The Inconvenient Truth About Climate and Capitalism

by - Wednesday, May 12, 2021

(*This blog post was previously submitted as an essy assignment as part of my DCU Masters, I've changed the wording very slightly in parts and have omitted my lengthy reference list but it is available if anyone would like to see it).

This statement is not to be taken in a literal sense – it is, in essence, throwing down the gauntlet and challenging us to approach the topic of global warming in a new way. The very real and practical physical aspects of climate change are the benchmark by which we must judge our actions and remediate behaviour. Naomi is suggesting, rather, that to find the solution and a way forward, we need to stop looking at this problem in a purely physical sense and look at a wider societal interpretation of how we got to where we are now, and how we might find a solution through change. It is true that there is a reluctance to challenge the very fundamental source of our behaviour which is steered for the most part by the economic framework of capitalism. A shifting of perspective is not only desired, it is crucial to implementing a true understanding of the actions necessary to reduce our carbon emissions and to create a more sustainable society.

To begin with, a brief introduction to capitalism is helpful to assess how it fits with global warming. What is capital? In the words of Thomas Piketty ‘capital is defined as the sum total of nonhuman assets that can be owned and exchanged on some market’ It should be noted that this often includes ‘natural capital’, i.e. the environment itself can be a commodity. Capitalism can broadly be defined as an economic system where private ownership and endeavour is key. It is distinguished from socialism in that the State does not control the means of production and income is related to individual effort and free market forces. Competition is also an integral part of a capitalist economic system, free market pressures mean that innovation and change are integral to achieving success. Growth is another facet of capitalism and whilst there is some debate around capitalism always having an implication of growth, by and large in the current system, growth is embedded in the aspiration of profit and it is the assumption of most modern countries that growth is an indicator of well-being. There are some moves towards offering an alternative view, for example New Zealand’s ‘well-being’ budget or Bhutan’s Happiness Index. Whether the ideas behind these have transformed into practice is probably a topic for another day but they certainly seems like a step in the right direction. 
There are many variants of capitalism but in general, most states rely on a basic capitalist framework, whilst having government regulation and social supports in place to varying degrees. So what is the connection between capitalism and climate change?

Although there are much wider social issues in terms of financial inequality, the most apparent way in which global warming and capitalism are linked, is via production and the need for economic growth. The production mechanism requires energy, which to date, has primarily been sourced from fossil fuels. Materials used in production may be grown or made in ways that are harmful to the environment, and again, fossil fuel is required at all the different stages, from creation to distribution. So why is that a concern now? The knowledge that we have now, in terms of industrialisation, is that there is a direct link between this kind of economic activity, and the release of CO² and other harmful gases into the atmosphere, disrupting the Earth’s balance. Since the 1950s, warming and changes in the atmosphere have been increasing at an unprecedented rate. (IPCC 5th Assessment Report).

Global warming is undoubtedly the biggest issue we are now facing as human beings. The realisation that anthropogenic warming of the planet has contributed to biodiversity loss, sea level rise, unpredictable weather events and more, is now a scientific certainty. In order to reduce further damage and prevent hugely damaging consequences to human beings and the physical world around us, we need to ensure that massive changes in how we live and use natural resources, are implemented as soon as possible. ‘Reaching and sustaining net zero global anthropogenic CO2 emissions and declining net non-CO2 radiative forcing would halt anthropogenic global warming’ (IPCC, 2018).

We have known the stark facts for some time. It is a planet wide problem which needs to be tackled on a large scale and acknowledgement of this has led to cooperative endeavours between governments such as The Intergovernmental Panel on Climate Change, set up in 1988. The United Nations Framework Convention on Climate Change came into being in 1994 and the Kyoto Protocol in 1997, as well as, more recently, the Paris Agreement which was a landmark agreement, bringing a new impetus to climate action. The Paris Agreement aims to bring global temperature rise well below 2◦C and to limit future increase even further (UNFCC). If we look for the most straightforward answer, we simply need to reduce carbon emissions and call a halt to using fossil fuels. However the strategies and methodologies needed to implement this are vastly more complex and intuitive that a simple mathematical equation. Our lives have been centred on the idea of limitless resources for a long time and we are still over 80% dependent on fossil fuels for our energy supplies. Despite clear scientific knowledge about what needs to be done, and global agreement that this is a problem requiring a cohesive and cooperative drive, we remain slow to act.

Part of the problem is the intrinsic connection between the widely accepted and practiced economic system which is capitalism, and the need to fuel the growth that it depends on, with ever increasing resource use and output of waste. Is it possible to continue the idea of capitalism without any adjustment? This seems unlikely as planetary boundaries are encroaching on the idea of limitless resources in an ever more real way all the time. However, theories such as steady state economics and sustainable growth are proposed as a way forward that will reconcile the seeming contradiction between capitalist production and damage to the planet. If we work on the assumption that growth is needed for the developing world countries to ‘catch up’, then we have to frame that growth within some kind of boundary. Steady state economics advocates a closed system where throughput remains at a constant and the effects of the interchange of materials don’t surpass the ecological framework, i.e. pollution and production are kept within a balance of needs and management of natural resources. Consumption patterns can be adjusted to incorporate faster growing crops and distribution patterns can also be adjusted to be more equitable (Daly, 1992). Daly also addresses the idea of population control and the impacts a growing population have on resources and quality of life – ‘Fewer people, and lower per capita resource consumption, facilitated by more equitable distribution, mean more (and more abundant) lives for a longer, but not infinite, future.’
The concept of sustainable development allows for growth but in a more measured way. Economic growth is included in the Sustainable Development Goals in Goal 8. ‘Sustained and inclusive economic growth can drive progress, create decent jobs for all and improve living standards’. 

Switching to a model of sustainable growth involves a wide range of actions and agreement on policy. Removing fossil fuel subsidies is the starting point but huge investment is needed in public transport and alternative energy sources as well as a shift in thinking around management of natural resources and waste reduction. Developing countries have the opportunity to ‘climate-proof’ at the early stages of urban growth by providing a good transport infrastructure. Improving efficiencies in agricultural production can increase yield whilst decreasing environmental impact. Higher income countries can use taxation as a disincentive for polluting industries and can invest in research in new low-carbon technologies, as well as using carbon tax income to resource development and green infrastructure (Better Growth, Better Climate Report, 2014). Proponents of sustainable growth believe that this kind of economic growth will allow developing countries and those in living in poverty to eventually obtain a better standard of living that is more aligned with prosperous nations.
Sustainable growth and steady state are concepts that are at odds with one another in many ways but both are systems of thought that are an adjustment to an economic system that is already in place. Sustainable growth assumes that we need growth within a capitalist system in order to be able to maintain and improve living standards whereas steady state proposes that we need to live within a closed system which doesn’t require growth but is still operating in a similar way to the system we already have.

If we begin to examine the systems we have, however, we can see that there are issues with the theory behind growth as an equalizer or steady state as a means to solve our environmental crisis. The idea of ‘trickle-down’ economics has not worked in practice. Increasingly, those who own the largest share of market capital are becoming wealthier whilst poverty is still very much a global issue (UN World Social Report, 2020). A sustainable future should allow for human well-being, whilst working within the boundaries of the planet. Steady State allows that we can ‘deplete non-renewables at a rate equal to the rate at which a renewable substitute is developed’ (Daly, 1992). But what if the rate of development of renewables isn’t sufficient to provide for global needs? Some of the green growth theory makes an assumption of technological solutions to reduce and remove carbon from the atmosphere, yet there is very little evidence to support that this can be done on the scale required in the short time frame we have. The following are just a few of the limitations with technology: Not all means of transport can be moved to electric; planes and ships will still need fuel. Nuclear energy, unless it can be advanced, will not be enough to supply the world’s energy needs and wind energy has the problem of sourcing enough locations to meet increased need (Trainer, 2011). There is also the issue of ‘unintended consequences’. Using technologies to remove carbon from the atmosphere or pump it into the ground may result in unexpected and damaging results and the global warming crisis is already at dangerous levels and room for experimentation is limited to non-existent. Discounting the technological fixes, what remains is an overly optimistic view that by increasing efficiency and switching to green energy supply and production methods, we can meet the targets necessary to reach zero carbon by 2050.

Consumption and use of materials is another issue. Growth needs more materials and more energy and unless every industry and production method can be switched to a circular model, the problems of waste and emissions remain. According to Dietrich et al, a ‘business as usual’ scenario would mean that humans would require 180 billion tonnes of materials by 2050. Similarly, the UNEP 2014 Report outlines that ‘during the 20th Century, extraction of construction extraction of construction minerals grew by a factor of 34, industrial ores and minerals by a factor of 27, fossil fuels by a factor of 12 and biomass by a factor of 3.6. The total material extraction increased by a factor of about 8 to support a 23-fold GDP growth’. In the same report the comparison between developed and developing countries is shown, with resource use as high as 30/40 tonnes per person per year in developed countries compared to a much tinier figure of 2 tonnes per person per year in developing countries. If we assume that in the interests of social justice, developing countries have a right to a standard of life similar to that of developed countries, then a growth economy implies more resource usage, not less. As the resource mining to date has put a heavy burden on the environment, then it is difficult to reconcile further extraction of resources with addressing the environmental crisis.

What really is the crux of the matter, though, is that capitalism itself is the problem. If the behavioural and motivational elements of ensuring that change occurs are factored in, the current power imbalance is a very large disincentive to the vested interests who have become extremely wealthy on the back of destroying the environment. The difficulties lie in a system which enormously benefits the few who have influence and capital. Fossil fuel companies have spent millions on disinformation campaigns and on lobbying and creating a smokescreen around the whole area of global warming, although they were fully aware from the beginning of the nature of the problem (Heede, 2019). Free market profiteering, in general, has led to social inequality as well as a massive depletion of natural resources and a degradation of soil. Consumerist culture drives a constant quest for the new and everything becomes quickly replaceable, creating an ever increasing mountain of waste. One of the most extraordinary aspects of this mass cognitive dissonance is the fact that the very industries who are causing the problem, are actually being subsidised by governments around the world, including Ireland where €2.4 billion in subsidies was provided in 2018 (Burke-Kennedy, 2020). This suggests that States may not always act in the interests of their citizens.

Thus the truth is, indeed, very inconvenient for some. However, there is a growing recognition that alternatives are available. Naomi Klein spoke recently about ‘ideas lying around’ (which was originally a quote from Milton Friedman) in her Democracy Now Video Interview in March 2020. The ‘ideas lying around’ can lead to greater inequality or alternatively, can be oriented towards a complete shift in thinking and living. One such idea, or set of ideas, is degrowth, which has been around for some time and originated in the 1970s with the economist Nicholas Georgescu-Roegen. It went on to be adopted by many more academics in different fields and the first degrowth conference was held in Paris in 2008. Degrowth is not a prescribed set of principles but rather an umbrella movement which advocates a different value system, placing greater emphasis on human and environmental well-being. As the title suggests, it is also advocating a ‘decrease’ or winding down of how we live and what we consume. Proponents of degrowth would challenge the ability of sustainable development to solve the ecological crisis and would challenge also, the utilitarian basis of capitalism. It also broadly embraces a more holistic view of humanity, allowing for deeper motivations and social capital (Demaria, 2013). It is critical of the consumerist profit driven lifestyles that arise from capitalism and acknowledges the Easterlin Paradox which states that improved income does not equal improved happiness. Degrowth is perhaps not an answer but rather a signpost that there are new roads to travel and new territories to be explored, in a way that may improve our lives and allow the planet to heal. One of the elements of degrowth is the idea of redistribution of wealth. In order to rebalance world wealth, it is necessary to acknowledge the role of geopolitics and colonisation in our currently unequal system. Wealth in the north has often been acquired at the expense of the global south so from a social justice perspective, redistribution is a means of balancing and removing the need for pressures around economic growth (Hickel, 2019).

Another concept which fits well under the degrowth umbrella is doughnut economics which originated with Kate Raworth. Called doughnut economics because of the circles which are part of the colourful visual attached to the theory, it postulates that we live within an inner circle of human need, i.e. housing, food, etc. and the outer circle, which is the ecological ceiling of our planetary home. Between the two circles are the ways in which we can have a safe and just life (Raworth, 2017). Raworth writes in Doughnut Economics that ‘humanity faces some formidable challenges, and it is in no small part thanks to the blind spots and mistaken metaphors of outdated economic thinking that we have ended up here.’ Significantly, this year saw Amsterdam become the first city to embrace the doughnut model as the guideline for policy making. Post-Covid, it has offered an experimental way to meet the needs of citizens without further degrading the planet. It is an example of where a certain set of circumstances have created the window of opportunity for change. The doughnut model has been scaled down to create a ‘city portrait’ which shows where needs are not being met and can encompass everything from housing to imports.

In summary, if we examine the ‘inconvenient truth’ again, it is indeed a major inconvenience for the few, but in light of world events in 2020, it might perhaps be the most convenient – and opportune, time to rethink and reshape our world. The facts are simple; we need to decouple from carbon usage which has created the problem of global warming in the first place and shift our expectations around our entitlement to excess. It might just be the best time to release ourselves from the stranglehold of capitalism and consider alternatives. There can be more than one narrative. In the same way that monoculture is a disaster for the natural world, a single system way of living has also been a disaster for humanity. What is encouraging is the global mass social movement on climate change. A space has been created where new ideas can be formulated and incorporated into policy and everyday life. This is already happening, and has been for a long time in movements such as transition towns and more recently, there has been a major influence from Greta Thunberg and her Fridays for Future campaign. As Naomi outlines in ‘This Changes Everything’, the uniting of indigenous groups in a common cause, and social movements around the world, can both be a very powerful force for change. Technological connectivity has also opened up new possibilities for global change. Social media can be a double edged sword and used to further the status quo but it also allows for that integration of ideas around the world. Working from the ground up can often be a better tool for implementing change, as the people involved are invested on a personal level and have a connection to the projects. Grassroots movements are also able to operate outside the framework of bureaucratic hesitancy and can therefore be more effective on a smaller but widespread scale.

It seems appropriate to conclude with the words of Klein:

‘All of this is why any attempt to rise to the climate challenge will be fruitless unless it is understood as part of a much broader battle of world-views, a process of rebuilding and reinventing the very idea of the collective, the communal, the commons, the civil, and the civic after so many decades of attack and neglect.’


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