Economics of Climate Change: How to Stop Global Warming by 2030
With the urgent findings of last month’s IPCC Special Report on Global Warming of 1.5°C — an assessment of the scientific, technical, and economic research related to climate change by thousands of scientific experts — the political economy of ecological crisis is more crucial than ever. Sadly, the economics of climate change are mostly presented from a viewpoint that cannot imagine solutions outside the capitalist system and the result is a discussion that is less about the transition to a sustainable system than how to make that transition profitable enough to attract investors. If this assumption — that the strategies available to address climate change are constrained by ‘the market’ — must be made, then of course the only real question is whether scientists can find a way to lower the investment risks of human survival in time for Wall Street to finance it before Lower Manhattan joins the Upper Atlantic.
It is therefore high time we reexamine this assumption.
The IPCC Report on Global Warming of 1.5°C:
What Is to Be Done?
“This report gives policymakers and practitioners the information they need to make decisions that tackle climate change while considering local context and people’s needs. The next few years are probably the most important in our history”
- Debra Roberts, IPCC working-group III co-chair
The good news is that scientists from across the world have analyzed over 6,000 studies and concluded that it is possible to limit global warming to 1.5°C using today’s technology — but there is a catch. Though it is possible within the laws of physics and chemistry, it would require unprecedented efforts at a planetary scale to pull off the greatest hustle in world-history (and probably galactic or even universal history) to transform the global energy-system, overhaul supply-chains, and replenish a pilfered ecosystem but — and here’s the kicker — it all needs to be halfway done in about 12 years.
As for how it might be done, the IPCC special report offers an array of plausible scenarios — some of them hold the line at 1.5°C whereas others rely on more-intensive CO2-removal to overshoot and pull back — but the bottom line of any good scenario is to reach net-zero emissions around mid-century. As the report states bluntly, this would require greenhouse-gas emissions to fall “by about 45% from 2010 levels by 2030” — which is about 60% from today’s levels — and the only way to do that is “by broad transformations in the energy, industry, transport, buildings, agriculture, forestry, and other land-use sectors.”
Concrete Actions That Address the Climate Crisis
To stabilize global temperature at any level, ‘net’ CO2 emissions would need to be reduced to zero. This means the amount of CO2 entering the atmosphere must equal the amount that is removed. Achieving a balance between CO2 ‘sources’ and ‘sinks’ is often referred to as ‘net zero’ emissions or ‘carbon neutrality’
- Chapter Two, IPCC Special Report on Global Warming of 1.5°C
Chapter two digs into how a “whole-system transformation” could work, comparing the advantages and drawbacks of various policies, including “fiscal and structural reforms, public procurement, carbon pricing, stringent standards, information schemes, technology policies, fossil-fuel subsidy removal, climate risk disclosure, and land-use and transport planning.” Overall, the report identifies “four central options” to reduce emissions, which are:
- Decrease Demand for Energy
- Electrify Energy-Services
- Decarbonize Power-Generation
- Decarbonize Non-Electric Fuel Consumption
Very broadly speaking, energy demand can be reduced (1) by increasing energy-efficiency (like fuel-efficient technology, buildings that use less energy for heat, ‘smart-meters,’ etc), gas-powered services can be refitted to use electricity (2), the power sector can be decarbonized (3) by solar, wind, and other renewable installations, and non-electric fuel consumption can be decarbonized (4) by using biodiesel, fuel-cells, and other low-carbon alternatives to fossil-fuels like petroleum. But these are just a handful of the many things that can be done about climate change. There is no shortage of concrete solutions.
Aside from the technical challenges that can only be discovered and solved through implementation, the only major obstacle to achieving all of this and more is the political obstacle.
The Chimera of ‘Sustainable Capitalism’
“Capitalism is inherently anti-ecological. Competition and accumulation constitute its very law of life […] In a society of this kind, nature is necessarily treated as a mere resource to be plundered and exploited. The destruction of the natural world, far being the result of mere hubristic blunders, follows inexorably from the very logic of capitalist production”
- Murray Bookchin
The central obstacle is the doctrine that the present ecological crisis can — and, indeed, must — be resolved under capitalism and that sufficient reforms are possible within its institutional-framework of private property and competitive exchange. This ideology is why so much of the Special Report on Global Warming of 1.5°C had to be about the “major shift in investment patterns” that would be required before humanity can stop killing itself. Rather than taking the definite actions that would halt global warming — which, it bears repeating, are known and feasible — liberal investors like Al Gore claim that “companies and investors will ultimately mobilize most of the capital needed to overcome the unprecedented challenges we now face.” Meanwhile, one of Gore’s heroic investors, hedge-fund manager Micheal Nock, was telling the Guardian that the rich are dropping billions on so-called ‘boltholes’ or luxury climate-fortresses in remote locations, saying “it’s in the back of everybody’s mind at the moment. If there are, shall we say, changes, where can we go?”
These politicians and the shareholders they serve would have the world believe that it was never capitalism as such that destabilized global ecosystems to make money but only the “unsustainable capitalism.” In the fantasy-world of liberals like Gore, the centuries-long process of profit-fueled global warming will simply grind to a stop by asking greedy investors to make greener investments. The “fundamental problem,” as billionaire Elon Musk claims , is not the existence of “an unpriced externality” to the market but the existence of an unpriced internality.
Crisis & The Internal Logic of Capitalism
Capitalism is rooted in an internal logic that organizes labor and resources to increase the production of exchange value — or, more simply, things are produced for money, not for how useful they are. The only way this tendency toward constant expansion of value can be realized is by a process of capital accumulation based on rising productivity, which in turn must cause the average rate of profit to gradually fall so that further accumulation requires an acceleration of productivity-growth — then, productivity rises, capital accumulates, profit-rates fall, and round and round it goes. Since it is impossible to accelerate productivity for all eternity, this process eventually leads to the development of crises of over-production and under-consumption, where exploitation of labor and natural resources reaches increasingly destructive levels as to avoid breakdown of production.
The inevitable bottom-line, in any case, is that continued use of fossil-fuels, as well as extraction of resources from vulnerable ecosystems, manufacture of inefficient vehicles, cost-saving pollution, etc., generates loads of profit and will continue to do so until it is stopped because that is internal to how capitalism works. And what about re-configuring global power-production to use renewable, non-private energy-sources, constructing extensive new public-transit systems, ecological restoration — ? If it was lucrative, investors would have been there long before this discussion began and the notion that any of this is likely to wind up being profitable is exactly the overly-desperate sort of optimism that the planet can no longer afford.
Socialism — or Extinction!
Any plan to restructure such prosperous sectors of the economy is going to conflict with the short-sighted interests of private capital that are advanced by both major parties — however, the working classes have the world to gain from that endeavor. Even if it may be bonkers to envision replacing the capitalist state with rule by the working majority in less than a decade, the alternative is so spectacularly tragic that we are practically forced to. Make no mistake — the next pages of history will tell only one of two stories. Either society transforms its economic base to reach net-zero emissions in a few decades or begins its hellish descent into a sweltering dystopian twilight of famine and war and the oceans, emptied by extinctions, will rise and crash on new shores on mountainsides.
In light of all that, it seems prudent to at least consider what could be achieved if the ordinary people of the working majority were to — hypothetically,† of course — seize the apparatus of the state from these wealthy psychopaths and re-calibrate it to fix this absurd mess. To elaborate on this line of thought, the following section presents a policy-framework that could directly address ecological crisis from a point of view that assumes the state-power has already been brought under control by the classes who make up the working majority for the purpose of advancing their common interests.
[Note: the author chose to limit his consideration to the US as he feels it is not his business to tell people of other nationalities what to do; that being said, much of it may also be broadly applicable in other national contexts]
What an Economic Plan to Fix the Climate Crisis Might Look Like
“World history would indeed be very easy to make if the struggle were only taken up on condition of perfectly favourable chances”
- Karl Marx
The first thing would be to open the throttle on spending, mobilizing the idle workforce by funding a workers’ self-managed federal job-guarantee, as well as programs to assist workers in establishing construction co-ops capable of building new infrastructure for transportation and energy and to assemble movable labor-armies led by workers for large-scale reforestation and similar efforts. Recent unemployment numbers from the US Bureau of Labor Statistics show about 12.6 million under- and unemployed workers and, if the 524,000 ‘discouraged workers’ whom the BLS left out are added, the total US idle workforce may be just over 13 million workers. Using the earnings paid by federal, state, and local governments to employ all US public-sector workers to create a rough estimate, employing the 13 million in the idle workforce at a similar rate might run about $52.7 billion and, to put this in perspective, that is just 8.2% of the current US military budget.
US Armies of Labor & Mass Reforestation
With up to 13 million new workers, a wide array of initiatives are possible and those presented here should only be taken as an incomplete list of potentially helpful actions. On top of the obvious tasks of building solar, wind, and other renewable installations, research suggests that 27 million acres — or about the size of Kentucky — could be reforested by an investment as small as $17 billion. Such a program could remove 1.1–1.6 giga-tonnes of CO2 yearly, offsetting the global carbon-budget up to -2% over the next century. From a perspective of environmental and economic justice, reforestation has an added advantage of not being confined to any particular area, opening the possibility for US armies of labor to assist other nations (by invitation, of course) in restoring ecosystems historically damaged by US military and economic imperialism.
Large-Scale Public Improvement of Energy-Efficiency
Starting with their own homes and communities, worker-led armies of labor should initiate ambitious energy-efficient improvements to buildings in all sectors alike from home-weatherization to reduce energy-use in heating and air-conditioning to the electrification of services and installation of smart-meters. The principle of “taxing bads, not goods” could be applied in matters of energy efficiency — while lifting taxes on earned income, taxes can be levied on cubic-feet of living space to discourage the absurdly high ceilings the rich seem so fond of, as well as on fuel consumption. And an industrial carbon-tax goes without saying, of course.
Channeling Capital Flows into Clean Energy
To fulfill any of the scenarios projected to limit warming to 1.5°C, present investment patterns need to change dramatically to the tune of anywhere from $800 billion to $2.9 trillion with capital flowing from high-emitting sectors into sustainable power and technology. Although the margin of error is wide due to the chaos that inheres in financial markets, annual investments from now to 2050 specifically need to average somewhere in these ranges:
Solar Power: $90 billion — $1 trillion
Wind Power: $100 billion — $350 billion
Nuclear Power: $100 billion — $250 billion
Power Transmission/Distribution/Storage Tech: $300 billion — $1.3 trillion
Additionally, around $1 trillion would have to be pulled from current investments in fossil-fuel extraction and power-generation. To irrigate existing flows of capital into the relevant industries, every tax that might conceivably impact firms that are implementing or developing these renewable technologies ought to be lifted and aggressive incentives put in place. To make up as much of the difference as possible (and bear in mind these projections are global averages), clean-energy subsidies should be created and continually adjusted to target the levels of solar, wind, and nuclear-power investment that are consistent with 1.5°C scenarios.
De-Subsidization & Gradual Expropriation of Fossil-Fuels
Since it would be counter-productive to antagonize private business without good reason — and especially smaller owner-proprietors who have more in common with workers than big capitalists — the owners of energy, transportation, and other relevant firms should be given every reasonable incentive to cooperate voluntarily with the low-carbon conversion of industries. To the greatest extent possible, the administrative and organizational experience of cooperating business-owners should be leveraged to assist with the transformation of capitalist society. That being said, the US is home to 5 of the top 20 corporate emitters (Chevron, ExxonMobil, ConocoPhillips, Peabody Energy, Consol Energy Inc) that are altogether responsible for over 9% of global emissions since 1751 and — especially considering that all these firms knowingly orchestrated disinformation-campaigns to systematically delay climate-action for decades — not everyone should be left off the hook.
With robust unemployment-benefits in place for workers transitioning from affected industries, all fossil-fuel subsidies will need to be phased out rapidly with harsh penalties imposed on private firms that attempt to foist the costs on employees or consumers by price-hikes, wage-cuts, layoffs, and the like. While taking care not to suppress power production beyond what renewables can replace, a heavy progressive tax on emissions from industrial and energy-sector activity would act as a lever to gradually wrest capital from high-carbon energy firms as renewable outputs increase and to oblige private firms to make improvements, minimizing emissions from production.
Conversion of the Military to an Ecological Rescue Force
The US, in particular, is uniquely poised to eliminate a relatively massive amount of emissions by closing the absurd number of military-bases it maintains worldwide. Tens of thousands of troops with all their tanks and hummers and jets could be pulled from the Korean Peninsula alone, which would not just free up significant heaps of resources by reigning in the single largest institutional carbon-emitter but also resolve the world’s last extant nuclear flash-point. US forces in Korea, however, are dwarfed by another 40,000 or so stationed at 112 bases in nearby Japan — and even all that accounts for just a fraction of US bases in the south Pacific.
The strategic positioning of US bases worldwide may also be an opportunity to re-purpose the military’s considerable resources by converting some of this network to provide relief during natural disasters, particularly for the small island-nations most likely to be impacted by warming-driven extreme weather events. Aside from bases deemed fit to re-purpose, however, a rapid shut-down of the war-machine deserves priority for the simple reason that the military is likely responsible for around 80% of US government fuel-consumption, although no exact figure exists as it is exempt from any requirement to track emissions.
Toward a Planetary Socialist Struggle for Ecological & Human Liberation
The most important thing is to understand that a better world is possible. Not just possible in theory or possible to imagine but physically, chemically, technically — it is actually possible. The specter of impossibility has already been banished from every sphere of human endeavor except the political sphere. An overwhelming world-majority recognizes anthropogenic climate change as the existential threat that it is — even the United States, where the science-deniers are now outnumbered 5-to-1 — and the consensus of the international science-community is that humans already possess the power and the technology needed to fix things.
And yet only 6% think that nations can and will succeed in combating climate change. That is where we are — 6%. For every 20 random passersby on the street, there is just a slight chance that more than one would admit to being crazy enough to think the situation is going to improve. There exist sparks of hope — the spread of indigenous resistance and direct action is a major cause for hope and, hell, we even have a few socialists in congress now (and one just helped occupy Nancy Pelosi’s office to demand a Green New Deal). But those sparks must be kindled if they are to become the great conflagration that is necessary. To steal the the words of one of the old revolutionaries — there are moments in history when a desperate struggle by the masses, even for a hopeless cause, becomes necessary.
And friends — this is one of those moments.
In solidarity,
John Laurits
If you like these posts, please consider buying this writer a cup of coffee using PayPal or making a monthly donation using Patreon — it’s like a voluntary subscription directly to an artist & journalist
First published at www.JohnLaurits.com
