Looking for Hope in the Climate Crisis? Throw Out Trickle Down Economics!
How a middle-out economic model can save us from climate change (and strengthen the economy for everyone.)
It’s official — we are in a climate crisis. Actually, we’ve been in a climate crisis for decades, but we’ve been avoiding common-sense climate policy for, well, forever, and now we find ourselves dangling over the edge. There are varying reports on how much time we have to get our act together, but the Intergovernmental Panel on Climate Change gives us about a decade — 12 years — to rein in emissions in order to keep global heating within the 1.5–2°C range which scientists deem acceptable for life on Earth to continue in a recognizable form (you know, like having food and water and stuff).
So…yikes.
It can be easy to think that we have absolutely no chance of saving ourselves from a fiery armageddon, but stick with me. Part of the reason it’s so easy to feel overwhelmed is that we’ve been given no helpful narratives for what kind of economy could pull us back up over the edge.
Narrative is crucial, here. The stories we tell ourselves and each other about how the world works will shape our ideas about what is possible, and what our role is in creating those various possibilities. All of our systems rely on a common narrative in order to function, and in pushing for big systemic changes we usually need to build a new narrative. So, I was intrigued when I came across a headline on Evonomics — “How Changing My Economic Model Made Me A Climate Change Optimist.” I’m a sucker for anything that provides hope while attacking our broken economic system head-on.
The author, Anthony Patt, argues that neoliberal economics offers no useful insights or pathways to dealing with a problem like climate change because it assumes that market incentives are necessary for innovation and that putting a price on carbon is the only way to curb the harmful use of fossil fuels. In other words, the neoliberal market got us into this climate mess, and it’s not going to be able to pull us out.
Neoliberal economics gives us dangerous blinders by operating on the belief that the economy is this sacred, set-in-stone structure that is governed by the laws of nature, and therefore immovable and inevitable. Questioning neoliberal economics — say, by trying to impose environmental regulations—seems akin to questioning the laws of physics.
But economies are created by humans. We literally just made all of this stuff up. We created a system that has no mechanism to deal with the harmful impacts of carbon emissions and therefore has directly led to a full-blown climate emergency. Do you know that saying, “be careful what direction you go because you might just end up where you’re headed?” Well, here we are.
We wrote the rules that made destroying the planet seem like a good business decision (at least in the short term,) so we can write different rules that make it unprofitable to create carbon emissions or destroy ecosystems. A super-cool bonus of shifting to an economic model that operates as if healthy ecosystems and a stable climate are necessary to create a healthy economy is that it’s based in reality. We know that environmental regulations are actually necessary, not only to ensure we can keep living on Earth, but also to ensure that our economies are as strong and prosperous as possible.
Middle-out economics, as we here at Civic Ventures like to call it, gives us both a narrative and the practical tools to actually deal with the climate crisis, while strengthening our economy for everyone along the way. The middle-out perspective recognizes that economies are human-made and ever-evolving systems, and that cooperation produces more wealth, innovation and prosperity than competition ever can.
From this place we begin to see real pathways to success — both economically and ecologically. We can start by re-regulating stock buybacks. While it might seem odd to suggest that a change in stock law would help us save the planet, stock buybacks are currently drastically diminishing research and development and making firms highly risk-averse, therefore preventing necessary innovation. Why create wealth and investment by developing new technologies when you can just drive your stock prices up by buying back your own stock from your shareholders? We should set rules that discourage buybacks and reward investment and innovation in clean energy and infrastructure, carbon reduction and sequestration, and ecological restoration.
There are so many tools and policies we can employ to redirect our energy and attention to solving the climate crisis and creating an economy that works for everyone, but they are all heresies in the neoliberal narrative. When the collective story is no longer able to help us solve the problems we face, it’s time for a new story. Throwing out neoliberal economics and investing in a middle-out economic model will help us solve the climate crisis and create a thriving economy for everyone along the way.
