These are two resource rich democracies with structurally similar conditions but with varying institutional environments in which regulations are made, with differing environmental outcomes: Australia has a liberal-market orientation while Norway is a coordinated-market economy, and the latter’s carbon emissions per capita almost half of that of the former despite both being heavily economically dependent on fossil fuels. The distinct institutional configurations of the two countries are shown to influence the financial ties and rent-seeking behaviour of political actors in both systems. Using social network analysis, this study then draws on political donation datasets from the Australian Electoral Commission and Statistics Norway to identify the key recipients of fossil fuel transactions and its relation to the industry.
The findings indicate that labour unions play a pivotal role in the financial networks in both countries. Specifically, in Australia the Construction, Forestry, Maritime, Mining and Energy Union is the biggest recipient of financial support from the fossil fuel industry. By contrast, although regulations have largely restricted political donations from state-owned fossil fuel companies in Norway, labour unions are still among the largest political donors. In both cases, the interests of unions are shown to often intersect with those of the fossil fuel industry, but the results produced are shown to vary as a result of the differing institutional basis for relations between labour unions and the fossil fuel industry.
