This Changes Everything: Capitalism vs. The Climate

by Naomi Klein

Or we look but tell ourselves that all we can do is focus on ourselves. Meditate and shop at farmers’ markets and stop driving—but forget trying to actually change the systems that are making the crisis inevitable because that’s too much “bad energy” and it will never work.

Climate change has never received the crisis treatment from our leaders, despite the fact that it carries the risk of destroying lives on a vastly greater scale than collapsed banks or collapsed buildings.

In the very same way, if enough of us stop looking away and decide that climate change is a crisis worthy of Marshall Plan levels of response, then it will become one, and the political class will have to respond, both by making resources available and by bending the free market rules that have proven so pliable when elite interests are in peril.

I have come to think of that night as the climate movement’s coming of age: it was the moment when the realization truly sank in that no one was coming to save us.

Moreover, during the same years that our governments failed to enact a tough and binding legal architecture requiring emission reductions, supposedly because cooperation was too complex, they managed to create the World Trade Organization—an intricate global system that regulates the flow of goods and services around the planet, under which the rules are clear and violations are harshly penalized.

we have not done the things that are necessary to lower emissions because those things fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have been struggling to find a way out of this crisis. We are stuck because the actions that would give us the best chance of averting catastrophe—and would benefit the vast majority—are extremely threatening to an elite minority that has a stranglehold over our economy, our political process, and most of our major media outlets.

The three policy pillars of this new era are familiar to us all: privatization of the public sphere, deregulation of the corporate sector, and lower corporate taxation, paid for with cuts to public spending.

our economic system and our planetary system are now at war. Or, more accurately, our economy is at war with many forms of life on earth, including human life. What the climate needs to avoid collapse is a contraction in humanity’s use of resources; what our economic model demands to avoid collapse is unfettered expansion. Only one of these sets of rules can be changed, and it’s not the laws of nature.

That’s tough for a lot of people in important positions to accept, since it challenges something that might be even more powerful than capitalism, and that is the fetish of centrism—of reasonableness, seriousness, splitting the difference, and generally not getting overly excited about anything. This is the habit of thought that truly rules our era, far more among the liberals who concern themselves with matters of climate policy than among conservatives, many of whom simply deny the existence of the crisis.

Nor have the various attempts to soft-pedal climate action as compatible with market logic (carbon trading, carbon offsets, monetizing nature’s “services”) fooled these true believers one bit. They know very well that ours is a global economy created by, and fully reliant upon, the burning of fossil fuels and that a dependency that foundational cannot be changed with a few gentle market mechanisms. It requires heavy-duty interventions: sweeping bans on polluting activities, deep subsidies for green alternatives, pricey penalties for violations, new taxes, new public works programs, reversals of privatizations—the list of ideological outrages goes on and on.

It is these adaptations that worry me most of all. Unless our culture goes through some sort of fundamental shift in its governing values, how do we honestly think we will “adapt” to the people made homeless and jobless by increasingly intense and frequent natural disasters? How will we treat the climate refugees who arrive on our shores in leaky boats? How will we cope as freshwater and food become ever more scarce? We know the answers because the process is already under way. The corporate quest for natural resources will become more rapacious, more violent. Arable land in Africa will continue to be seized to provide food and fuel to wealthier nations, unleashing a new stage of neocolonial plunder layered on top of the most plundered places on earth (as journalist Christian Parenti documents so well in Tropic of Chaos). When heat stress and vicious storms wipe out small farms and fishing villages, the land will be handed over to large developers for mega-ports, luxury resorts, and industrial farms. Once self-sufficient rural residents will lose their lands and be urged to move into increasingly crowded urban slums—for their own protection, they will be told. Drought and famine will continue to be used as pretexts to push genetically modified seeds, driving farmers further into debt.42 In the wealthier nations, we will protect our major cities with costly seawalls and storm barriers while leaving vast areas of coastline that are inhabited by poor and Indigenous people to ...

And this points to what really lies behind the casual attitude about climate change, whether it is being expressed as disaster denialism or disaster capitalism. Those involved feel free to engage in these high-stakes gambles because they believe that they and theirs will be protected from the ravages in question, at least for another generation or so.

In a 2007 report on the security implications of climate change, copublished by the Center for Strategic and International Studies, former CIA director R. James Woolsey predicted that on a much warmer planet “altruism and generosity would likely be blunted.”

It’s true that catastrophic climate change would inflate the role of government to levels that would likely disturb most thinking people, whether left or right. And there are legitimate fears too of what some call “green fascism”—an environmental crisis so severe that it becomes the pretext for authoritarian forces to seize control in the name of restoring some kind of climate order.

What I am saying is that the science forces us to choose how we want to respond. If we stay on the road we are on, we will get the big corporate, big military, big engineering responses to climate change—the world of a tiny group of big corporate winners and armies of locked-out losers that we have imagined in virtually every fictional account of our dystopic future, from Mad Max to The Children of Men to The Hunger Games to Elysium.

Then about three years ago, I started to notice that green energy programs—the strong ones that are needed to lower global emissions fast—were increasingly being challenged under international trade agreements, particularly the World Trade Organization’s rules.

One of the key provisions in almost all free trade agreements involves something called “national treatment,” which requires governments to make no distinction between goods produced by local companies and goods produced by foreign firms outside their borders. Indeed, favoring local industry constitutes illegal “discrimination.”

Denmark has among the most successful renewable energy programs in the world, with 40 percent of its electricity coming from renewables, mostly wind. But it’s significant that the program was rolled out in the 1980s, before the free trade era began, when there was no one to argue with the Danish government’s generous subsidies to the community-controlled energy projects putting up wind turbines (in 1980, new installations were subsidized by up to 30 percent).

What is most remarkable about these parallel processes—trade on the one hand, climate on the other—is the extent to which they functioned as two solitudes. Indeed, each seemed to actively pretend that the other did not exist, ignoring the most glaring questions about how one would impact the other.

the commitments made in the climate negotiations all effectively functioned on the honor system, with a weak and unthreatening mechanism to penalize countries that failed to keep their promises. The commitments made under trade agreements, however, were enforced by a dispute settlement system with real teeth, and failure to comply would land governments in trade court, often facing harsh penalties.

And yet when the subject of climate change comes up in discussion in wealthy, industrialized countries, the instant response, very often, is that it’s all China’s fault (and India’s fault and Brazil’s fault and so on). Why bother cutting our own emissions when everyone knows that the fast developing economies are the real problem, opening more coal plants every month than we could ever close?40 This argument is made as if we in the West are mere spectators to this reckless and dirty model of economic growth. As if it was not our governments and our multinationals that pushed a model of export-led development that made all of this possible. It is said as if it were not our own corporations who, with single-minded determination (and with full participation from China’s autocratic rulers), turned the Pearl River Delta into their carbon-spewing special economic zone, with the goods going straight onto container ships headed to our superstores. All in the name of feeding the god of economic growth (via the altar of hyper-consumption) in every country in the world.

A strong coalition of North American labor and environmental groups opposed NAFTA precisely because they knew it would drive down labor and environmental standards. For a time it even looked as if they would win.

Interestingly, Anderson says that when he presents his radical findings in climate circles, the core facts are rarely disputed. What he hears most often are confessions from colleagues that they have simply given up hope of meeting the 2 degree temperature target, precisely because reaching it would require such a profound challenge to economic growth. “This position is shared by many senior scientists and economists advising government,” Anderson reports.

And as hundreds of millions gain access to modern energy for the first time, those who are consuming far more energy than they need would have to consume less. How much less? Climate change deniers like to claim that environmentalists want to return us to the Stone Age. The truth is that if we want to live within ecological limits, we would need to return to a lifestyle similar to the one we had in the 1970s, before consumption levels went crazy in the 1980s.

The Our Hamburg–Our Grid coalition made a series of persuasive arguments in favor of taking back the utilities. A locally controlled energy system would be concerned with public interests, not profits. Residents would have greater democratic say in their energy system, they argued, rather than having the decisions that affect them made in distant boardrooms. And money earned in the sale of energy would be returned to the city, rather than lost to the shareholders of multinationals that had control over the grids at the time—a definite plus during a time of relentless public austerity.

Just as tobacco companies have been obliged to pay the costs of helping people to quit smoking, and BP has had to pay for much of the cleanup of its oil spill in the Gulf of Mexico, it is high time for the industry to at least split the bill for the climate crisis.

Phasing out fossil fuel subsidies globally would conservatively save governments a total $775 billion in a single year, according to a 2012 estimate by Oil Change International and the Natural Resources Defense Council.54

The lesson from all this is not that people won’t sacrifice in the face of the climate crisis. It’s that they have had it with our culture of lopsided sacrifice, in which individuals are asked to pay higher prices for supposedly green choices while large corporations dodge regulation and not only refuse to change their behavior, but charge ahead with ever more polluting activities.

Decentralized control over energy is also important for very practical reasons. There are plenty of examples of large-scale, privately owned renewable energy projects that fell apart because they were imposed from the outside without local input or profit sharing. Indeed, when communities are excluded in this way, there is a very good chance that they will rebel against the noise and “unsightliness” of wind turbines, or the threats—some real, some imagined—to wildlife and ecosystems posed by solar arrays. These objections are often dismissed as NIMBY-ism (Not in My Backyard) and are used as more evidence of humanity’s tendency toward selfishness and shortsightedness. But in several regions, these objections have been entirely neutralized with thoughtful planning.

We now have a few models to point to that demonstrate how to get far-reaching decentralized climate solutions off the ground with remarkable speed, while fighting poverty, hunger, and joblessness at the same time.

For that to happen, the German government would have to be willing to do to the coal industry what it has been willing to do to the nuclear power industry: introduce specific, top-down regulations to phase it out. Instead, because of the vast political power of the German coal lobby, the Merkel government has relied on the weak market mechanism of carbon trading, through the European emissions trading system, to try to put negative pressure on coal.

Tadzio Mueller, a Berlin-based researcher and climate expert, put the problem to me like this: “German emissions are not up because nuclear power is down. They’re up because nobody told the German power companies not to burn coal, and as long as they can profitably sell the electricity somewhere, they’ll burn the coal—even if most electricity consumed in Germany was renewable. What we need are strict rules against the extraction and burning of coal. Period.”

These investments won’t be recouped unless the companies that made them are able to keep extracting for decades, since the up-front costs are amortized over the life of the projects. Chevron’s Australia project is expected to keep producing natural gas for at least thirty years, while Shell’s floating gas monstrosity is built to function on that site for up to twenty-five years. Exxon’s Alberta mine is projected to operate for forty years, as is BP/Husky Energy’s enormous Sunrise project, also in the tar sands. This is only a small sampling of mega-investments taking place around the world in the frantic scramble for hard-to-extract oil, gas, and coal. The long time frames attached to all these projects tell us something critical about the assumptions under which the fossil fuel industry is working: it is betting that governments are not going to get serious about emissions cuts for the next twenty-five to forty years.

Every victory against the fossil fuel companies, no matter how hard won, will be temporary, just waiting to be overtaken with howls of “Drill, Baby, Drill.” It won’t be enough even when we can walk across the Gulf of Mexico on the oil rigs, or when Australia’s Great Barrier Reef is a parking lot for coal tankers, or when Greenland’s melting ice sheet is stained black from a spill we have no idea how to clean up. Because these companies will always need more reserves to top up their replacement ratios, year after year after year.

And the amounts of money at stake are huge. The total amount of carbon in reserve represents roughly $27 trillion—more than ten times the annual GDP of the United Kingdom. If we were serious about keeping warming below 2 degrees, approximately 80 percent of that would be useless, stranded assets. Given these stakes, it is no mystery why the fossil fuel companies fight furiously to block every piece of legislation that would point us in the right emissions direction, and why some directly fund the climate change denier movement.

Indeed the day the Copenhagen summit concluded—when the target was made official—the share prices of some of the largest fossil fuel companies hardly reacted at all.61 Clearly, intelligent investors had determined that the promises governments made in that forum were nothing to worry about—that they were not nearly as important as the actions of their powerful energy departments back home that grant mining and drilling permits.