Capitalism vs. the Climate

This growth imperative is why conventional economists reliably approach the climate crisis by asking the question, How can we reduce emissions while maintaining robust GDP growth? The usual answer is "decoupling" — the idea that renewable energy and greater efficiencies will allow us to sever economic growth from its environmental impact. And "green growth" advocates like Thomas Friedman tell us that the process of developing new green technologies and installing green infrastructure can provide a huge economic boost, sending GDP soaring and generating the wealth needed to "make America healthier, richer, more innovative, more productive, and more secure."

But here is where things get complicated. There is a growing body of economic research on the conflict between economic growth and sound climate policy, led by ecological economist Herman Daly at the University of Maryland, as well as Peter Victor at York University, Tim Jackson of the University of Surrey and environmental law and policy expert Gus Speth. All raise serious questions about the feasibility of industrialized countries meeting the deep emissions cuts demanded by science (at least 80 percent below 1990 levels by 2050) while continuing to grow their economies at even today's sluggish rates. As Victor and Jackson argue, greater efficiencies simply cannot keep up with the pace of growth, in part because greater efficiency is almost always accompanied by more consumption, reducing or even canceling out the gains (often called the "Jevons Paradox"). And so long as the savings resulting from greater energy and material efficiencies are simply plowed back into further exponential expansion of the economy, reduction in total emissions will be thwarted. As Jackson argues in Prosperity Without Growth, "Those who promote decoupling as an escape route from the dilemma of growth need to take a closer look at the historical evidence — and at the basic arithmetic of growth."

The bottom line is that an ecological crisis that has its roots in the overconsumption of natural resources must be addressed not just by improving the efficiency of our economies but by reducing the amount of material stuff we produce and consume. Yet that idea is anathema to the large corporations that dominate the global economy, which are controlled by footloose investors who demand ever greater profits year after year. We are therefore caught in the untenable bind of, as Jackson puts it, "trash the system or crash the planet."

The way out is to embrace a managed transition to another economic paradigm, using all the tools of planning discussed above. Growth would be reserved for parts of the world still pulling themselves out of poverty. Meanwhile, in the industrialized world, those sectors that are not governed by the drive for increased yearly profit (the public sector, co-ops, local businesses, nonprofits) would expand their share of overall economic activity, as would those sectors with minimal ecological impacts (such as the caregiving professions). A great many jobs could be created this way. But the role of the corporate sector, with its structural demand for increased sales and profits, would have to contract.

So when the Heartlanders react to evidence of human-induced climate change as if capitalism itself were coming under threat, it's not because they are paranoid. It's because they are paying attention.

6. Taxing the Rich and Filthy

About now a sensible reader would be asking, How on earth are we going to pay for all this? The old answer would have been easy: we'll grow our way out of it. Indeed, one of the major benefits of a growth-based economy for elites is that it allows them to constantly defer demands for social justice, claiming that if we keep growing the pie, eventually there will be enough for everyone. That was always a lie, as the current inequality crisis reveals, but in a world hitting multiple ecological limits, it is a nonstarter. So the only way to finance a meaningful response to the ecological crisis is to go where the money is.

That means taxing carbon, as well as financial speculation. It means increasing taxes on corporations and the wealthy, cutting bloated military budgets and eliminating absurd subsidies to the fossil fuel industry. And governments will have to coordinate their responses so that corporations will have nowhere to hide (this kind of robust international regulatory architecture is what Heartlanders mean when they warn that climate change will usher in a sinister "world government").

Most of all, however, we need to go after the profits of the corporations most responsible for getting us into this mess. The top five oil companies made $900 billion in profits in the past decade; ExxonMobil alone can clear $10 billion in profits in a single quarter. For years, these companies have pledged to use their profits to invest in a shift to renewable energy (BP's "Beyond Petroleum" rebranding being the highest-profile example). But according to a study by the Center for American Progress, just 4 percent of the big five's $100 billion in combined 2008 profits went to "renewable and alternative energy ventures." Instead, they continue to pour their profits into shareholder pockets, outrageous executive pay and new technologies designed to extract even dirtier and more dangerous fossil fuels. Plenty of money has also gone to paying lobbyists to beat back every piece of climate legislation that has reared its head, and to fund the denier movement gathered at the Marriott Hotel.

Just as tobacco companies have been obliged to pay the costs of helping people to quit smoking, and BP has had to pay for the cleanup in the Gulf of Mexico, it is high time for the "polluter pays" principle to be applied to climate change. Beyond higher taxes on polluters, governments will have to negotiate much higher royalty rates so that less fossil fuel extraction would raise more public revenue to pay for the shift to our postcarbon future (as well as the steep costs of climate change already upon us). Since corporations can be counted on to resist any new rules that cut into their profits, nationalization — the greatest free-market taboo of all — cannot be off the table.

When Heartlanders claim, as they so often do, that climate change is a plot to "redistribute wealth" and wage class war, these are the types of policies they most fear. They also understand that, once the reality of climate change is recognized, wealth will have to be transferred not just within wealthy countries but also from the rich countries whose emissions created the crisis to poorer ones that are on the front lines of its effects. Indeed, what makes conservatives (and plenty of liberals) so eager to bury the UN climate negotiations is that they have revived a postcolonial courage in parts of the developing world that many thought was gone for good. Armed with irrefutable scientific facts about who is responsible for global warming and who is suffering its effects first and worst, countries like Bolivia and Ecuador are attempting to shed the mantle of "debtor" thrust upon them by decades of International Monetary Fund and World Bank loans and are declaring themselves creditors — owed not just money and technology to cope with climate change but "atmospheric space" in which to develop.

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So let's summarize. Responding to climate change requires that we break every rule in the free-market playbook and that we do so with great urgency. We will need to rebuild the public sphere, reverse privatizations, relocalize large parts of economies, scale back overconsumption, bring back long-term planning, heavily regulate and tax corporations, maybe even nationalize some of them, cut military spending and recognize our debts to the global South. Of course, none of this has a hope in hell of happening unless it is accompanied by a massive, broad-based effort to radically reduce the influence that corporations have over the political process. That means, at a minimum, publicly funded elections and stripping corporations of their status as "people" under the law. In short, climate change supercharges the pre-existing case for virtually every progressive demand on the books, binding them into a coherent agenda based on a clear scientific imperative.

More than that, climate change implies the biggest political "I told you so" since Keynes predicted German backlash from the Treaty of Versailles. Marx wrote about capitalism's "irreparable rift" with "the natural laws of life itself," and many on the left have argued that an economic system built on unleashing the voracious appetites of capital would overwhelm the natural systems on which life depends. And of course indigenous peoples were issuing warnings about the dangers of disrespecting "Mother Earth" long before that. The fact that the airborne waste of industrial capitalism is causing the planet to warm, with potentially cataclysmic results, means that, well, the naysayers were right. And the people who said, "Hey, let's get rid of all the rules and watch the magic happen" were disastrously, catastrophically wrong.

Tags: climate change, environment, global warming, heartland institute, heartland institute, intergovernmental panel on climate change, ipcc, naomi klein

    • Naomi Klein
    • Naomi Klein is an award-winning journalist, syndicated columnist and author of the international bestsellers, The Shock Doctrine: The Rise of Disaster Capitalism and No Logo. Her regular columns for The Nation magazine and the Guardian newspaper are syndicated internation...

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