Environment

Too Much Stuff: Capitalism in Crisis As Evidence of Global Warming Grows

For the Paris Agreement to be meaningful, shortsighted self-interest must give way to pro-environment investments.

Asian business woman walking to the open wooden door with green environment leaving modern city
Photo Credit: leolintang/Shutterstock

The following excerpt is reprinted with permission from Too Much Stuff: Capitalism in Crisis by Kozo Yamamura, published by Policy Press at the University of Bristol. © 2017 by Policy Press at the University of Bristol. All rights reserved.

The urgency of the need to increase investment to prevent further degradation of the environment was brought home to me on a visit to Switzerland. In July 2006, my wife and I were staying at a hotel in Grindelwald, an alpine village southwest of Bern and located under the famous North Face of the Eiger and its glacier. Our hotel was approximately three kilometers across the valley from the mountain.

One morning, shortly after dawn, we were awoken by thunderous noises coming from the direction of the Eiger. Startled, we looked toward the mountain and saw a huge, grey dust cloud rising high into the sky from the edge of the mountain next to the glacier’s path. Tons of rock, including gigantic boulders, along with an immense quantity of gravel and dirt, were cascading down toward the river valley. In no time, the dust cloud drifted over the village, obscuring the houses. The noise and the avalanche of rocks and dirt gradually stopped and, as the dust cloud dissipated, we could see that a stalagmite-like rock column as high as the Empire State building that once stood at the edge of Eiger was gone forever.

By the end of the day, we learned that the accelerating pace of melting of the glacier, which had supported the eastern flank of the mountain, was the cause of the huge rockslides that had been occurring every few years since the 1990s. As the ice retreated, the side of the mountain was crumbling. Estimates of the amount of rock, gravel and dirt that had fallen into the valley varied, but the lowest were several hundred thousand cubic meters. The melting of the same glacier had caused a lake to form under the ice, necessitating the expenditure of millions of francs in subsequent years to drain the lake in order to prevent it from bursting and inundating the valley and the village.

Average temperatures in Switzerland have been rising by more than half a degree Celsius on average every decade since 1970, resulting in an 18 percent loss of the surface of glaciers between 1985 and 2000. For us, it was a case of “seeing is believing.” With our own eyes we had seen that the climate was warming dangerously and the world now faced a crisis unprecedented in recorded history.

Given my experience, I readily understood the message of Kenneth Chang’s article “The Big Melt Accelerates,” which appeared in the New York Times on May 19, 2014.

Centuries from now, a large swath of the West Antarctic ice sheet is likely to be gone, its hundreds of trillions of tons of ice melted, causing a four-foot rise in already swollen seas. Scientists reported last week that the scenario may be inevitable, with new research concluding that some giant glaciers had passed the tipping point of no return, possibly setting off a chain reaction that could doom the rest of the ice sheet. For many, the research signaled that changes in the earth’s climate have already reached a tipping point, even if global warming halted immediately.

Nothing but a major global effort

An environmental catastrophe cannot be averted if a major international effort is not begun immediately. This is the conclusion reported in the 6,000-pages-long, the Fifth Assessment Report of the IPCC (Intergovernmental Panel on Climate Change of the UN), compiled by 800 of the world’s top scientists and other experts and published in 2014. In order to avoid a 2°C increase in temperature – the level above which catastrophic damage will occur—global emissions must be reduced to half their current level by 2050. Unless all countries make a strong commitment to reduce carbon emissions immediately, the world’s environment will pass the tipping point and suffer the irredeemable consequences of doing too little too late.

If no major global effort to reduce carbon emissions is made in the very near future, at least 177 million people—mostly in Asia (about 50 million of them in China) – will experience frequent floods by the end of this century. This is in addition to the large number of people living in low-lying countries and in island nations, such as the Netherlands, Bangladesh and the Maldives, which are already seeing increasingly frequent flooding. But flooding is occurring in other countries as well, such as in the UK and along the Mississippi River in the US.

Flooding not only endangers lives but also has very high economic costs. For example, a group of Harvard scholars estimated that “rising seas could put American property worth 66 to 106 billion dollars literally under water by 2050” and noted that “If the numbers are any guide, the real damage would be greater still.” And, as an increasing number of news reports make us aware, droughts have been becoming longer and more severe worldwide in recent decades. These droughts are imposing an increasing economic cost and endangering the lives of more and more people because they reduce the water available for drinking, agriculture and many other uses and increase the frequency of large-scale forest fires.

Noting these developments, Antonio Guterres, the former UN High Commissioner of Refugees, stressed that all the world’s countries in must be concerned with “the case of entire populations forced to migrate due to the lack of access to clean water, productive land or the occurrence of natural disasters.” He went on to say:

Climate change further exacerbates this issue through drought and desertification, two of the major factors contributing to food insecurity because they render land unsuitable for agriculture. Without productive lands, farmers cannot grow crops and are forced to leave their land plots in search of more fertile territories, which often cross national boundaries. Currently, over 1.5 billion people depend on degrading land and more than 1 billion are experiencing droughts. Climate change will exacerbate these issues, and most likely increase the number of environmental refugees, presently surpassing 36 million worldwide.

Despite Guterres’ assessment and the data and findings of the IPCC, the developed economies continue to do far less than is necessary to try to avert a catastrophe. To be sure, many governments have adopted numerous policies because those who are working towards doing more to sustain the environment have won some victories in policymaking arenas and in the courts. A good example is the US Supreme Court case in which in June 2014 the Environmental Protection Agency won the right to regulate greenhouse gases emitted by modified utility plants. However, the victory, won on a 7 to 2 decision, was restrained in that, in a separate 5 to 4 vote, the Court rejected the Agency’s broad assertion of regulatory power under one section of the Clean Air Act.

As the continuing climate warming demonstrates, such victories in the developed economies have been too few to reverse the tide, despite the fact that in the battle against the looming environmental tipping point the developed economies must take a lion’s share of the responsibility. This is because today’s developed economies are the economies that have been emitting greenhouse gases and polluting the air since they began to industrialize, as the following quotation reminds us.

A London fog is brown, reddish-yellow, or greenish, darkens more than a white fog, has a smoky, or sulfurous smell, is often somewhat dryer than a country fog, and produces, when thick, a choking sensation. Instead of diminishing while the sun rises higher, it often increases in density, and some of the most lowering London fogs occur about midday or late in the afternoon. Sometimes the brown masses rise and interpose a thick curtain at a considerable elevation between earth and sky. A white cloth spread out on the ground rapidly turns dirty, and particles of soot attach themselves to every exposed object.

Carbon dioxide (CO2) emissions per person measured in tons in 2012 were: 16.4 for the US; 10.4 for Japan; 9.7 for Germany; 7.7 for the UK; 7.1 for China; and 1.6 for India, according to estimates made in 2013 by the European Commission. In short, the developed economies are responsible for the environmental crisis we are facing today.

Effective policies on emissions

Although developing economies such as China and India that have now become major emitters of greenhouse gases must do their best to limit their emissions, the fact remains that the developed economies must do what is necessary to prevent the looming environmental tipping point. The critical question is this: why haven’t policies sufficient to reduce and reverse the trend of environmental degradation, especially the critical emission of carbon dioxide, already been adopted by the developed economies?

The answer is that many politicians, business leaders and voters believe their political power, their profits or their incomes would be negatively affected by more robust environmental policies. Their shortsightedness is preventing the adoption of the policies that are necessary to prevent the coming of the tipping point within the next few decades. What has created this regrettable outcome is the strength of misguided arguments such as the following:

  1. None of the results of scientific research to date has convincingly demonstrated that human actions have been responsible for climate warming and other environment degradation. Rather, this is a natural phenomenon out of our control. Thus there is little reason to allocate more resources to protect the environment, at the cost of economic growth.
  2. Scientific studies presumably showing the urgency of the need to do more to protect the environment are an elaborate hoax put forth by the liberals. Whatever the scientific findings, doing more to protect the environment means more government involvement. This would reduce the efficient working of capitalism, which is indispensable for economic growth.
  3. Since the developing economies, such as China and India, are causing environmental problems at such a rapid pace and of such huge magnitude, there is no reason for the developed economies to do more, to the detriment of their own economic performance.

Argument 1 is feigned skepticism or ignorant anti-scientism, put forth despite overwhelming scientific evidence to the contrary. This is the same brazen deception as was used at a US Congressional hearing in April of 1994 by the seven CEOs of the largest American cigarette firms when they all denied that nicotine is addictive.

Argument 2 is no more than a desperate ruse motivated by ideology and/or political or financial gain. The “efficient working of capitalism” is a fig-leaf to conceal shortsighted self-interest.

Argument 3 is ludicrous because the developed economies, which polluted and degraded the environment freely from the time they began to industrialize until only several decades ago, are still the major emitters of pollution. This argument also ignores the fact that today the per capita consumption of energy from fossil fuel and other sources and the consequent emissions per capita in the developed economies are at least 10 to 100 times greater than the energy consumption and emissions output in all of the emerging economies.

The IPCC’s Fifth Assessment Report and the  Paris Agreement of 2015

In 2014 the Fifth Assessment Report of the IPCC, cited above, reported that the reductions in emissions that were necessary to avert the environmental tipping point would require huge investments. The Assessment describes the mitigation scenarios needed to make improvements in the technology of energy production from fossil fuels and renewables in order to stabilize atmospheric greenhouse gas concentrations in the range of 430–530 ppm CO2eq (parts per million, CO2 equivalent) by 2100. They would require an additional annual global investment of about $177 billion through 2029. Further, the annual incremental investment necessary globally to improve energy-use efficiency (involving the modernization of existing equipment and infrastructures) must increase by about $336 billion per year, also until 2029. The total comes to $513 billion per annum over a 15-year period, on top of the annual investments that the developed economies have been making during recent years.

A very large proportion of this additional annual investment of $513 billion must be made collectively by the developed economies. If their existing capitalist system remains unchanged and they continue to follow their current fiscal and monetary policies, they will not be able to make the investment necessary to avert the environmental tipping point and at the same time create the increased demand that will enable their economies to grow.

A meeting to discuss the global environmental crisis was held by the United Nations in Paris from November 20 to December 11, 2015 and was attended by the political leaders and scientists of 196 countries. Its purpose was essentially to adopt the recommendations of the Fifth Assessment Report of the IPCC. Most news reports called this a major victory in our efforts to prevent further degradation of the environment. However, as was expected, the outcome was in fact only another victory in a skirmish, and the war is far from won. This is evident in the principal agreement reached. Each country has promised to reduce its greenhouse gas emissions in order to prevent a global temperature rise by 2°C (possibly 1.5°C), but the agreement is to be implemented on the “honor” system, with no international enforcement. The developed economies are to provide at least $100 billion per year, starting in 2020, to aid the developing economies in their efforts to reduce emissions. And the agreement is to be effective only if 55 countries, or the countries emitting 55 percent of the total emissions, ratify the agreement.

Unfortunately, there are numerous reasons why the Paris Agreement is only a victory in a skirmish, one that is certain to be followed by many more skirmishes. The “pledged” contributions towards the $100 billion to be paid by the developed economies include a contribution from the US of at least $10 billion annually. That this pledge will be honored is highly problematic because it is very likely that the Republican Party, whose leaders have already voiced strong opposition to the Agreement, will continue to control the House of Representatives. To be sure, more and more American voters have become highly concerned about the sustainability of their environment. But to believe that the US Congress will ratify the Agreement and continue to provide at least $10 billion per year over the coming decades is simply not realistic. And this is not the situation just in the US. It would be naïve to believe that all the other developed economies will be able to honor their pledges over the coming years.

Conclusion

For those of us who are very concerned about the future of our environment, the Paris Agreement is another triumph in the ongoing political skirmishes. However, in order to the triumph meaningful, we must first change the existing capitalist system, because that is the only way to put an end to ineffective pro-investment policies and to reinvigorate our economies by increasing investments to meet societal needs. And the most important societal need of all is to increase investments to avert further degradation of the environment.

Kozo Yamamura (1934-2017) was the Job and Gertrude Tamaki Professor of Japanese Studies and professor of economics at the University of Washington. He authored twenty-five books, many focused on the Japanese economy and economic history, as well as several on comparative economic institutions and policy.

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