Can Capitalism Survive Climate Change?

This whole week, beginning March 31, the United Nations Ad Hoc Working Groups on climate change are meeting in Bangkok in the critical first round of negotiations to follow up on the resolutions of the climate talks in Bali in December.

There is now a solid consensus in the scientific community that if the change in global mean temperature in the 21st century exceeds 2.4 degrees Celsius, changes in the planet’s climate will be large-scale, irreversible, and disastrous. Moreover, the window of opportunity for action that will make a difference is narrow – that is, the next 10 to 15 years.

Throughout the North, however, there is strong resistance to changing the systems of consumption and production that have created the problem in the first place. Alongside this resistance is a preference for ”techno-fixes,” such as ”clean” coal, carbon sequestration and storage, industrial-scale biofuels, and nuclear energy.

Globally, transnational corporations and other private actors resist government-imposed measures such as mandatory caps. They have preferred to use market mechanisms like the buying and selling of ”carbon credits,” which largely amount to a license for corporate polluters to keep on polluting.

In the global South, elites have shown little willingness to depart from the high-growth, high-consumption model inherited from the North. They maintain a self-interested conviction that the North must first adjust and bear the brunt of adjustment before the South takes any serious step toward limiting its greenhouse gas emissions.

Contours of the Challenge

In the climate change discussions, all parties recognize the principle of ”common but differentiated responsibility’.’ In other words, the global North must shoulder the brunt of the adjustment to the climate crisis since it is responsible for the economic trajectory that has brought the world to the edge of catastrophe. Also, the global response should not compromise the right to develop of the countries of the global South.

The devil, however, is in the details. As analysts like Martin Khor of the Third World Network have pointed out, the global reduction of 80% in greenhouse gas emissions from 1990 levels by 2050 that many now recognize as necessary, translates into reductions of at least 150-200% on the part of the global North in order to adhere to these two principles – ”common but differentiated responsibility” and recognition of the right to development of the countries of the South.

Psychologically and politically, however, the North at this point does not likely have what it takes to meet the problem head-on.

The prevailing assumption is that the affluent societies can take on commitments to reduce their greenhouse gas emissions but still grow and enjoy their high standards of living if they shift to non-fossil fuel energy sources. This assumption extends to the method of reduction, namely that the mandatory cuts agreed to multilaterally by governments will be implemented within the country according to a market-based system, that is, the trading of emission permits. The subtext is: techno-fixes and the carbon market will make the transition relatively painless and – why not? – profitable, too.

But many of these technologies are decades away from viable use. In the short and medium term, relying on a shift in energy dependence to non-fossil fuel alternatives will not be able to support current rates of economic growth. Also, the trade-off for more crop land devoted to biofuel production means less land on which to grow food and therefore greater food insecurity globally.

Clearly, the dominant paradigm of economic growth is one of the most significant obstacles to a serious global effort to deal with climate change. But this destabilizing, fundamentalist growth-consumption paradigm is itself more effect rather than cause.

The central problem is a mode of production whose main dynamic is the transformation of living nature into dead commodities, creating tremendous waste in the process. The driver of this process is consumption – or more appropriately overconsumption – and the motivation is profit or capital accumulation: capitalism, in short.

It has been the generalization of this mode of production in the North and its spread from the North to the South over the last 300 years that has caused the accelerated burning of fossil fuels and rapid deforestation, two of the key man-made processes behind global warming.

The South’s Dilemma

One way of viewing global warning is as a key manifestation of the latest stage of a wrenching historical process: the privatization of the global commons by capital. The climate crisis must thus be seen as the expropriation by the advanced capitalist societies of the ecological space of less developed or marginalized societies.

This leads us to the dilemma of the South. Before the full extent of the ecological destabilization brought about by capitalism, the South was expected to simply follow the ”stages of growth” of the North. But now, the South can’t do so without bringing about ecological Armageddon. Already, China is on track to overtake the United States as the biggest emitter of greenhouse gases, and yet the elite of China as well as those of India and other rapidly developing countries are intent on reproducing the American-type overconsumption-driven capitalism.

Thus, for the South, the implications of an effective global response to global warming include several necessary but insufficient conditions. First, countries like China can no longer opt out of a mandatory regime on the grounds that it is a developing country. Second, developing countries must push the North to transfer technology to mitigate global warming and provide funds to assist in adapting the new technology.

These steps are important, but they are only the initial steps in a broader, global reorientation of the paradigm for achieving economic well-being.

While this adjustment will need to be much, much greater and faster in the North, the adjustment for the South will essentially be the same: a break with the high-growth, high-consumption model in favor of another model of achieving the common welfare.

The strategy of Northern elites has been to try to decouple growth from energy use. In contrast, a progressive comprehensive climate strategy in both the North and the South must reduce growth and energy use while raising the quality of life of the broad masses of people. This will mean placing economic justice and equality at the center of the new paradigm.

The transition must be one not only from a fossil-fuel based economy but also from an overconsumption-driven economy.

The goal must be the adoption of a low-consumption, low-growth, high-equity development model that results in an improvement in people’s welfare, a better quality of life for all, and greater democratic control of production.

The elites of the North and the South will not likely agree to such a comprehensive response. The farthest they are likely to go is for techno-fixes and a market-based cap-and-trade system. Growth will be sacrosanct, as will the system of global capitalism.

Yet, confronted with apocalypse, humanity cannot self-destruct. It may be a difficult road, but the vast majority will not commit social and ecological suicide to enable the minority to preserve its privileges.

Threat and Opportunity

Climate change is both a threat and an opportunity to bring about the long postponed social and economic reforms that had been derailed or sabotaged in previous eras by elites seeking to preserve or increase their privileges.

The difference is that today the very existence of humanity and the planet depend on the institutionalization of economic systems based not on feudal rent extraction or capital accumulation or class exploitation, but on justice and equality. I am hopeful that a thorough reorganization of production, consumption, and distribution will be the end result of humanity’s response to the climate emergency and the broader environmental crisis.

In the social and economic system that will be collectively crafted, there will be room for the market. However, the more interesting question is: will such a system have room for capitalism? Will capitalism as a system of production, consumption, and distribution survive the challenge of coming up with an effective solution to the climate crisis?

Walden Bello is a senior analyst at Focus on the Global South, a program of Chulalongkorn University’s Social Research Institute, and a columnist for Foreign Policy In Focus (