Climate and Capitalism

Zachary Karabell offers an interesting critique of Naomi Klein’s This Changes Everything:

In fact, capitalism—in the form of multinational corporations—is doing more than many governments and multilateral institutions to stem the progression of climate change. They are doing so because of self-interest, not altruism; the relentless demand for profit is compelling an increasing percentage of the world’s largest companies to take concerted, forceful action. Yes, many companies remain obstacles to action, as Klein argues, but increasingly, more are becoming the agents of rapid and necessary change.

To say that corporations are doing more than governments to combat climate change is not to say much, since governments have proved so incapable of communicating the problem and rallying the public behind policies to address it.

But, sure, there are corporations that are looking to make profits from developing goods and technologies that will reduce carbon emissions. At the same time, there is no question that there is a multitude of corporations, even beyond the carbon energy sector, whose businesses hurt the climate and whose profits depend on fighting changes in their business practices. And Klein is very effective in explaining how that works.

But to me, the real issue is not the behavior of specific companies. It is the structure and nature of the form of capitalism that humanity has developed and celebrated. Klein is correct, I think, that the era of deregulation gave corporations more freedom to pursue business and profits that harm the environment and climate. But the underlying dynamic is a global form of capitalism that relentlessly pursues growth and sales, promotes consumption, and does not hold corporations fully accountable for the external costs to the environment of their business practices and products.

So this shouldn’t really be an argument over whether capitalism is good or bad. Instead it should be an argument about how to reform or reinvent capitalism so that the incentives in play for both businesses and consumers don’t destroy the planet.

The single most powerful reform I can think of would be to hold businesses and consumers accountable for the choices they make, by starting to adding to the sales price of most goods the costs to the environment and climate. That would mean a tax on carbon, and much more. Want to drive a Hummer? Sure, but you will pay extra. Want to eat burgers every day? Go for it, but boy will that get expensive.

Pricing is the key variable that, to paraphrase Klein, can change everything. If businesses had to pay for their impact on the planet they would change how they do business, and carbon-heavy industries would wither away while carbon-friendly industries would grow and thrive. If consumers had to pay for the way in which their consumption impacts the planet, they would change the what they consume and how much they consume.

Of course, getting governments to make this shift is the hard part. Part of the reason that corporations and governments haven’t done a better job of confronting climate change is that their publics don’t really want to make the changes, and fear that change means sacrifice. In this regard, Klein’s argument is vital. Governments and corporations will change when voters and consumers demand it.