This Changes Everything: Capitalism vs. The Climate

by Naomi Klein

As we have already seen, the latest research on renewable energy, most notably by Mark Jacobson’s team at Stanford, shows that a global transition to 100 percent renewable energy—“wind, water and solar”—is both technically and economically feasible “by as early as 2030.”

about 12 percent of the world’s power is currently supplied by nuclear energy, much of it coming from reactors that are old and

in April 2011, a new study by leading scientists at Cornell University showed that when gas is extracted through fracking, the emissions picture changes dramatically.45 The study found that methane emissions linked to fracked natural gas are at least 30 percent higher than the emissions linked to conventional gas. That’s because the fracking process is leaky—methane leaks at every stage of production, processing, storage, and distribution. And methane is an extraordinarily dangerous greenhouse gas, thirty-four times more effective at trapping heat than carbon dioxide, based on the latest Intergovernmental Panel on Climate Change estimates.

According to the Cornell study, this means that fracked gas has a greater greenhouse gas impact than oil and may well have as much of a warming impact as coal when the two energy sources are examined over an extended life

Furthermore, Cornell biogeochemist Robert Howarth, the lead author of the study, points out that methane is an even more efficient trapper of heat in the first ten to fifteen years after it is released—indeed it carries a warming potential that is eighty-six times greater than that of carbon dioxide.

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. And yet climate experts tell us that if we want to have a shot at keeping warming below 2 degrees Celsius, then developed country economies need to have begun their energy turnaround by the end of this decade and to be almost completely weaned from fossil fuels before 2050.52 If the companies have miscalculated and we do get serious about leaving carbon in the ground, these huge projects will become what is known as “stranded assets”—investments that lose their projected value as a result of, for example, dramatic changes in environmental policy. When a company has a great deal of expensive stranded assets on its books, the stock market takes notice, and responds by bidding down the share price of the company that made these bad bets.

At minimum, an energy company is expected to have as much oil and gas in its proven reserves as it does in current production, which would give it a “reserve-replacement ratio” of 100 percent. As the popular site Investopedia explains, “A company’s reserve replacement ratio must be at least 100% for the company to stay in business long-term; otherwise, it will eventually run out of oil.”53 Which is why investors tend to get quite alarmed when the ratio drops below that level.

According to the International Energy Agency’s annual World Energy Outlook report, global conventional oil production from “existing fields” will drop from 68 million barrels per day in 2012 to an expected 27 million in 2035.55 That means that an oil company looking to reassure shareholders that it has a plan for what to do, say, when the oil in Alaska’s Prudhoe Bay runs out, will be forced to go into higher-risk, dirtier territories. It is telling, for instance, that more than half of the reserves Exxon added in 2011 come from a single oil project: the massive Kearl mine being developed in the Alberta tar sands.56 This imperative also means that, so long as this business model is in place, no coastline or aquifer will be safe. 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.

In 2011, a think tank in London called the Carbon Tracker Initiative conducted a breakthrough study that added together the reserves claimed by all the fossil fuel companies, private and state-owned. It found that the oil, gas, and coal to which these players had already laid claim—deposits they have on their books and which were already making money for shareholders—represented 2,795 gigatons of carbon (a gigaton is 1 billion metric tons). That’s a very big problem because we know roughly how much carbon can be burned between now and 2050 and still leave us a solid chance (roughly 80 percent) of keeping warming below 2 degrees Celsius. According to one highly credible study, that amount of carbon is 565 gigatons between 2011 and 2049. And as Bill McKibben points out, “The thing to notice is, 2,795 is five times 565. It’s not even close.” He adds: “What those numbers mean is quite simple. This industry has announced, in filings to the SEC and in promises to shareholders, that they’re determined to burn five times more fossil fuel than the planet’s atmosphere can begin to

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.

It also helps that these companies are so profitable that they have money not just to burn, but to bribe—especially when that bribery is legal. In 2013 in the United States alone, the oil and gas industry spent just under $400,000 a day lobbying Congress and government officials, and the industry doled out a record $73 million in federal campaign and political donations during the 2012 election cycle, an 87 percent jump from the 2008 elections.

A 2012 report found that a single industry organization—the Canadian Association of Petroleum Producers—spoke with federal government officials 536 times between 2008 and 2012, while TransCanada, the company behind the Keystone XL pipeline, had 279 communications. The Climate Action Network, on the other hand, the country’s broadest coalition devoted to emission reductions, only logged six communications in the same period. In the U.K., the energy industry met with the Department of Energy and Climate Change roughly eleven times more frequently than green groups did during David Cameron’s first year in office. In fact, it has become increasingly difficult to discern where the oil and gas industry ends and the British government begins.

As The Guardian reported in 2011, “At least 50 employees of companies including EDF Energy, npower and Centrica have been placed within government to work on energy issues in the past four years. . . . The staff are provided free of charge and work within the departments for secondments of up to two

All of Nauru’s monetary wealth derived from an odd geological fact. For hundreds of thousands of years, when the island was nothing but a cluster of coral reefs protruding from the waves, Nauru was a popular pit stop for migrating birds, who dropped by to feast on the shellfish and mollusks. Gradually, the bird poop built up between the coral towers and spires, eventually hardening to form a rocky landmass. The rock was then covered over in topsoil and dense forest, creating a tropical oasis of coconut palms, tranquil beaches, and thatched huts so beatific that the first European visitors dubbed the island Pleasant

Nauru’s successive waves of colonizers—whose economic emissaries ground up the phosphate rock into fine dust, then shipped it on ocean liners to fertilize soil in Australia and New Zealand—had a simple plan for the country: they would keep mining phosphate until the island was an empty shell.

For a time in the late 1990s, Nauru was the titular “home” to roughly four hundred phantom banks that were utterly unencumbered by monitoring, oversight, taxes, and regulation. Nauru-registered shell banks were particularly popular among Russian gangsters, who reportedly laundered a staggering $70 billion of dirty money through the island nation (to put that in perspective, Nauru’s entire GDP is $72 million, according to most recent figures).

Giving the country partial credit for the collapse of the Russian economy, a New York Times Magazine piece in 2000 pronounced that “amid the recent proliferation of money-laundering centers that experts estimate has ballooned into a $5 trillion shadow economy, Nauru is Public Enemy #1.”

Sea levels around Nauru have been steadily climbing by about 5 millimeters per year since 1993, and much more could be on the way if current trends continue. Intensified droughts are already causing severe freshwater shortages.

For a couple of hundred years we have been telling ourselves that we can dig the midnight black remains of other life forms out of the bowels of the earth, burn them in massive quantities, and that the airborne particles and gases released into the atmosphere—because we can’t see them—will have no effect whatsoever. Or if they do, we humans, brilliant as we are, will just invent our way out of whatever mess we have made. And we tell ourselves all kinds of similarly implausible no-consequences stories all the time, about how we can ravage the world and suffer no adverse effects. Indeed we are always surprised when it works out otherwise. We extract and do not replenish and wonder why the fish have disappeared and the soil requires ever more “inputs” (like phosphate) to stay fertile. We occupy countries and arm their militias and then wonder why they hate us. We drive down wages, ship jobs overseas, destroy worker protections, hollow out local economies, then wonder why people can’t afford to shop as much as they used to. We offer those failed shoppers subprime mortgages instead of steady jobs and then wonder why no one foresaw that a system built on bad debts would collapse. At every stage our actions are marked by a lack of respect for the powers we are unleashing—a certainty, or at least a hope, that the nature we have turned to garbage, and the people we have treated like garbage, will not come back to haunt us.

The nation’s remoteness made it a convenient trash can—a place to turn the land into trash, to launder dirty money, to disappear unwanted people, and now a place that may be allowed to disappear altogether.21 This is our relationship to much that we cannot easily see and it is a big part of what makes carbon pollution such a stubborn problem: we can’t see it, so we don’t really believe it exists.

Extractivism is a nonreciprocal, dominance-based relationship with the earth, one purely of taking. It is the opposite of stewardship, which involves taking but also taking care that regeneration and future life continue. Extractivism is the mentality of the mountaintop remover and the old-growth clear-cutter. It is the reduction of life into objects for the use of others, giving them

no integrity or value of their own—turning living complex ecosystems into “natural resources,” mountains into “overburden” (as the mining industry terms the forests, rocks, and streams that get in the way of its bulldozers). It is also the reduction of human beings either into labor to be brutally extracted, pushed beyond limits, or, alternatively, into social burden, problems to be locked out at borders and locked away in prisons or reservations. In an extractivist economy, the interconnections among these various objectified components of life are ignored; the consequences of severing them are of no concern. Extractivism is also directly connected to the notion of sacrifice zones—places that, to their extractors, somehow don’t count and therefore can be poisoned, drained, or otherwise destroyed, for the supposed greater good of economic

progress. This toxic idea has always been intimately tied to imperialism, with disposable peripheries being harnessed to feed a glittering center, and it is bound up too with notions of racial superiority, because in order to have sacrifice zones, you need to have people and cul...

Extractivism ran rampant under colonialism because relating to the world as a frontier of conquest—rather than as home—fosters this particular brand of irresponsibility. The colonial mind nurtures the belief that there is always somewhere else to go to ...

“The transition from water to steam in the British cotton industry did not occur because water was scarce, less powerful, or more expensive than steam,” writes Swedish coal expert Andreas Malm. “To the contrary, steam gained supremacy in spite of water being abundant, at least as powerful, and

As Britain’s urban population ballooned, two factors tipped the balance in favor of the steam engine. The first was the new machine’s insulation from nature’s fluctuations: unlike water wheels, steam engines worked at the same rate all the time, so long as there was coal to feed them and the machinery

wasn’t broken. The flow rates of rivers were of no concern. Steam engines also worked anywhere, regardless of the geography, which meant that factory owners could shift production from more remote areas to cities like London, Manchester, and Lancaster, where there were gluts of willing industrial workers, making it far easier to fire troublemakers and put down strikes.

With their portable energy creator, the industrialists and colonists of the 1800s could now go wherever labor was cheapest and most exploitable, and wherever resources were most plentiful and valuable.

Little wonder then that the introduction of Watt’s steam engine coincided with explosive levels of growth in British manufacturing, such that in the eighty years between 1760 and 1840, the country went from importing 2.5 million pounds of raw cotton to importing 366 million pounds of raw cotton, a genuine revolution made possible by the potent and brutal combination of coal at home and slave labor abroad.

In Ecological Economics, Herman Daly and Joshua Farley point out that Adam Smith published The Wealth of Nations in 1776—the same year that Watt produced his first commercial steam engine. “It is no coincidence,” they write, “that the market economy and fossil fuel economy emerged at essentially the exact same time. . . . New technologies and vast amounts of fossil energy allowed unprecedented production of consumer goods. The need for new markets for these mass-produced consumer goods and new sources of raw material played a role in colonialism and the pursuit of empire. The market economy evolved as an efficient way of allocating such goods, and stimulating the production of even

And Watt certainly did that: his engine massively accelerated the Industrial Revolution and the steamships his engine made possible subsequently opened sub-Saharan Africa and India to colonial pillage. So while making Europe

richer, he also helped make many other parts of the world poorer, carbon-fueled inequalities that persist to this day. Indeed, coal was the black ink in which the story of modern capitalism was written.

But for those of us born and raised inside this system, though we may well see the dead-end flaw of its central logic, it can remain intensely difficult to see a way out. And how could it be otherwise? Post-Enlightenment Western culture does not offer a road map for how to live that

is not based on an extractivist, nonreciprocal relationship with nature. This is where the right-wing climate deniers have overstated their conspiracy theories about what a cosmic gift global warming is to the left. It is true, as I have outlined, that many climate responses reinforce progressive support for government intervention in the market, for greater equality, and for a more robust public sphere. But the deeper message carried by the ecological crisis—that humanity has to go a whole lot easier on the living systems that sustain us, acting regeneratively rather than extractively—is a profound challenge to large parts of the left as well as the right.

Because the fact is that those self-described socialist states devoured resources with as much enthusiasm as their capitalist counterparts, and spewed waste just as recklessly.

Authoritarian socialism and capitalism share strong tendencies toward centralizing (one in the hands of the state,

the other in the hands of corporations). They also both keep their respective systems going through ruthless expansion—whether through production for production’s sake, in the case of Soviet-era socialism, or consumption for consumption’s sake, in the case of consumer capitalism.

Since the election of Luiz Inácio Lula da Silva, and now under the leadership of his former chief of staff, Dilma Rousseff, Brazil has reduced its extreme poverty rate by 65 percent in a single decade, according to the government. More than thirty million people have been lifted out of poverty. After the election of Hugo Chávez, Venezuela slashed the percentage of the population living in extreme poverty by more than half—from 16.6 percent in 1999 to 7 percent in 2011, according to government statistics. College enrollment has doubled since 2004. Ecuador under Rafael Correa has dropped its poverty rates by 32 per cent, according to the World Bank. In Argentina, urban poverty plummeted from 54.7 percent in 2003 to 6.5 percent

in 2011, according to government data collected by the U.N.41 Bolivia’s record, under the presidency of Evo Morales, is also impressive. It has reduced the proportion of its population living in extreme poverty from 38 percent in 2005 to 21.6 percent in 2012, according to government figures.42 And unemployment rates have been cut in half. Most importantly, while other developing countries have used growth to create societies of big winners and big losers, Bolivia is actually succeeding in building a more equal society. Alicia Bárcena Ibarra, executive secretary of the U.N. Economic Commission for Latin America and the Caribbean, observes that in Bolivia “the gap between rich and poor has been hugely

Forced to choose between poverty and pollution, these governments are choosing pollution, but those should not be their only options.

The Nature Conservancy, I should stress, is the only green group (that I know of, at least) to actually sink its own

oil and gas wells. But it is far from the only group to have strong ties with the fossil fuel sector and other major polluters. For instance, Conservation International, The Nature Conservancy, and the Conservation Fund have all received money from Shell and BP, while American Electric Power, a traditional dirty-coal utility, has donated to the Conservation Fund and The Nature Conservancy. WWF (originally the World Wildlife Fund) has had a long relationship with Shell, and the World Resources Institute has what it describes as “a long-term, close strategic relationship with the Shell Foundation.” Conservation International has partnerships with Walmart, Monsanto, Australian-based mining and petroleum giant BHP Billiton (a major extractor of coal), as well as Shell, Chevron, ExxonMobil, Toyota, McDonald’s, and

BP (according to The Washington Post BP has channeled $2 million to Conservation International over the years).I And...

The relationships are also more structural than mere donations and partnerships. The Nature Conservancy counts BP America, Chevron, and Shell among the members of its Business Council and Jim Rogers, chairman of the board and former CEO of Duke Energy, one of the largest U.S. coal-burning utilities, sits on the organization’s board of directors (past board members include former CEOs of General Motors and American Electric Power).

There is yet another way in which some green groups have entangled their fates with the corporations at the heart of the climate crisis: by investing their own money with them. For instance, while

investigating The Nature Conservancy’s foray into oil and gas drilling, I was struck by a line item in its 2012 financial statements: $22.8 million of the organization’s endowment—one of the largest in the U.S.—was invested in “energy” companies (that figure has since gone up to $26.5 million). Energy, of course, means oil, gas, coal, and the like.II Curious, I soon discovered that most big conservation groups did not have policies prohibiting them from investing their endowments in fossil fuel companies.

The hypocrisy is staggering: these organizations raise mountains of cash every year on the promise that the funds will be spent on work that is preserving wildlife and attempting to prevent catastrophic global warming. And yet some have turned around and invested...

their reserves, that they intend to extract several times more carbon than the atmosphere can absorb with any degree of safety. It must be stated that these choices, made unilaterally by the top tier of leadership at the big green groups, do not represent the wishes or values of the millions of members who support them through donations or join genuinely community supported campaigns to clean up polluted rivers, protect beloved pieces of wilderness, or support renewables legislation. Indeed, ma...

There are, moreover, large parts of the green movement that have never engaged in these types of arrangements—they don’t have endowments to invest or they have clear policies prohibiting fossil fuel holdings, and some have equally clear

policies against taking donations from polluters. These groups, not coincidentally, tend also to be the ones with track records of going head-to-head with big oil and coal: Friends of the Earth and Greenpeace have been battling Shell’s and Chevron’s alleged complicity with horrific human rights abuses in the Niger Delta since the early 1990s (though Shell has agreed to pay out $15.5 million to settle a case involving these claims, it continues to deny wrongdoing, as does Chevron); Rainforest Action Network has been at the forefront of the international campaign against Chevron for the disaster left behind in the Ecuadorian Amazon; Food & Water Watch has helped secure big victories against fracking; 350.org helped launch the fossil fuel divestment movement and has been at the forefront of the national mobilization against the Keystone XL