This Changes Everything: Capitalism vs. The Climate

by Naomi Klein

From a climate perspective, the WTO ruling was an outrage: if there is to be any hope of meeting the agreed-upon 2 degree Celsius target, wealthy economies like Canada must make getting off fossil fuels their top priority. It is a moral duty, one that the federal government undertook when it signed the Kyoto Protocol in 1997. Ontario was putting real policies in place to honor that commitment (unlike the Canadian government as a whole, which has allowed emissions to balloon, leading it to withdraw from the Kyoto Protocol rather than face international censure). Most importantly, the program was working. How absurd, then, for the WTO to interfere with that success—to let trade trump the planet itself.

And yet from a strictly legal standpoint, Japan and the EU were perfectly correct. 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.” This was a flashpoint in the free trade wars back in the 1990s, precisely because these restrictions effectively prevent governments from doing what Ontario was trying to do: create jobs by requiring the sourcing of local goods as a condition of government support.

Not only do fossil fuel companies receive $775 billion to $1 trillion in annual global subsidies, but they pay nothing for the privilege of treating our shared atmosphere as a free waste dump—a fact that has been described by the Stern Review on the Economics of Climate Change as “the greatest market failure the world has ever seen.” That freebie is the real distortion, that theft of the sky the real subsidy.

In order to cope with these distortions (which the WTO has made no attempt to correct), governments need to take a range of aggressive steps—from price guarantees to straight subsidies—so that green energy has a fair shot at competing. We know from experience that this works: 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).

As Scott Sinclair of the Canadian Centre for Policy Alternatives has pointed out, “many of the policies Denmark used to launch its renewable energy industry would have been inconsistent with . . . international trade and investment agreements,” since favoring “locally owned cooperatives would conflict with non-discrimination rules requiring that foreign companies be treated no less favourably than domestic suppliers.”

Indeed the three policy pillars of the neoliberal age—privatization of the public sphere, deregulation of the corporate sector, and the lowering of income and corporate taxes, paid for with cuts to public spending—are each incompatible with many of the actions we must take to bring our emissions to safe levels.

In many pagan societies, the earth was seen as a mother, a fertile giver of life. Nature—the soil, forest, sea—was endowed with divinity, and mortals were subordinate to it. The Judeo-Christian tradition introduced a radically different concept. The earth was the creation of a monotheistic God, who, after shaping it, ordered its inhabitants, in the words of Genesis: “Be fruitful and multiply, and replenish the earth and subdue it: and have dominion over the fish of the sea and over the fowl of the air and over every living thing that moveth upon the earth.” The idea of dominion could be interpreted as an invitation to use nature as a convenience.

Within a decade, all that would be left standing would be their own extreme, pro-corporate ideology. Not only would the Western consumer lifestyle survive intact, it would grow significantly more lavish, with U.S. credit card debt per household increasing fourfold between 1980 and 2010.27 Simultaneously, that voracious lifestyle would be exported to the middle and upper classes in every corner of the globe—including, despite earlier protestations, India, where it would wreak environmental damage on a scale difficult to fathom.

that the climate negotiators formally declared their subservience to the trading system from the start. When the U.N. climate agreement was signed at the Rio Earth Summit in 1992, it made clear that “measures taken to combat climate change, including unilateral ones, should not constitute . . . a disguised restriction on international trade.” (Similar language appears in the Kyoto Protocol.)

And fatefully, countries are responsible only for the pollution they create inside their own borders—not for the pollution produced in the manufacturing of goods that are shipped to their shores; those are attributed to the countries where the goods were produced.34 This means that the emissions that went into producing, say, the television in my living room, appear nowhere on Canada’s emissions ledger, but rather are attributed entirely to China’s ledger, because that is where the set was made.

This deeply flawed system has created a vastly distorted picture of the drivers of global emissions. It has allowed rapidly de-industrializing wealthy states to claim that their emissions have stabilized or even gone down when, in fact, the emissions embedded in their consumption have soared during the free trade era. For instance, in 2011, the Proceedings of the National Academy of Sciences published a study of the emissions from industrialized countries that signed the Kyoto Protocol. It found that while their emissions had stopped growing, that was partly because international trade had allowed these countries to move their dirty production overseas. The researchers concluded that the rise in emissions from goods produced in developing countries but consumed in industrialized ones was six times greater than the emissions savings of industrialized countries.

before the neoliberal era, emissions growth had been slowing, from 4.5 percent annual increases in the 1960s to about 1 percent a year in the 1990s. But the new millennium was a watershed: between 2000 and 2008, the growth rate reached 3.4 percent a year, shooting past the highest IPCC projections of the day. In 2009, it dipped due to the financial crisis, but made up for lost time with the historic 5.9 percent increase in 2010 that left climate watchers reeling. (In mid-2014, two decades after the creation of the WTO, the IPCC finally acknowledged the reality of globalization and noted in its Fifth Assessment Report, “A growing share of total anthropogenic CO2 emissions is released in the manufacture of products that are traded across international borders.”)

In many cases (though not China’s), the conditions attached to loans from the International Monetary Fund and World Bank were a major factor, so was the economic orthodoxy imparted to elite students at schools like Harvard and the University of Chicago. All of these and other factors played a role in shaping what was (never ironically) referred to as the Washington Consensus. Underneath it all is the constant drive for endless economic growth, a drive that, as will be explored later on, goes much deeper than the trade history of the past few decades. But there is no question that the trade architecture and the economic ideology embedded within it played a central role in sending emissions into hyperdrive.

A free trader’s dream, in other words—and a climate nightmare. A nightmare because there is a close correlation between low wages and high emissions, or as Malm puts it, “a causal link between the quest for cheap and disciplined labor power and rising CO2 emissions.” And why wouldn’t there be? 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. So when the factories moved to China, they also got markedly dirtier.

A destabilized climate is the cost of deregulated, global capitalism, its unintended, yet unavoidable consequence.

The victims in all this are regular people: the workers who lose their factory jobs in Juárez and Windsor; the workers who get the factory jobs in Shenzhen and Dhaka, jobs that are by this point so degraded that some employers install nets along the perimeters of roofs to catch employees when they jump, or where safety codes are so lax that workers are killed in the hundreds when buildings collapse. The victims are also the toddlers mouthing lead-laden toys; the Walmart employee expected to work over the Thanksgiving holiday only to be trampled by a stampede of frenzied customers, while still not earning a living wage. And the Chinese villagers whose water is contaminated by one of those coal plants we use as our excuse for inaction, as well as the middle class of Beijing and Shanghai whose kids are forced to play inside because the air is so

Standing by the president’s side was his vice president, Al Gore, who had been largely responsible for getting so many Big Green groups on board. Given this history, it should hardly come as a surprise that the mainstream environmental movement has been in no rush to draw attention to the disastrous climate impacts of the free trade era. To do so would only highlight their own active role in helping the U.S. government to, in Clinton’s words, “remake the world.” Much better, as we will see later on, to talk about light bulbs and fuel efficiency.

It is Kevin Anderson of the Tyndall Centre for Climate Change Research, and one of Britain’s top climate experts, who has most forcefully built the case that our growth-based economic logic is now in fundamental conflict with atmospheric limits. Addressing everyone from the U.K. Department for International Development to the Manchester City Council, Anderson has spent more than a decade patiently translating the implications of the latest climate science to politicians, economists, and campaigners. In clear and understandable language, the spiky-haired former mechanical engineer (who used to work in the petrochemical sector) lays out a rigorous road map for cutting our emissions down to a level that provides a decent shot at keeping global temperature rise below 2 degrees Celsius. But in recent years Anderson’s papers and slide shows have become more alarming. Under titles such as “Climate Change: Going Beyond Dangerous . . . Brutal Numbers and Tenuous Hope,” he points out that the chances of staying within anything like safe temperature levels are diminishing fast. With his colleague Alice Bows-Larkin, an atmospheric physicist and climate change mitigation expert at the Tyndall Centre, Anderson argues that we have lost so much time to political stalling and weak climate policies—all while emissions ballooned—that we are now facing cuts so drastic that they challenge the core expansionist logic at the heart of our economic system.47 They argue that, if the governments of ...

Even Yvo de Boer, who held the U.N.’s top climate position until 2009, remarked recently that “the only way” negotiators “can achieve a 2-degree goal is to shut down the whole global economy.”48

Now, I realize that this can all sound apocalyptic—as if reducing emissions requires economic crises that result in mass suffering. But that seems so only because we have an economic system that fetishizes GDP growth above all else, regardless of the human or ecological consequences, while failing to place value on those things that most of us cherish above all—a decent standard of living, a measure of future security, and our relationships with one another.

according to projections from the International Energy Agency, investment levels in clean energy need to quadruple by 2030 if we are to meet emission targets aimed at staying below 2 degrees Celsius of

It’s easy to mistake a thriving private market in green energy for a credible climate action plan, but, though related, they are not the same thing. It’s entirely possible to have a booming market in renewables, with a whole new generation of solar and wind entrepreneurs growing very wealthy—and for our countries to still fall far short of lowering emissions in line with science in the brief time we have left.

The word “apocalypse” derives from the Greek apokalypsis, which means “something uncovered” or revealed.

During good times, it’s easy to deride “big government” and talk about the inevitability of cutbacks. But during disasters, most everyone loses their free market religion and wants to know that their government has their backs. And if there is one thing we can be sure of, it’s that extreme weather events like Superstorm Sandy, Typhoon Haiyan in the Philippines, and the British floods—disasters that, combined, pummeled coastlines beyond recognition, ravaged millions of homes, and killed many thousands—are going to keep coming.

Over the course of the 1970s, there were 660 reported disasters around the world, including droughts, floods, extreme temperature events, wildfires, and storms. In the 2000s, there were 3,322—a fivefold boost. That is a staggering increase in just over thirty years, and clearly global warming cannot be said to have “caused” all of it. But the climate signal is also clear. “There’s no question that climate change has increased the frequency of certain types of extreme weather events,” climate scientist Michael Mann told me in an interview, “including drought, intense hurricanes, and super typhoons, the frequency and intensity and duration of heat waves, and potentially other types of extreme weather though the details are still being debated within the scientific community.”

with policymakers still locked in the vise grip of austerity logic, these rising emergency expenditures are being offset with cuts to everyday public spending, which will make societies even more vulnerable during the next disaster—a classic vicious cycle.

These types of improvements are of course in far greater demand in developing countries like the Philippines, Kenya, and Bangladesh that are already facing some of the most severe climate impacts. Hundreds of billions of dollars are urgently needed to build seawalls; storage and distribution networks for food, water, and medicine; early warning systems and shelters for hurricanes, cyclones, and tsunamis—as well as public health systems able to cope with increases in climate-related diseases like

Though mechanisms to protect against government corruption are needed, these countries should not have to spend their health care and education budgets on costly disaster insurance plans purchased from transnational corporations, as is happening right now.

Their people should be receiving direct compensation from the countries (and companies) most respon...

But according to a study by the Center for American Progress, just 4 percent of the Big Five’s $100 billion in combined profits in 2008 went to “renewable and alternative energy ventures.” Instead, they continue to pour their profits into shareholder pockets, outrageous executive pay (Exxon CEO Rex Tillerson makes more than $100,000 a day), and new technologies designed to extract even dirtier and more dangerous fossil

And even as the demand for renewables increases, the percentage the fossil fuel companies spend on them keeps shrinking—by 2011, most of the majors were spending less than 1 percent of their overall expenditures on alternative energy, with Chevron and Shell spending a deeply unimpressive 2.5 percent. In 2014, Chevron pulled back even further. According to Bloomberg Businessweek, the staff of a renewables division that had almost doubled its target profits was told “that funding for the effort would dry up” and was urged “to find jobs elsewhere.” Chevron also moved to sell off businesses that had developed green projects for governments and school districts. As oil industry watcher Antonia Juhasz has observed, “You wouldn’t know it from their advertising, but the world’s major oil companies have either entirely divested from alternative energy or significantly reduced their investments in favor of doubling down on ever-more risky and destructive sources of oil and natural gas.”

Moreover, there is a simple, direct correlation between wealth and emissions—more money generally means more flying, driving, boating, and powering of multiple homes. One case study of German consumers indicates that the travel habits of the most affluent class have an impact on climate 250 percent greater than that of their lowest-earning neighbors.

According to Stephen Pacala, director of the Princeton Environmental Institute and codirector of Princeton’s Carbon Mitigation Initiative, the roughly 500 million richest of us on the planet are responsible for about half of all global emissions. That would include the rich in every country in the world, notably in countries like China and India, as well significant parts of the middle classes in North America and Europe.II, 48

Consider the following list, by no means complete: • A “low-rate” financial transaction tax—which would hit trades of stocks, derivatives, and other financial instruments—could bring in nearly $650 billion at the global level each year, according to a 2011 resolution of the European Parliament (and it would have the added bonus of slowing down financial speculation).49 • Closing tax havens would yield another windfall. The U.K.-based Tax Justice Network estimates that in 2010, the private financial wealth of individuals stowed unreported in tax havens around the globe was somewhere between $21 trillion and $32 trillion. If that money were brought into the light and its earnings taxed at a 30 percent rate, it would yield at least $190 billion in income tax revenue each year.50 • A 1 percent “billionaire’s tax,” floated by the U.N., could raise $46 billion annually.51 • Slashing the military budgets of each of the top ten military spenders by 25 percent could free up another $325 billion, using 2012 numbers reported by the Stockholm International Peace Research Institute. (Granted, probably the toughest sell of all, particularly in the U.S.)52 • A $50 tax per metric ton of CO2 emitted in developed countries would raise an estimated $450 billion annually, while a more modest $25 carbon tax would still yield $250 billion per year, according to a 2011 report by the World Bank, the International Monetary Fund, and the Organisation for Economic Co-operation and Development (OECD)...

the current global system in which eighty-five people control as much wealth as half the world’s population,

What stopped Obama from seizing his historical moment to stabilize the economy and the climate at the same time was not lack of resources, or a lack of power. He had plenty of both. What stopped him was the invisible confinement of a powerful ideology that had convinced him—as it has convinced virtually all of his political counterparts—that there is something wrong with telling large corporations how to run their businesses even when they are running them into the ground, and that there is something sinister, indeed vaguely communist, about having a plan to build the kind of economy we need, even in the face of an existential crisis.

Obama, obviously, does not share this extreme vision: as his health care and other social policies suggest, he believes government should nudge business in the right direction. And yet he is still sufficiently a product of his anti-planning era that when he had the banks, the auto companies, and the stimulus in his hands, he saw them as burdens to be rid of as soon as possible, rather than as a rare chance to build an exciting new future.

What we know is this: trade unions can be counted on to fiercely protect jobs, however dirty, if these are the only jobs on offer. On the other hand, when workers in dirty sectors are offered good jobs in clean sectors (like the former autoworkers at the Silfab factory in Toronto), and are enlisted as active participants in a green transition, then progress can happen at lightning speed.

And we know that investments in public transit pay off: a 2011 study by research and policy organization Smart Growth America found they create 31 percent more jobs per dollar than investment in new road and bridge construction. Investing in the maintenance and repair of roads and bridges creates 16 percent more jobs per dollar than investment in new

road and bridge construction.9 All of which means that making existing transportation infrastructure work better for more people is a smarter investment from both a climate and an economic perspective than covering more land with asphalt.

Renewable energy is equally promising, in part because it creates more jobs per unit of energy delivered than fossil fuels. In 2012, the International Labour Organization estimated that about five million jobs had already been created in the sector worldwide—and that is with only the most scattershot and inadequate levels of government commitment to emission reduction.10 If industrial policy were brought in line with climate science, the supply of energy through wind, ...

every country—in manufacturing, construction, installation, mainte...

Similar research in Canada has found that an investment of $1.3 billion (the amount the Canadian government spends on subsidies to oil and gas companies) could create seventeen to twenty thousand jobs in renewable energy, public transit, or energy efficiency—six to eight times as many jobs as that money generates in the oil and gas sector. And according to a 2011 report for the European Transport Workers Federation, comprehensive policies to reduce emissions in the transport sector by 80 percent would create seven millio...

These are not, however, the kinds of jobs that the market will create on its own. They will be created on this scale only by thoughtful policy and planning. And in some cases, having the tools to make those plans will require citizens doing what the residents of so many German cities and towns have done: taking back control over electricity generation so that the switch to renewables can be made without delay, while any profits generated go not to shareholders but

back into supporting hungry public services.

roughly half of Germany’s renewable energy facilities are in the hands of farmers, citizen groups, and almost nine hundred energy cooperatives. Not only are they generating power but they also have the chance to generate revenue for their communities by selling back to the grid. Over all, there are now 1.4 million photovoltaic installations and about 25,000 windmills. Nearly 400,000 jobs have been created.

Germany’s program mirrors one implemented in Denmark in the 1970s and 1980s, which helped switch more than 40 percent of the country’s electricity consumption to renewables, mostly wind. Up to around 2000, roughly 85 percent of Danish wind turbines were owned by small players like farmers and co-ops.

years, this remains a striking commonality between Denmark and Germany: it’s neither big nationally owned monopolies nor large corporate-owned wind and solar operators that have the best track record for spurring renewable energy turnarounds—it’s communities, co-ops, and farmers, working within the context of an ambitious, well-designed national

These examples make clear that when governments are willing to introduce bold programs and put goals other than profit making at the forefront of their policymaking, change can happen with astonishing speed.

Hunger isn’t about the amount of food around—it’s about being able to afford and control that food. After all, the U.S. has more food than it knows what to do with, and still 50 million people are food