A number of times, discussions on this site have questioned how the reality of climate change should affect our political philosophy, when it comes to supporting or opposing capitalism. For both practical and theoretical reasons, I have been of the view that replacing capitalism is not a sensible goal, for those deeply concerned about climate change. Capitalism has virtues that may not be present in alternative systems – and what serious alternatives really exist at this point? – and there is no reason to be confident that an alternative system will be able to address climate change, even after we have put in all the time and effort that such a major societal reorganization would require.
Capitalism also includes powerful tools that could be applied to problems like tackling climate change. By establishing a carbon price, emissions reductions can be made to occur in the places where doing so is cheapest. That has benefits in terms of how quickly and cheaply emissions can be cut. It also has benefits for liberty, since it changes the incentives that people face, without forcing them to make one choice or another.
The urgency of climate change is another major reason to focus on the changes that are absolutely necessary, while leaving grand experiments for a more relaxed period in history. Preventing temperature increase of over 2°C above pre-industrial levels requires very aggressive cuts in global emissions. They need to peak as soon as possible (the sooner, the lower total costs will be) and fall to a dramatically lower level by 2050. Given that this is the lifetime of assets being constructed right now, from highways to buildings to power plants, the need to start changing incentives is urgent. It is much more plausible that this could be achieved by incorporating carbon pricing into our existing economic and political framework than it is to think we could launch a whole alternative structure quickly and effectively enough to achieve that result.
Must capitalism be discarded in order to address climate change, or is reform sufficient? Thinking strategically, what should those who are intensely concerned about climate change work to achieve, in terms of political and economic reforms? What real alternatives to capitalism as now practiced are there, and what would the likely benefits and problems associated with them be?