The Intergovernmental Panel on Climate Change (IPCC) is an international coalition composed of the world’s top scientists and climatologists. The panel conducts regular assessments on the state of climate knowledge, forecasts future changes and offers emission reduction policy recommendations to the U.N. The panel’s most recent findings have indicated that if the planet were to warm by more than two degrees Celsius above pre-industrial levels, we would experience a plethora of disastrous environmental consequences. The sea would rise by a meter or more, swallowing up coastal and low-lying island populations. Intense wildfires would rage around the world, consuming large swaths of the planet’s remaining forests. Some regions would experience heavy rain and flooding, while others would suffer protracted periods of severe drought. Extreme weather events, such as tornadoes and hurricanes, would become more common. Essentially, if we don’t curb our carbon emissions ASAP, we’re going to usher in a new era of climatic chaos that might not be hospitable to life as we know it.
According to the IPCC assessment, if we continue on our current emissions trajectory we will exceed the two degree tipping point in 30 years or less. In my opinion, the climatic creature we’ve conjured up can’t be placated. It’s too late to put the genie back in the bottle, and we’re just going to have to adapt to the dangerous and unfamiliar new climate we’ve collectively created. Yet, thankfully, there are optimists in this world who think we still have a shot at mitigating and perhaps even halting global warming. We can all hope that one of those naively positive thinkers will devise a silver bullet solution to our weather pattern woes, but the truth is that if we are to resolve this issue, it will require an economic revolution. Capitalism is the biggest barrier to correcting climate change, and it doesn’t seem to be going anywhere any time soon.
Adam Smith, often credited as the “Father of Modern Capitalism,” published The Wealth of Nations in 1776 and thereby introduced the idea that wealth production in a society would increase immensely if individuals were allowed to pursue their self-interest without government interference. Additionally, in following their own interests, individuals would be simultaneously and unconsciously serving the public interest. In Smith’s theory of capitalism, individuals are “rational actors” who carefully consider the consequences of each economic decision they make. Individuals accurately weigh the costs and benefits of each purchase or sale in order to determine whether it is in their self-interest to make the transaction. By this reasoning, every transaction that occurs will benefit both the buyer and the seller more than it costs them, resulting in a net positive for society. This is the beautiful delusion that lies at the heart of our economic system, and it is one of the premises upon which we operate that precludes us from being able to deal with climate change.
I’m not saying capitalism is innately good or bad, I’m just saying it fails to accurately describe the world in which we live. No one does a Smithian cost/benefit analysis before buying or selling anything. Our fallible human minds aren’t even equipped to do such a calculation. For instance, if I were to ask you how much a gallon of gas costs, you’d probably answer around $3, but that’s the price, not the real cost. The real cost would include such considerations as the amount of carbon that is emitted into the atmosphere by that gallon of gas. A gallon of gas produces 19.64 pounds of carbon. According to the IPCC, we can “safely” emit 500 more gigatons of carbon before our climate reaches an irreversible and inhospitable tipping point. Have you ever divided 19.64 pounds by 500 gigatons to find the precise percentage of our carbon budget that your single gallon of gas will eat up? Furthermore, have you ever converted that percentage into a dollar amount that accurately assesses the cost of fouling up the atmosphere and disrupting the planet’s internal thermostat? If you ever got to that point, did you then analyze the benefits of that gasoline and meticulously weigh them against the costs? Probably not. There’s probably not a single individual in the world who has ever done such a mind-numbing analysis of the costs and benefits of any purchase. In reality, it’s not even possible to conduct such a calculation, because it would require us to assign a dollar amount to all of the natural goods and services provided to us by our planet.
Yet that is what is expected and assumed of us “rational actors” in the capitalist model. This is why our economic system is so appealing and yet so irrevocably flawed. We all like to think we are smart enough to know what’s good for us and for each other, and we hate being told we can’t do the things that we enjoy. So our policy makers and leaders whisper sweet Smithian lullabies in our ears and tell us that as long as we do what makes us happy, we, as individuals and as a collective society, will flourish forever. Unfortunately, that’s simply not true.
If we are to get serious about solving climate change, we will need to make difficult and immediate sacrifices. As individuals, it’s impossible for us to grasp the scope and scale, both in terms of time and space, of the climate change conundrum. Sad to say, climate change doesn’t even matter all that much to us as individuals. Most of us don’t even know where we’ll be or what we’ll be doing tomorrow, let alone 30 to 100 years from now. Yet from a societal standpoint, climate change poses an existential threat, and as members of this planetary society called humanity, we should be taking serious strides to combat it. In order to do so, we will need a new way of assessing the value of the natural world, and we will have to accept government regulations that most proponents of our modern economic model will find repulsively oppressive. We will need to set an exact limit on the amount of carbon that we can emit, and forcibly prevent ourselves from exceeding that amount. That will mean leaving fossil fuels in the ground — fossil fuels that have already been tallied as assets on the books of the world’s largest corporations. It will require us to stop driving unless or until we develop a clean, reliable, alternative fuel source. The same goes for electricity generation. The practices that are deeply entrenched in our daily lives will have to be drastically altered to prevent further, disastrous atmospheric pollution. Unless we change our economic narrative, which is basically our method of evaluating the real value of our planet’s natural resources and services, a realistic solution to climate change is beyond our reach.