Naomi Klein. This Changes Everything: Capitalism vs. the Climate. New York: Simon & Schuster, 2014
Journalist Naomi Klein spent five years delving deeply into the problem of climate change and what it may mean for our capitalist way of life. She concludes that up until now the world has been failing to tackle the problem effectively, and that’s mainly because the necessary steps “fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have been struggling to find a way out of this crisis.”
The first part of her statement is widely accepted, at least among scientists and most world leaders. The 2009 climate summit in Copenhagen set a goal of limiting average global temperature to no more than 2 degrees Celsius above what it was when countries first turned to coal to power the industrial revolution. That would require the richer countries to reduce their carbon emissions “in the neighborhood of 8-10 percent a year.” So far that isn’t happening. According to the EPA, US carbon emissions dropped only 2.9% between 2014 and 2015, and only 11.7% over the ten-year period from 2005 to 2015. In the world as a whole, that drop was offset by increased emissions from developing countries.
Much more controversy surrounds the question of what to do about it. Many people hope for a technological fix that could solve the problem with minimal impact on our habits of production and consumption. Economic conservatives want to limit changes to what can occur through market mechanisms such as consumer demand for greener products, while minimizing the role of government regulation. Liberals are willing to entertain government measures like a carbon tax, but are suspicious of calls for a more radical economic transformation.
Klein is willing to think more radically, since she regards climate change as a real game changer. It poses a massive threat; it is happening rapidly; and it forces us to rethink how we have related to nature and organized our economic lives.
[T]he real reason we are failing to rise to the climate moment is because the actions required directly challenge our reigning economic paradigm (deregulated capitalism combined with public austerity), the stories on which Western cultures are founded (that we stand apart from nature and can outsmart its limits), as well as many of the activities that form our identities and define our communities (shopping, living virtually, shopping some more).
No doubt people prefer little problems with little solutions to big problems requiring big solutions. That makes Klein’s book a tough sell. Nevertheless, it’s worth reading, just in case she may be right.
The “greatest market failure”
The roots of the climate problem lie deeper than capitalism, in the relationship to nature that Klein calls “extractivism”. She defines this as “a nonreciprocal, dominance-based relationship with the earth, one purely of taking. It is the opposite of stewardship….” Both Western religion and Western science conceived nature as a subordinate thing to be used for the benefit of spiritually or mentally superior humanity. Although these ideas preceded industrial capitalism, “the ability to harness the power of coal to power factories and ships is what, more than any single other factor, enabled these dangerous ideas to conquer the world.” The expansion of production and consumption in the modern market economy was built on the foundation of fossil fuel extraction.
Implicit in the notion of the “free market” was the freedom to dominate nature. (Klein also sees domination in the relationship of capital to labor and rich countries to poor countries, a point I’ll return to later.) As long as producers and consumers of fossil fuels “pay nothing for the privilege of treating our shared atmosphere as a free waste dump,” the “invisible hand” of the market fails to channel self-interest toward the general good. Since the true cost of burning fossil fuels is not factored in when calculating corporate profits or consumer prices, neither producers nor consumers have enough incentive to change their behavior. That’s especially true if much of the environmental damage they are causing hasn’t happened yet or is happening somewhere else on the planet. Klein quotes the Stern Review on the Economics of Climate Change when it calls that problem “the greatest market failure the world has ever seen.”
Part One of Klein’s book is called “Bad Timing.” The world was starting to hear about scientific evidence of global warming in the 1980s, around the same time that “neoliberal” economic policies were on the ascendancy. Those policies aimed to use low taxes and deregulation to free up private capital while restricting public action. After the collapse of the Soviet Union, conservatives declared the historical struggle among economic ideologies over and free-market capitalism the winner. A grand market failure was not something they wished to consider, let alone correct. “A belief system that vilifies collective action and declares war on all corporate regulation and all things public simply cannot be reconciled with a problem that demands collective action on an unprecedented scale and a dramatic reining in of the market forces that are largely responsible for creating and deepening the crisis.”
That is why the debate over climate change is so deeply polarizing. For social critics, the climate issue is the most powerful argument against deregulated capitalism. And for precisely that reason, the defenders of that retrograde brand of capitalism have strong motives to deny or minimize the problem.
Global climate and global trade
Another bit of bad timing is that the era of global climate agreements is also the era of global free-trade agreements, and the two have conflicting goals. Klein describes Ontario’s Green Energy and Green Economy Act, which Al Gore praised as the “single best green energy [program] on the North American continent.” In order to promote renewable energy and give manufacturers of materials like solar panels incentives to come to Ontario, it included a requirement that a certain percentage of materials be locally sourced. However, the World Trade Organization ruled that this “protectionist” provision violated the terms of the North American Free Trade Agreement. Global free-trade pacts have stronger enforcement mechanisms than international agreements to reduce carbon emissions, so “trade trumps climate.”
Global free trade contributes to climate problems in other ways. China has become “a free trader’s dream…and a climate nightmare.” Corporations feeling burdened by environmental regulations or high labor costs can offshore their manufacturing operations to developing countries. There costs can be contained by low environmental and labor standards, which go together in a package deal. “The same logic that is willing to work laborers to the bone for pennies a day will burn mountains of dirty coal while spending next to nothing on pollution controls because it’s the cheapest way to produce.” That is certainly a capitalist logic, at least in one form. Producing cheap goods for export is not the only way to compete in the global marketplace, but it is an obvious way for a poor country wishing to industrialize quickly.
The resulting loss of manufacturing jobs in countries like the United States puts pressure on less educated workers to hold onto jobs in the fossil fuel industry if they have them, and to oppose environmental regulations that threaten those jobs. (Instead of working to raise environmental standards internationally, President Trump proposes to lower them domestically, protecting coal jobs by joining the global race to the bottom.) Another downside is that the goods imported from overseas that could have been produced at home have to be shipped, another big contributor to fossil fuel emissions.
Managing the economic transition
Klein maintains that running the economy on renewable energy is becoming technically feasible, but the private sector will not make the transition fast enough on its own. The profits from using fossil fuels are too great, and the profits from large-scale investments in solar or wind power are too uncertain. She sees an expanded role for governments and community cooperatives in fighting carbon emissions and promoting cleaner alternatives.
Some fossil fuel production can be curbed through carbon taxes that reflect the true cost to society of that production. Government can also charge higher royalty rates for oil, gas, and coal extraction. These additional revenues can then be devoted to investing in the “post-fossil fuel future, as well as to helping communities and workers adapt to these new realities.” Some forms of production are so irrational from an environmental perspective that they need to be banned outright. In order to get at the least accessible coil, oil and gas, companies are “blasting the bedrock of our continents, pumping our water with toxins, lopping off mountaintops, scraping off boreal forests, endangering the deep ocean, and scrambling to exploit the melting Arctic.”
Until the day comes–if it ever does–when renewables can provide as much energy as fossil fuels do now, we will need to reduce energy consumption. Here too, Klein believes that private self-interested decisions will have to be supplemented by new public policies. For example:
That means cheap public transit and clean light rail accessible to all; affordable, energy-efficient housing along those transit lines; cities planned for high-density living; bike lanes in which riders aren’t asked to risk their lives to get to work; land management that discourages sprawl and encourages local, low-energy forms of agriculture; urban design that clusters essential services like schools and health care along transit routes and in pedestrian-friendly areas….
Although she is a critic of contemporary capitalism, Klein is not as radical as some authors I have read. She does not call for an end to capitalism as such, or an end to economic growth altogether. That would be a problem especially for the less developed countries, which contain a majority of the world’s people and are counting on economic growth to lift millions out of poverty. She summarizes what she does hope for in a section called “Growing the Caring Economy, Shrinking the Careless One”:
Obviously a huge number of jobs would be created in the sectors that are part of the green transition—in mass transit, renewable energy, weatherization, and ecosystem restoration. And those sectors that are not governed by the drive for increased yearly profit (the public sector, co-ops, local businesses, nonprofits) would expand their share of overall economic activity, as would those sectors with minimal ecological impact (such as the caregiving professions…).
The richer countries, which are farther along in the transition to a service economy, might center their lives less around acquiring–and powering–material things. But they could be compensated by living lives richer in human relationships and services. (I wouldn’t be the first sociologist to suggest that modern urbanites and suburbanites sacrificed a degree of human community in their rush toward material prosperity.) Meanwhile the locus of material progress could shift more to the poorer countries. But higher standards of environmental protection would need to spread everywhere.