Open thread: climate change and growth


in Economics, Politics, Science, The environment

Corktown Footbridge, Ottawa

One of the biggest disagreements that exists among those who believe that action is required to mitigate anthropogenic climate change is between those who see it as a problem that can be managed within existing economic systems and those who argue that it requires profoundly different ones.

The first view can be encapsulated as ‘climate change as an engineering problem.’ We just need to give people the right incentives, and enact policies to change over the energy basis of society to one that is carbon-neutral. Readily available tools for doing this include Pigouvian taxes: those meant to incorporate the societal harms associated with various actions into the prices paid by those who do them. Examples include carbon taxes, road taxes, etc.

The second view is more like ‘climate change as a symptom of the problem of capitalism.’ Indian environmentalist Sunita Narain expresses it well:

All technofixes [for climate change] – biofuels, GM crops or nuclear power – will create the next generation of crisis, because they ignore the fundamental problems of capitalism as a system that ignores injustice and promotes inequality.

In this view, changes made within existing economic systems will never be able to go far enough to produce a sustainable society.

Deciding how to act, there are risks on both sides. The engineering approach will face less resistance, meaning it can be rolled out faster, with a higher probability of getting the key elements in place soon. It may not, however, have the power required to solve the problem. The radical approach may ultimately have more capacity to effect societal change, but it would almost certainly take longer, and there is a significant risk that the new society forged wouldn’t even achieve the objective of climate stability. Capitalism’s major ideological competitor – communism – certainly wasn’t environmentally benign, or effective at managing environmental issues.

Can we cut human emissions to zero, thus stabilizing climate, while retaining the basic elements of the present economic system? If so, what mechanisms are the most important to put in place. If not, what sort of system do we need? One that is more democratic, or more authoritarian? One that alters the relations between humans and the planet how?

{ 30 comments… read them below or add one }

Tristan November 20, 2009 at 10:37 am

“Capitalism’s major ideological competitor – communism – certainly wasn’t environmentally benign, or effective at managing environmental issues.”

Communism doesn’t exist. Marxism is the thesis that Capitalism contains objective contradictions which will inevitably bring about its downfall. What people decide will happen “after” capitalism, or in the intermediary stage, is almost entirely arbitrary. You don’t get to know in advance what kind of relations the next stage of history holds.

Needing to know in advance the content of a future stage of history before it arrives is a major, perhaps the major block against being open to the new. We can’t organize and secure what comes after capitalism, and for that reason we prefer just to stick with what we know – even when we know what we know is broken.

Milan November 20, 2009 at 10:40 am

I knew that would be the phrase you would jump on, though it is peripheral to the overall question.

If we need a radically different alternative to capitalism as now practiced, what would it resemble?

bella gerens November 20, 2009 at 11:11 am

I had actually written a hugely long and thoughtful comment here, all about the relationship between capitalism and climate change and injustice/inequality, but I’ve erased it because it’s entirely beside the point.

This post of yours, it is creepy and frightening. ‘We, the god-like mortals who produce policy, must alter human behaviour from the top down whether humans like it or not. And we must not attempt technological fixes, even if they will mitigate climate change, because they will only make capitalism look good, when in fact it is bad.’

I am not much interested in preserving the status quo – as Tristan says above, it is broken – but I would much prefer that the people who are engaged in destroying it be honest about their motives. Either climate change is the problem, or capitalism is the problem, especially if we admit that the one has the potential to fix the other. But if capitalism is the real problem – and the quote you’ve chosen suggests that Narain thinks this is so – it is both dishonest and dishonourable to hide that behind the veneer of a more populist concern.

Milan November 20, 2009 at 11:36 am

Personally, I don’t think there is a fundamental reason why we cannot change our energy sources and stop deforestation while keeping the basic structure of the global economic system intact.

Dealing with climate change is a hard engineering problem, but ultimately one which can be dealt with by technical means, once there is sufficient will.

bella gerens November 20, 2009 at 12:06 pm

I think it is entirely reasonable to: first, use our technological strengths to deal with climate change; and second, once we have put the environment on a sound footing, turn our philosophical strengths to dealing with injustice and inequality.

To do the second before the first is to admit implicitly that climate change is not the dangerously imminent disaster we’ve been told must take priority over everything else. I’m not fussed if that happens to be true, but I don’t think that implicit admission is going to help climate activists achieve carbon reduction.

What I find worrying is the position of those who advocate the eradication of both emissions and capitalism. That mitigating climate change so conveniently elides with anti-capitalist sentiment triggers my suspicion needle. There is an obvious (though rough) choice of solutions to the emissions problem: stop emissions dead in their tracks by suppressing industrial growth, or push industrial growth into overdrive in order to develop technological solutions to the emissions problem. What is not obvious to me is that either of these choices is possible, let alone that one might have a better chance of working than the other. And yet many climate change activists believe not only that the first is possible, but that it is preferable.

Since what is obvious to them is not obvious to me, I can only assume one of two things. Either they know something I don’t about the possibility of stopping emissions dead in their tracks, or they have some climate-unrelated reason for preferring that option. If the former is true, it does them no service to keep their knowledge quiet. Therefore I can only assume the latter is really the case, thus my suspicion: abandoning capitalism is not incidental to the climate change issue; rather, the climate change issue is incidental to abandoning capitalism.

bella gerens November 20, 2009 at 12:13 pm

I should add that I have no problem with people who want to abandon capitalism, for whatever reason. They obviously may think and act as they see fit in that regard.

What I object to in a more pragmatic sense is that many of those who advocate the growth–>technological progress–>mitigation option are pilloried as ‘deniers’ when manifestly they are not. Discrediting proposed action on this basis is at best dishonest and at worst directly harmful.

Milan November 20, 2009 at 12:33 pm

Growth in economic activity (and the concurrent biophysical impact) does increase the difficulty of achieving emissions reductions. Given the importance of stabilizing climate, there is good cause for considering policies to reduce population growth (especially in rich states) and avoid investments in highly emissions-intensive forms of economic activity, such as those fuelled by coal or unconventional oil.

It may be possible to produce a stable climate in a world where standards of living continue to rise, but I think that the basis for those rising standards may need to change. Rather than being based around the consumption of ever-more resources and the generation of ever-more wastes, improvements in living standards may arise largely from improved technology and better allocation of resources. A computer from 2009 takes about the same resources to make as one from 1999, but is vastly more powerful. It may well be from developments like that that future improvements in human welfare arise.

Tristan November 20, 2009 at 12:39 pm

1. The terms “capitalism” and “communism” are mostly empty. America has never been primarily market based. It was slavery and protectionism in the 19th century, and imperialism and defense industrial complex (command economy) in the 20th.

2. What you are trying to talk about is not abandoning capitalism towards a command economy, a dictatorship of the proletariat. Rather, this way of rejecting capitalism is more akin to a spiritual transformation – because it recognizes the extent to which capitalism produces in us the desires which are never satisfied by the products that sparkle in advertising. Capitalism is a theological institution, and one which prevents us from making rational, technical decisions about things.

Capitalism means more people show up for the Zombie walk than to the action on climate change protest. Capitalism, our religion, does not allow the will which a technical solution needs to materialize.

. November 20, 2009 at 12:53 pm
BuddyRich November 20, 2009 at 1:19 pm

Looking at it both simplistically and from a high level I think capitalism, which boils down to a continous infinite consumption, while not directly opposite to sustainibility, is certainly counterproductive to achieving it.

Certain resources are (or can be) renewable, and are theoretically infinite but certain ones cant so as long as we are continuously consuming we can never be truly sustainable. At best we can slow our consumption, but that is counterproductive to capitalism.

I recently read Small Is Beautiful by EF Schumacher and the first part of the book comes to the same conclusion above and is about the very topic of this blog post.

BuddyRich November 20, 2009 at 1:42 pm

Hit submit before I was done.

Given that Schumacher wrote what he did in 1973, it’s not a new problem but one that we’ve tried fixing via a better capitalism for the last 30 years. At least some people tried, most are oblivious to the devastation that our continuous consumption causes our planet.

bella gerens November 20, 2009 at 1:43 pm

If ‘capitalism’ is an empty term and does not, in fact, exist in the way that we think it does, then what we have in reality is some form of corporatism, wherein business and political power are conjoined. I’m happy to accept this, just as I’m happy to accept that ‘communism’ also has not existed.

I’m well aware that this distrust of capitalism is not in favour of a dictatorship of the proletariat. That would make sense to me. I know, just as you’ve said, that it’s more to do with a spiritual transformation. That doesn’t make sense to me. There is nothing to suggest that capitalism produces unsatisfiable material desires, especially if it does not really exist. Tools do not necessarily condition our minds.

Corporatism may well do this, but only because we have been led to believe by everyone in a position to direct belief that any desire, however non-sensical, can be satisfied by business, politics, or both. Reasonable people know this is not true, and that this alliance needs to be smashed out of existence, but strangely there is a lot of talk about phasing business out of the equation, and very little talk about phasing out politics. This suggests to me that many reasonable people are happy to sacrifice the fruits of business in order to retain their political voice. I have no problem with people wanting this: they are free to do so if they wish. But it is revealed preference, not spiritual transformation, and labelling it so does not make it so.

Capitalism is not a religion; it is an economic system to which many people are wedded because its actual manifestations have improved their quality of life. This is also revealed preference, and is no more theological than the anti-capitalist position.

There are many places in the world where ‘capitalism’ does not intrude on day-to-day life; presumably spiritual anti-capitalists can go there, if they wish. Instead, they evangelise the non-capitalist lifestyle in capitalist societies. In fact, they utilise the benefits of capitalism in order to do so. This is both correct and proper, but it does make your claim that capitalism is the religion sound a bit ironic.

Actually, I find that my material desires are quite satisfied by the products I choose to purchase. I also know that my spiritual desires cannot be satisfied by products. More to the point, I know that my spiritual desires cannot be satisfied by lack of products. Why anyone should suggest that I should, therefore, sacrifice my material desires in pursuit of my spiritual ones is a mystery to me. Presumably there are a lot of people in my position.

And so maybe the reason you get more Zombie walkers than climate change protesters is because dressing up as a zombie and acting a damn fool is more spiritually satisfying to more people. If spiritual satisfaction is a good thing, then multitudes of fake zombies enjoying themselves is a good thing too, no? Just because their spiritual desires are not yours does not mean they are blinkered devotees of a capitalist theological orthodoxy.

Or perhaps you mean capitalism is to blame for this because it has created a world in which it is possible for there to be more fake zombies than climate activists. Can I assume you would rather such a world not exist? That attitude, I posit, whilst rational, is incompatible with many more systems than simply capitalism.

Tristan November 20, 2009 at 3:42 pm

“…, if green capitalism is just greenwashing, i.e. marketing hype unsupported by hard facts, ultimately the ecological crisis will end up endangering capitalist accumulation leading to the the common ruin of today’s contending social classes: the global élite and the transnational precariat. If, on the other hand, green capitalism is the harbinger of a fourth industrial revolution (first: steam and textiles; second: electricity, steel, chemicals; third: electronics, networking; fourth: genomics, greenomics), productivity will rise and this would create a favorable context for victories on wages and labor conditions,”

Tristan November 20, 2009 at 3:48 pm

“one that we’ve tried fixing via a better capitalism for the last 30 years.”

Wait a minute there – if capitalism is “better” than thirty years ago, why are real wages lower in the U.S. lower than in the 1960s? Why is union membership half what it was in the 60s? My point isn’t to end discussion on this point, but just to remind people that whether capitalism is “more just than it was in the 1960s” is still a highly contested issue.

BuddyRich November 21, 2009 at 9:54 am

To Tristan,

I guess I wasn’t clear but I don’t think it is “better”. At least not for the average person. That is exactly what I meant to imply.

Despite early warnings, we’ve been rushing headlong into globalization thinking it is “improving” capitalism, but its not.

Gail November 21, 2009 at 2:42 pm

This “All technofixes [for climate change] – biofuels, ” really terrifies me because the EPA mandated ethanol be added to gasoline, in an effort to appear to be green, and energy independent, during the Bush administration. The only research I can find on emissions says that they are WORSE than ozone. In humans, they cause MORE asthma, emphysema, and cancer. And they are destructive to vegetation. Biofuels are not than answer.
As far as capitalism goes, check out this little animation of unemployment in the US, it’s fascinating:

Milan November 21, 2009 at 3:49 pm

I have a number of posts about biofuels, most of which refer to the serious problems with the sorts of ethanol and biodiesel produced now.

Gail November 21, 2009 at 9:03 pm

Thank you for those links! I am intrigued with the possibility that nitrous oxide is the primary culprit for vegetative damage, since I have read that certain lichens thrive from high levels in the atmosphere. And lord knows, their is a lichen hereabouts that is a harbinger of tree decline which is running rampant. Literally, I can see it grow from one day to the next on many species of trees and woody shrubs, from lilacs to ash to spruce.

Most information I find about the dubious benefits of biofuels concentrate on the production, which entails pesticides and fertilizers. Very rarely can I find any information about the effects of emissions from the burning.

Here is one important study. It focuses mainly on the impact to human health. But it also makes clear that the damage to vegetation is very serious.

If you have any more thoughts, please let me know! I think this is an important issue, because it is occurring in the backyards of many of those politicians who set US policy. The same backyards where their children and grandchildren play.


Gail November 21, 2009 at 9:04 pm
Tristan November 21, 2009 at 9:07 pm

“we’ve been rushing headlong into globalization ”

On what account? Globalization, if it means the free movement of labour through labour markets, has declined since the 19th century. If Globalization means the free movement of capital into and out of markets, then sure, it has increased remarkably since the collapse of the gold standard.

Milan December 2, 2009 at 5:44 pm

One important thing to remember here is that growth and capitalism aren’t the same thing. From an environmental perspective, there has been plenty of ‘growth’ in non-capitalist societies.

The relevant sense of the word, when thinking about the global environment, is the increasing proportion of the total capacity of the planet being used, in order to provide the raw materials we use and absorb our wastes.

If stopping growth, in this sense, is the only way to deal with climate change, just ceasing to be capitalist won’t be adequate. That said, it does seem possible that you could develop a capitalist society that is nonetheless steady state, in terms of its biophysical impacts.

. December 15, 2009 at 11:11 am

“Although the [Copenhagen climate summit] delegates are waking up to the scale of their responsibility, I still believe that they will sell us out. Everyone wants his last adventure. Hardly anyone among the official parties can accept the implications of living within our means, of living with tomorrow in mind. There will, they tell themselves, always be another frontier, another means to escape our constraints, to dump our dissatisfactions on other places and other people. Hanging over everything discussed here is the theme that dare not speak its name, always present but never mentioned. Economic growth is the magic formula which allows our conflicts to remain unresolved.”

. January 25, 2010 at 10:34 am

Economic growth ‘cannot continue’

Continuing global economic growth “is not possible” if nations are to tackle climate change, a report by an environmental think-thank has warned.

The New Economics Foundation (Nef) said “unprecedented and probably impossible” carbon reductions would be needed to hold temperature rises below 2C (3.6F).

Scientists say exceeding this limit could lead to dangerous global warming.

“We urgently need to change our economy to live within its environmental budget,” said Nef’s policy director.

Andrew Simms added: “There is no global, environmental central bank to bail us out if we become ecologically bankrupt.”

None of the existing models or policies could “square the circle” of economic growth with climate safety, Nef added.

. September 11, 2011 at 6:21 pm

Running out of options

Governments in the rich world have painted themselves into a corner

ECONOMIC policy in the developed world over the past 25 years has followed one overriding principle: the avoidance of recession at all costs. For much of this period monetary policy was the weapon of choice. When markets wobbled, central banks slashed interest rates. A by-product of this policy was a series of debt-financed asset bubbles. When the last of those bubbles burst in 2007 and 2008, the authorities had to add fiscal stimulus and quantitative easing (QE) to the policy mix.

The subsequent huge rise in budget deficits was largely the result of a collapse in tax revenues that had been artificially inflated by the debt-financed boom. Britain and America ended up with deficits of more than 10% of GDP, shortfalls that were unprecedented in peacetime.

Those deficits may have been necessary to avoid a repeat of the Depression. Economists will probably still be debating this issue in 75 years’ time, just as they still discuss whether Franklin Roosevelt’s New Deal programme was effective in the 1930s. But the “shock and awe” approach to Keynesian stimulus has an unfortunate consequence. Any decline in the deficit, even to a still whopping 8% of GDP, acts as a contractionary force on the economy: either the government is spending less or taxing more.

. January 18, 2012 at 10:02 am

“Even in favourable political circumstances, many of the goals of environmentalism are inherently difficult to achieve. The truth few people wish to acknowledge is that environmental aims run counter to the primary goal of governments and business, which is to enhance economic growth. However many black swans take flight, more economic activity is likely to exert greater pressure on planetary systems. Yet achieving a steady-state economy of the kind proposed by the thinkers Herman Daly and Tim Jackson is a goal shared by no one outside the environmental movement, even though it could spare us from the catastrophic ebb and flow of the growth-based system.”

. August 7, 2017 at 7:40 pm

Myanmar has been growing so fast—by an average of 7.5% a year for the past five years—that the boom is reverberating in Mae Sot, just across the border in Thailand. Two years ago, says a longtime resident, the site of the mall was a swamp, and Mae Sot was a poky little border town with two small grocery stores. Today huge supermarkets, car dealers, electronics outlets and farm-equipment showrooms line the wide new road from the border into town, patronised by a steady stream of Burmese shoppers. Skeletons of future apartment blocks loom; the Thai government is building a new international airport. The Asian Development Bank (ADB) forecasts that Myanmar’s growth will hit 8% next year.

The region is full of such stories. Cambodia, Laos, the Philippines and Vietnam have been growing only slightly more slowly. Overall, the ten countries of the Association of South-East Asian Nations (ASEAN) grew at an annual rate of 5% over the past five years: not quite as fast as China or India, but much faster than Europe, Japan or America. The region’s 625m-odd people are growing richer and better educated; they will live longer, healthier and more prosperous lives than their parents. Of course, plenty of poverty remains—most people in Myanmar are still subsistence farmers—but the region’s economic trends are promising.

. September 10, 2017 at 7:29 pm

But perhaps the biggest problem residual Keynesianism confronts is that, when it does work, it collides headfirst with the environmental crisis. A programme that seeks to sustain employment through constant economic growth, driven by consumer demand, seems destined to exacerbate our greatest predicament.

. October 1, 2017 at 8:56 pm

The numbers are daunting. Just to keep unemployment in check, India needs to create some 10m-12m jobs a year. When economic growth is strong, it has just been able to do that: the government’s Labour Bureau estimates that from 2013 to 2015 the economy added 11m jobs a year. A slowdown in the prior two-year period, however, had kept job growth at half that level, leaving a shortfall of 10m jobs. The tipping point seems to be economic growth of about 7%. Ominously, growth has steadily slowed since 2016; in the quarter ending in June it fell to 5.7%, although transitory factors may have played a part in that.

. September 16, 2018 at 2:10 pm

Why Growth Can’t Be Green
New data proves you can support capitalism or the environment—but it’s hard to do both.

. September 16, 2018 at 2:19 pm

“A team of scientists led by the German researcher Monika Dittrich first raised doubts in 2012. The group ran a sophisticated computer model that predicted what would happen to global resource use if economic growth continued on its current trajectory, increasing at about 2 to 3 percent per year. It found that human consumption of natural resources (including fish, livestock, forests, metals, minerals, and fossil fuels) would rise from 70 billion metric tons per year in 2012 to 180 billion metric tons per year by 2050. For reference, a sustainable level of resource use is about 50 billion metric tons per year—a boundary we breached back in 2000.

The team then reran the model to see what would happen if every nation on Earth immediately adopted best practice in efficient resource use (an extremely optimistic assumption). The results improved; resource consumption would hit only 93 billion metric tons by 2050. But that is still a lot more than we’re consuming today. Burning through all those resources could hardly be described as absolute decoupling or green growth.

In 2016, a second team of scientists tested a different premise: one in which the world’s nations all agreed to go above and beyond existing best practice. In their best-case scenario, the researchers assumed a tax that would raise the global price of carbon from $50 to $236 per metric ton and imagined technological innovations that would double the efficiency with which we use resources. The results were almost exactly the same as in Dittrich’s study. Under these conditions, if the global economy kept growing by 3 percent each year, we’d still hit about 95 billion metric tons of resource use by 2050. Bottom line: no absolute decoupling.

Finally, last year the U.N. Environment Program—once one of the main cheerleaders of green growth theory—weighed in on the debate. It tested a scenario with carbon priced at a whopping $573 per metric ton, slapped on a resource extraction tax, and assumed rapid technological innovation spurred by strong government support. The result? We hit 132 billion metric tons by 2050. This finding is worse than those of the two previous studies because the researchers accounted for the “rebound effect,” whereby improvements in resource efficiency drive down prices and cause demand to rise—thus canceling out some of the gains.”

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