The results are in: No amount of “green capitalism” will be able to ensure the profound changes we must urgently make to prevent the collapse of civilization from the catastrophic impacts of global warming.
The following is an updated version of an article that originally was published in the Real-World Economics Review. We consider Richard Smith’s article foundational to understanding the world we live in. Given its length, several sittings or a printout may be required to complete reading.
As soaring greenhouse gas (GHG) emissions drove global CO2 concentrations past 400 parts per million in May 2013, shell-shocked climate scientists warned that unless we urgently adopt “radical” measures to suppress GHG emissions (50 percent cuts in emissions by 2020, 90 percent by 2050) we’re headed for an average temperature rise of 3 degrees or 4 degrees Celsius before the end of the century. Four degrees might not seem like much, but make no mistake: Such an increase will be catastrophic for our species and most others. Humans have never experienced a rise of 4 degrees in average temperatures. But our ancestors experienced a four-degree cooler world. That was during the last ice age, the Wisconsin Stage (26,000 to 13,300 years ago). At that time, there were two miles of ice on top of where I’m sitting right now in New York City. In a four-degree warmer world “Heat waves of undreamt-of-ferocity will scorch the Earth’s surface as the climate becomes hotter than anything humans have ever experienced. … There will be “no ice at either pole.” “Global warming of this magnitude would leave the whole planet without ice for the first time in nearly 40 million years.” Sea levels will rise 25 meters - submerging Florida, Bangladesh, New York, Washington DC, London, Shanghai, the coastlines and cities where nearly half the world’s people presently live. Freshwater aquifiers will dry up; snow caps and glaciers will evaporate - and with them, the rivers that feed the billions of Asia, South America and California. The “wholesale destruction of ecosystems” will bring on the collapse of agriculture around much of the world. “Russia’s harsh cold will be a distant memory” as “temperatures in Europe will resemble the Middle East. … The Sahara will have crossed the Strait of Gibraltar and be working its way north into the heart of Spain and Portugal. … With food supplies crashing, humanity’s grip on its future will become ever more tentative.” Yet long before the temperature increase hits four degrees, the melting will have begun thawing the permafrost of the Arctic, releasing vast quantities of methane buried under the Arctic seas and the Siberian and North American tundra, accelerating GHG concentrations beyond any human power to stop runaway warming and sealing our fate as a species.(1)
Yet paradoxically, most climate scientists and even most climate activists have yet to grapple with the implications of their science: namely that GHG suppression on the order of 90 percent in less than 40 years would require a radical across-the-board economic contraction in the developed industrialized countries, and economic contraction is incompatible with a stable capitalism. On this point, the Chamber of Commerce and National Association of Manufacturers would appear to be right and pro-growth, pro-market environmentalists wrong: Under capitalism, growth and jobs are more often than not at odds with environmental protection. There may be some win-wins here and there. But for the most part, given capitalism, imposing big cuts in greenhouse gas emissions means imposing big job cuts across industrialized economies around the world. That’s why, regardless of protests, no capitalist government on the planet will accept mandatory cuts in GHG emissions. Since the Reagan Revolution of the 1980s, when environmentalists began to turn to the market, “green growth” theorists and proponents have argued au contraire that “jobs and environment are not opposed,” that economic growth is compatible with emissions reduction, that carbon taxes and/or cap-and-trade schemes could suppress GHG emissions while “green jobs” in new tech, especially renewable energy, would offset lost jobs in fossil fuel industries. Their strategy has failed completely, yet this remains the dominant view of leading climate scientists, including James Hansen, and of most environmental organizations.
All such market-based efforts are doomed to fail, and a sustainable economy is inconceivable without sweeping systemic economic change. The project of sustainable capitalism based on carbon taxes, green marketing, “dematerialization” and so forth was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society; they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns: For example, the science tells us that to save the humans, we have to drastically suppress fossil fuel consumption, even close down industries like coal. But no corporate board can sacrifice earnings, let alone put themselves out of business, just to save humanity, and no government can suppress fossil fuel industries because to do so would precipitate economic collapse. I claim that profit-maximization is an iron rule of capitalism, a rule that trumps all else, and this sets the limits to ecological reform - not the other way around, as green capitalism theorists had supposed.
And contrary to green capitalism proponents, across the spectrum from resource extraction to manufacturing, the practical possibilities for “greening” and “dematerializing” production are severely limited. This means the only way to prevent overshoot and collapse is to enforce a massive economic contraction in the industrialized economies, retrenching production across a broad range of unnecessary, resource-hogging, wasteful and polluting industries, even virtually shutting down the worst. Yet this option is foreclosed under capitalism because this is not socialism: No one is promising new jobs to unemployed coal miners, oil drillers, automakers, airline pilots, chemists, plastic junk makers and others whose jobs would be lost because their industries would have to be retrenched - and unemployed workers don’t pay taxes. So CEOs, workers and governments find that they all “need” to maximize growth, overconsumption, even pollution, to destroy their children’s tomorrows to hang onto their jobs today. If they don’t, the system falls into crisis, or worse. So we’re all on board the TGV of ravenous and ever-growing plunder and pollution. As our locomotive races toward the cliff of ecological collapse, the only thoughts on the minds of our CEOs, capitalist economists, politicians and most labor leaders is how to stoke the locomotive to get us there faster. Corporations aren’t necessarily evil. They just can’t help themselves. They’re doing what they’re supposed to do for the benefit of their owners. But this means that, so long as the global economy is based on capitalism and private property and corporate property and competitive production for market, we’re doomed to a collective social suicide - and no amount of tinkering with the market can brake the drive to global ecological collapse. We can’t shop our way to sustainability, because the problems we face cannot be solved by individual choices in the marketplace. They require collective democratic control over the economy to prioritize the needs of society and the environment. And they require local, reigional, national and international economic planning to reorganize the economy and redeploy labor and resources to these ends. I conclude, therefore, that if humanity is to save itself, we have no choice but to overthrow capitalism and replace it with a democratically planned eco-socialist economy.
I. SAVING THE EARTH FOR FUN AND PROFIT
In rejecting the antigrowth “limits” approach of the first wave of environmentalism in the 1970s, the pro-market theoretical founders of pro-growth “green capitalism” in the 1980s and ’90s, Paul Hawken, Lester Brown and Francis Cairncross, argued that green technology, green taxes, green labeling, eco-conscious shopping and the like could “align” profit-seeking with environmental goals, even “invert many fundamentals” of business practice such that “restoring the environment and making money become one and the same process.”(2) This turn to the market was an expression of broader trends from the 1980s in which activists retreated from collective action to change society in favor of individualist approaches to trying to save the world by embracing market forces - “shopping our way to sustainability.”(3)In the market mania of the Reagan-Clinton era, Herman Daly’s plea for imposing “limits to growth” came to seem dated - like Birkenstocks and Bucky Fuller’s geodesic dome houses. Many American environmentalists bought into the “doing well by doing good” message of green capitalism because there had never been much of a left or socialist presence in the American environmental movement beyond a small anarchist fringe, unlike Europe, where many if not most greens were also reds. So it was easy for American environmentalists to go with the market - and there were jobs. Protesting didn’t pay the rent. Some became eco-entrepreneurs or signed on with one or another of the hundreds of new green businesses from organic foods to eco-travel to certifying lumber or fair trade coffee that sprang up in the ’80s and ’90s. Others connected with mainstream environmental NGOs like the Sierra Club to focus on petitioning and lobbying efforts. In these and other ways, through the ’80s and ’90s, protesting gradually gave way to lobbying and promoting green capitalism.
"There is No Polite Way to Say That Business is Destroying the World”
Of all the eco-futurist writers of the 1980s and ;90s, entrepreneur and “Natural Capitalism” guru Paul Hawken has probably been the most influential voice for eco-capitalism. Hailed by Inc. magazine as “the poet laureate of American capitalism,” Hawken says he was inspired to pen his best seller, Ecology of Commerce (1993), when his company Smith & Hawken won the prestigious Environmental Stewardship Award from the Council on Economic Priorities in 1991. When George Plimpton presented the award to Smith & Hawken at New York’s Waldorf-Astoria Hotel, Hawken says he “looked out over the sea of pearls and black ties, suddenly realizing two things: first, that my company did not deserve the award and, second, that no one else did either. What we had done was scratch the surface of the problem. … But in the end, the impact on the environment was only marginally different than if we had done nothing at all. The recycled toner cartridges, the sustainably harvested woods, the replanted trees, the soy-based inks and the monetary gifts to nonprofits were all well and good, but basically we were in the junk mail business, selling products by catalog. All the recycling in the world would not change the fact that [this] is an energy-intensive endeavor that gulps down resources.” For the reality, Hawken said, was that:
Despite all this good work, we still must face a sobering fact. If every company on the planet were to adopt the best environmental practices of the “leading” companies - say, the Body Shop, Patagonia or 3M - the world would still be moving toward sure degradation and collapse. … Quite simply, our business practices are destroying life on earth. Given current corporate practices, not one wildlife preserve, wilderness or indigenous culture will survive the global market economy. We know that every natural system on the planet is disintegrating. The land, water, air and sea have been functionally transformed from life-supporting systems into repositories for waste. There is no polite way to say that business is destroying the world. (4)
So business is destroying the world. But, for Hawken, the problem wasn’t capitalism as such, but just bad “business practices” of corporations which, he thought, could be fundamentally “inverted” to save the world: “[T]his behavior is not the inherent nature of business, nor the inevitable outcome of a free-market system.” The problem was that “the expense of destroying the earth is largely absent from the prices set in the marketplace. A vital and key piece of information is therefore missing in all levels of the economy.”(5) The key was to get the market to “tell the ecological truth.” In her Harvard Business School manifesto for green capitalism, “Costing the Earth,” the Economist magazine’s environmental editor, Francis Cairncross, said “Governments need to step in to align private costs with social costs … [as] embodied by the ‘polluter pays’ principle.’ “ (6) And in his book Eco-Economy, Worldwatch Institute founder Lester Brown explained that “Ecologists and economists - working together - can calculate the ecological costs of various economic activities. These costs could then be incorporated into the market price of a product or service in the form of a tax.” So carbon taxes and the like would “discourage such activities as coal burning, … the generation of toxic waste, the use of virgin raw materials … the use of pesticides, and the use of throwaway products.” (7) Paul Hawken even went so far as to claim that “[T]here is no question that we could introduce a steady, incremental phase-in of a carbon tax on coal, one that would eventually tax coal out of business in two decades’ time.” “The whole key to redesigning the economy is to shift incrementally most, if not all, of the taxes presently derived from ‘goods’ to ‘bads,’ from income and payroll taxes to taxes on pollution, environmental degradation and nonrenewable energy consumption. … The resulting changes in the marketplace would be dramatic. Every purchase would become more constructive and less destructive.” Hawken described his vision of “Natural Capitalism” thusly:
The restorative economy described in this book … unites ecology and commerce into one sustainable act of production and distribution that mimics and enhances natural processes.
In such an economy … restoring the environment and making money would be the same process. Business … needs a plan, a vision, a basis - a broad social mandate that will turn it away from the linear, addictive, short-term economic activities in which it is enmeshed and trapped. … Rather than argue about where to put our wastes, who will pay for it, and how long it will be before toxins leak out into the groundwater, we should be trying to design systems that are elegantly imitative of climax ecosystems found in nature. Companies must re-envision and re-imagine themselves as cyclical corporations, whose products either literally disappear into harmless components, or … [produce] no waste [at all.]” (8)
NRDC founder and Yale Dean Gus Speth summed up this utopian vision of the market in green capitalism as well as anyone:
The market can be transformed into an instrument for environmental restoration; humanity’s ecological footprint can be reduced to what can be sustained environmentally; the incentives that govern corporate behavior can be rewritten; growth can be focused on things that truly need to grow and consumption on having enough, not always on more; the rights of future generations and other species can be respected. (9)
The “sustainable” “green” “natural” capitalism movement took off in the 1980s and ’90s: Organic farming came into the mainstream, and Whole Foods became the fastest-growing sector of the grocery industry. Green businesses sprouted up in every sector from renewable energy to organic cottons to eco-travel. Stores added green products in every aisle. Hip, eco-conscious businesses like Patagonia gave “1% to nature.” (Ben & Jerry’s gave 7½ percent!) “Sustainable investing” mutual funds looked to fund renewable energy. “Green certification” outfits sprung up to save the tropical forests and the sea turtles. Eventually, even big corporations like 3M and Walmart embraced green “business practices,” cutting waste, recycling, and producing and adopting less toxic products. Europe introduced the first large-scale cap-and-trade system in January 2005. Finland introduced the first carbon tax in 1990, and many other countries followed suit, including Sweden, Germany, Britain, South Korea, South Africa, Korea, some provinces of Canada and even some American states, including Maryland, Colorado and California.
The Green Capitalist God That Failed
There can be no doubt that we are better off for many of these initiatives. But two decades on, for all the organic groceries, the energy-efficient lightbulbs, appliances and buildings, the carbon trading and carbon taxes, the global ecology is collapsing faster than ever. Climate change, as Bill McKibben tells us in his new book, Eaarth, is no longer a distant threat; it’s already upon us. CO2 and other greenhouse gas emissions are growing at four times the rate they grew in the 1990s. 2010 was the hottest year on record, and the 2000s the hottest decade on record. From peat fires around Moscow to huge floods in Pakistan, super hurricanes, super storms, super winter snowfalls and floods or, alternately, extended drought (even both in Australia) are becoming the norm. Seas are rising and ice is melting faster than scientists imagined possible even as recently as 2007. Tropical forests continue to fall. Glacier melt is accelerating around the world with dire implications for agriculture from India to China, California to Peru. Rivers are drying up. Soil depletion continues unabated. Water tables are falling relentlessly around the world. Drought has become a permanent feature of the American Southwest, of Australia, of regions of Africa and the Middle East, and northern China. Ocean fisheries are collapsing right and left. Coral reefs, scientists now think, could die off in many places by mid-century and over the entire planet by 2100. Penguin colonies are at risk. The collective impact of nearly 7 billion people pumping their emissions into the atmosphere and dumping their excreta and toxics into drains and rivers that eventually issue into the seas is changing the chemical composition of the world’s vast oceans, threatening the future of living creatures in the oceans and those who live off the oceans. We’re destroying life and wiping out species so fast that, in Bill McKibben’s words, “We’re running Genesis backward, decreating.”(10) In short, for all the green initiatives, corporate business practices have changed little - or the little they’ve changed has had no great effect. From Kyoto to Cancun, governments have all made it abundantly clear that they will not accept binding limits on greenhouse gas emissions; they will not sacrifice growth today to save the planet tomorrow. Europe’s cap-and-trade scheme, the first large-scale effort, enriched traders and polluters but failed to put the brakes on the relentless rise of greenhouse gas emissions. What few carbon taxes governments actually imposed likewise have failed to stem emissions. At the end of the day, the project of green capitalism is in disarray.
II. DELUSIONS OF “NATURAL CAPITALISM”
III. CAPITALISM WITHOUT CONSUMERISM?
IV. CLIMATE CHANGE OR SYSTEM CHANGE?