In the midst of the pandemic, climate-conscious financiers became excited by a relatively obscure piece of market news. NextEra Energy — the largest renewable energy company in the United States — surpassed ExxonMobil in market capitalization.

In other words, NextEra briefly became the most valuable energy company in the United States. This reversal was all the more shocking given that ExxonMobil was generating vastly more revenue than NextEra, raking in $265 billion in 2019 next to NextEra’s $19.2.

Exxon eventually overtook NextEra once again, but the shift was seen as a harbinger of future market movements by many investors.

While it may be difficult to imagine today, oil prices briefly fell to near zero in the midst of the pandemic. The collapse in prices was down to a combination of a dramatic slowdown in demand for fossil fuels and a quirk in commodities markets that encouraged investors to offload their oil futures all at once.

The big fossil fuel companies took a big hit from collapsing energy prices. The shock was particularly deep for Exxon, which is notorious for its refusal to countenance a shift away from fossil fuels.

The company’s former CEO, Rex Tillerson, who went on to serve as Donald Trump’s secretary of state, was adamant that climate change was simply a new trend to which the world would have to adapt. In 2016, he stated outright that “[t]he world is going to have to continue using fossil fuels, whether they like it or not.”

Exxon is also currently on trial for concealing information about the impact of burning fossil fuels on the climate. As far back as the 1970s, scientists working for ExxonMobil found strong evidence of the greenhouse effect. The company’s response was to slash funding for its science department and divert the cash into promoting climate denialism.

Exxon’s utter failure to signal its willingness to shift away from fossil fuels is a big part of why investors punished the company so heavily during the pandemic. In the first few months of 2020, ExxonMobil lost nearly half its market value.

When the company was overtaken by NextEra, market watchers took it as a clear signal that investors had had enough of fossil fuels.

There was a significant amount of triumphalism at this moment among the world’s capitalist class. The market had finally provided a solution to climate breakdown.

Whether due to demand for green investment products among retail investors, regulatory innovations like ESG scoring and carbon pricing, or simply the realization that green energy was the future, investing in fossil fuels no longer seemed like a sensible strategy for your average investor.

This transition, many argued, would put a great deal of pressure on companies like Exxon to shift investment away from fossil fuels and toward clean energy. And sure enough, the fossil fuel companies were quick to respond.

Total rebranded itself as “TotalEnergies” in a bid to become a “world-class player in the energy transition.” Shell announced it would increase the amount it was investing in renewable energy. BP bought a significant stake in a renewable energy company. Even Exxon finally caved to market pressure and said it would invest billions in “lower greenhouse gas emissions initiatives.”

The upshot of the “success” of these market-based solutions to climate breakdown was, of course, that the world no longer needed to toy with “socialistic” solutions to climate breakdown like the Green New Deal.

But under the surface, the situation was a lot murkier.

Most of the pledges made by the big oil companies were vague and slow to be implemented. In some cases, the announcements amounted to nothing more than greenwashing. The oil companies were betting that the age of oil was far from over.

A number of savvier investors agreed. Several hedge funds quietly started to make big bets that the price of oil would recover quickly as the world transitioned back to fossil fuels once the pandemic was over.

And they were right. After the worst of the pandemic was over, it wasn’t long before the price of oil recovered to pre-pandemic highs. Then it started to skyrocket. When Russia invaded Ukraine, the price of natural gas also soared, which proved a significant boon for the US fracking industry.

The fossil fuel companies, and the investors quietly channeling money into them, had made the right bet. Without a coordinated shift away from fossil fuels, led by the public sector, the world was going to continue to rely on dirty energy.

The market, in other words, was never going to provide a solution to climate breakdown.

ExxonMobil recently announced that it made record profits of $56 billion in 2022. This isn’t only a chart-topping profit for Exxon, it represents an “historic high for the Western oil industry.”

Five percent of these profits will be directed into Exxon’s climate pledges, many of which center on expensive and relatively untested work-arounds like carbon capture and storage. Meanwhile, it continues to ramp up its investments in oil and gas.

BP, which also made record profits of £22 billion last year, has been even more brazen. Alongside a massive share buyback to enrich its investors, BP announced that it would be slowing the shift away from oil and gas. As the think tank Common Wealth points out, the company is spending ten times as much on share buybacks as it is on “low carbon” initiatives.

During the depths of the COVID-19 pandemic, the world missed out on an historic opportunity. With the value of fossil fuel companies tanking, governments could have bought up large chunks of these companies and pressured them to shift toward renewable energies.

And when both demand and inflation were relatively low, they could have announced stimulus packages that promoted decarbonization.

Instead, the oil companies were left to their own devices, Joe Biden’s climate plan was torpedoed by a senator in the pocket of ExxonMobil, and the EU announced a pretty pathetic attempt at their own “Green Deal.”

The result has not only been higher greenhouse gas emissions, it has also been a massive transfer of wealth from households to some of the largest energy companies in the world.

“The market” was never going to solve climate breakdown — and it was either naïve or, more likely, deeply cynical to pretend otherwise.