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It may indeed be cheaper to save the world

Climate 2024-04-22, 12:42am


Sudhirendar Sharma

Sudhirendar Sharma

Have capitalists woken up to both the cost of inaction and the opportunity of action? 

Modern economic growth and rising demand for goods at relatively lower prices has led to inevitable exploitation of nature, and consequent climate change. There is no denying that unfettered capitalism has contributed to over extraction of natural resources and increasing emission of greenhouse gases. Should uncontrolled capitalism persist till 2050, the aim of restricting average global temperature within 1.5 °C above pre-industrial levels may remain a pipe dream. Emitting billions of tons of carbon dioxide will see continued climate extremes leading to the loss of lives and livelihoods. No wonder, climate emergencies have become frequent.  

Many environmentalists believe that the long-term solution to tackling climate crises is to uproot capitalism because ‘we cannot solve the problem by what caused it’. It is argued that tackling the climate crises without replacing an economic system that is partially responsible for the excess greenhouse gases stuck in the atmosphere may remain elusive. General consensus is that without ensuring nature’s well-being, human well-being is unlikely to be achieved. However, with only few decades at hand in averting catastrophic climate change, the possibility of putting a new economic system in place may seem improbable. 

Despite capitalism being well entrenched, reforming capitalism seems the only practical way to avoid the system from collapsing. Passionate capitalists fear that policy reforms may kill the market. But policy shifts in favor of climate-oriented technologies and investments have created new business opportunities. Whether such efforts add up to make an impact at global scale has yet to be fully ascertained. Some trends are noticeable, the UK economy grew by 60 percent between 1990 and 2017 while its carbon emissions declined by 40 percent. The task lies in replicating and escalating such transformative processes and practices. Although climate financing may have been slow, the Paris Agreement has triggered a process of change. 

Climate Capitalism is about how to transform world’s dominant economic system while ensuring that the wheels of progress don’t come to a halt. From renewable power to green cement, from electric cars to carbon capture – emission-reducing technologies have tossed new opportunities for private capital and government regulations to work in tandem. The process to harness the forces of capitalism to achieve zero emissions has already begun. Although these are still early days for capitalism to wear a natural look for addressing impending climatic concerns, a faint ray of optimism seems to have been generated. 

It has been over two decades that industrial capitalism has been critiqued for neither pricing nor accounting its negative externalities. It liquidates natural capital and calls it profit, undervaluing both natural resources and living systems. Akshat Rathi chronicles the political maneuverings that made possible China’s lead in building fleet of electric cars, India’s success in promoting solar power, America’s success with reversing climate damages in the oil industry, and the Danish quest for pushing wind turbines. All such initiatives combined; it has been estimated that 2% of global GDP is enough to make the carbon dioxide problem go away! Far from being linear, however, there are disruptive elements that play upon power politics to brittle the path to zero emissions. Politics, technology and finance would need to align in the right direction. 

With climate emergencies threatening life, public perception on the global climatic accords and green initiatives remains grossly skeptical. Holding an optimist position, Akshit argues that we cannot insulate ourselves from the transformation - from fossil fuels to clean energy – coming our way. From the bureaucrats to the billionaires, and from the doers to the enforcers, there are multiple actors on the capitalist platform who would need to merge differences in reforming the economic system towards shaping a climate-conducive capitalism.

Climate Capitalism conveys optimistic narrative which contends that it’s cheaper to save the world than destroy it. It goes without saying that the time for uncontrolled capitalism is long over. What kindles a ray of hope is that capitalists themselves have woken up to both the cost of inaction and the opportunity of action. 

Climate Capitalism 

by Akshat Rathi

John Murray/Hachette, London

Extent: 260, Price: Rs. 699.

(Dr. Sudhirendar Sharma is a writer and researcher specializing in development issues. He is based in New Delhi, India.)

First published in The Hindu on April 19, 2024.