The Future of Capitalism

People have been altering the climate for a long time now, and not in a good way. The worldwide growth of industry and emergence of capitalism has caused serious climate change issues in the past and continues to pose the greatest threat to humanity’s future even now. The ozone hole above the Antarctic was caused by the release of massive amounts of man-made chemicals, known as ozone-depleting substances (ODS), and as the ozone layer, which protects the Earth from UV radiation, was word down, it had the potential to become hazardous to humans. People recognized this danger and acted to prevent the consequences. The Montreal Protocol is a landmark agreement which sets the limits and standards on the production and consumption of ODS, but what makes it so incredible is the fact that all nations ratified it. All nations recognized this global danger to the climate and took a decisive, preventative measure which did in fact succeed in reducing the size and severity of the ozone hole.

This example clearly shows that people can act when threatened by climate change, yet it also makes the current inaction even the more staggering. But there is no action being taken to prevent Capitalism from destroying the climate because it is so undeniably ingrained in nations all around the world and, unfortunately, it’s rise has led to enormous reliance on carbon emitting industries. The under-regulation of industries which not only pollute water, and soil, but also release incredible amounts of greenhouse gases into the atmosphere, which increase average temperatures worldwide, has created the largest threat to humans ever; so, where is the action? The issue with tackling climate change caused by capitalism, which is different from something like ODS emission, is that the system itself (carbon emissions and all) is so widespread, and not only that, but so heavily relied on by most nations to sustain their current status quo. It cannot simply be cut out like ODS emissions because too many things rely on the industries that are involved in it. Imagine if the government suddenly took away your gas-fueled car, turned off your heat and electricity, and took all meat from store shelves. You would think they were leaving you for dead, wouldn’t you? The belief that eliminating capitalism entirely will somehow resolve climate change is based in the hope that this task is achievable to begin with. With capitalism being so closely ingrained globally, the emission standards it has set have become a danger the world. Yet there is no way to destroy a system that so much of the world has grown so comfortable with, to tackle climate change, capitalism must become our greatest weapon, it must be completely reformed to suit a new sustainable future, by creating alternative solutions to the most harmful carbon-emitting industries.

Before exploring how capitalism must be reformed to aid in climate change, we must first establish its role as the main contributor to climate change. Storm argues that the pre-existing mindset towards capitalism has never been future proof, it has always been set on ignoring the environmental costs associated with uncontrolled consumerism and under-regulated industries. To cite Storm’s central point “Economists mean the same when arguing, as the Stern Review does, that ‘climate change is the greatest externality the world has ever seen’, but they typically forget to add that capitalism is, in essence, an ‘externalizing machine’, committed to keeping the real (environmental) costs of economic activities and their environmental liabilities off the accounting books “(Storm 8) Here Storm is explaining that, since the rise of Capitalism worldwide, economists have ignored the negative environmental impacts of the system, undoubtedly to allow for growth and profits. As he says Capitalism is an “externalizing machine” that can only properly function when the environmental costs are taken out of the equation. Referring to climate change as “the greatest externality the world has ever seen” seems like an absurd statement, as it is obvious that any economic system depends on the natural resources the environment produces, so ignoring the environments state seems like an enormous oversight. But this is exactly what Capitalists have been doing, and this is exactly what must change, because; as we have witnessed in the past few decades, this form of “ignorant” Capitalism has sent a proverbial ball rolling, creating a worldwide climate crisis, that we must now scramble to try to slow or, best case scenario, stop.

Now that we have established that Capitalism cannot very well be eliminated, we can begin to investigate what concrete changes must be made, and how they can be done, to make the system more sustainable for the future. To put it plainly, Capitalism must be reformed to employ clean energies rather than relying on the burning of fossil fuels that cause climate change. To do this carbon emissions need more regulation and taxation, and clean energies need to begin moving to the forefront to replace unsustainable energies. In his paper Is Sustainable Capitalism Possible? David Schweickart discusses the central issue of Capitalism being its undermining of environmental costs; however, he introduces several ways to correct this downside. To quote Schweickart, “This defect can be corrected, however, by appropriate taxes, subsidies and other governmental policies that direct the creative energy of capitalism toward ecological ends.” Schweickart is essentially saying that not only is regulating the industries thriving off capitalism vital, but so is employing capitalism’s inherent “creative energy”, or innovation. But before this can happen the first part he mentions “appropriate taxes, subsidies, and other governmental policies” must be addressed. Current free-market capitalism has made the nations that employ it dependent on carbon emissions, leading to ever-present climate degradation. To reform the system, we must implement regulations like the, widely debated and controversial, carbon tax. A carbon tax is meant to make using carbon-based energy more expensive for corporations, forcing them to look to cheaper alternatives. This is essentially incentivizing the use of clean energies from a financial point of view. Still a very much capitalist ideal as it is ultimately focused on cutting costs, but this cutting of costs will result in a move towards cleaner energies. In a capitalist system, a financial incentive like this is perhaps much stronger than the moral/ethical incentive which don’t involve an industry’s profits.

Now to get into the “creative energy” of Capitalism that Schweickart mentioned. The way capitalism is structured allows for new technology to enter markets and become valid competition for existing tech, the hope in this case is that innovative, sustainable energy alternatives begin to take over the role previously occupied by unsustainable energies, a role they will have access to after the previously cited taxations on carbon emissions are in place. The innovative technologies I am referring to, specifically, are the renewable energies: solar, wind, geothermal, hydropower. These sustainable technologies are the key to reducing carbon emissions, but currently, these technologies are being cast aside to maintain the current unsustainable energy industries running. If Capitalism were to employ these energy sources like it does non-renewable energies, the prospects of slowing climate change would be a lot brighter. This would create new waves of competition to create better green-energy harvesting technologies because people would need to acknowledge that green-energy is the “way of the future” so to speak, and if we’re talking profit, where future profits lie. Albeit this scenario is assuming that the previously mentioned regulations, taxes, subsidies, etc., on carbon emissions force industries and companies to look to (and invest in) clean energy. However, some nations are already employing these clean energies quite readily, in turn, pushing for a more sustainable form of Capitalism. In China, the population is so large that energy needs are enormous, so although they are still mostly reliant on unrenewable energies, there is a significant movement of supplementing these with green energy. As Brown observes “The installation of some 40 million rooftop solar water heaters in China is “perhaps the most exciting recent development in the solar world economy” (p.246). These have been manufactured by 2000 Chinese companies and are now used in rural villages without electricity as well as in cities.” (Brown 7) This means that China is not only investing more in the practical implementation of clean energies, but also supporting the growth of a greener Capitalism in general. The fact that there are “2000 Chinese companies” manufacturing this technology is proof that Capitalism can in fact further sustainable solutions. While these companies are obviously trying to make a profit, they are still providing an alternative to unsustainable energies, and most importantly, this is being implemented now, and can be implemented even more widespread in a short amount of time.

There are many experts and people who don’t believe that the capitalist system cannot be reformed and instead, believe another economic system should replace it. This is an understandable as current, free-market capitalism cannot aid in solving climate change. Yet this point ignores the positive aspects of Capitalism that I have already established. This argument also assumes that it is possible to implement a new economic model to replace Capitalism in a short amount of time. It must be highlighted that time is of the essence in the climate crisis. People need to figure out ways to improve the situations that are practical and feasible to implement now. Another issue sometimes brought up is the idea that Capitalism doesn’t incentivize green solutions to issues, yet this makes Capitalism as a system seem like it inherently strives to be unsustainable. This is not the case, Capitalism is about profit, it does not discriminate per se between sustainable and unsustainable. Unsustainable energies have simply been the cheapest sources of energy up till this point, sustainable energies on large scales are still recent developments so they have not been the most profitable for large industries. A complete overhaul of Capitalism would be complicated and perhaps just push us further into inaction. Instead of trying to figure out how to replace Capitalism, as I’ve established, we could use its assets to fight the issue at hand.