Can a capitalist economic system solve climate change?

  • According to a recent report by the Intergovernmental Panel on Climate Change (IPCC), the world has only a dozen years to drastically reduce its emissions if we are to avoid the catastrophic effects of climate change.
  • To achieve this, governments and companies that use as much energy as major nations will need to make dramatic changes.
  • Some governments and companies are taking steps to try to drastically reduce emissions, but others are not.
  • The IPCC report says action is even more urgent than previously thought.
  • Whether or not the will to make the necessary changes exists in today’s society remains unclear.

Time is running out for the world to act in time to prevent the catastrophic effects of climate change.

As the recent report of the Intergovernmental Panel on Climate Change (IPCC) has revealed, the goals that nations around the world had previously set for action are inadequate. If we can’t drastically reduce emissions around the world within a dozen years, it will be too late to avert many of the disasters scientists predict – unless we use geoengineering techniques. potentially devastating and untested.

Because of all of this, the biggest question raised by the recent IPCC report was not how we deal with climate change. We know the answer: it’s about transforming the systems that drive society – energy, food production, transportation, land use – so that we stop pumping greenhouse gases into the atmosphere.

The big question the report raises is whether our capitalist economic system is willing to make the necessary changes.

The answer is unclear.

Many believe companies can and will take action to help reduce emissions, and there are companies – including big ones like McDonald’s and Walmart – that have taken action to do so.

Yet the IPCC report outlines the urgency to reduce emissions that will require coordinated action from organizations and governments around the world – something along the lines of an international “war effort” the way the world does has never seen it.

Smoke rises from the coal-fired power plant in Jaenschwalde, Germany, February 3, 2018. REUTERS/Hannibal Hanschke

We must drastically reduce emissions over the next 12 years to avoid catastrophe.

Thomson Reuters

Can companies make changes to help solve the climate crisis?

For decades, we’ve known that climate change is happening – and we know that to stop it, we need to reduce emissions.

Yet for the most part this has not happened. In the United States and around the world, we have continued to burn fossil fuels. Emissions increased in 2017 and this trend is should continue This year.

Part of this story is one of growth. As billions of people started making more money, buying cars and electronics, and eating more meat, greenhouse gas emissions increased. Widespread renewable energy infrastructure to power this growing economy does not yet exist.

We still want the quality of life to continue to improve for billions of people around the world. Yet by the end of the century, the UN expects the world’s population to reach 11.2 billion. If emissions per person continue to rise, global temperatures will quickly reach dangerous levels.

Growing recognition that we need to deal with climate change before things spiral out of control – with effects such as searing heat waves, powerful and rapidly escalating storms, dying coral reefs, mass extinctions animal species and rising sea levels – led nations around the world to sign the Paris Agreement in 2015, pledging to help prevent global temperatures from rising more than 2 degrees Celsius per compared to pre-industrial levels by 2100.

It was a ray of hope. But President Trump has said he plans to pull the United States out of the Paris Agreement. The United States is historically the largest emitter and one of the largest per capita emitters in the world, so this is a big blow.

Trump’s announcement led states, cities, universities and businesses to pledge to try to keep the Paris goals in the United States. These groups – sometimes called subnational actors – form the We Are Still In coalition. According to Carter Roberts, CEO of the World Wildlife Fund (WWF), research indicates that subnational actors can achieve about half of the achieve the Paris goals.

“Some companies haven’t stepped in as heavily, but when you add up all the different subnational actors, you get halfway there,” Roberts told Business Insider in a recent interview, ahead of the release of the IPCC report. “I would say half is pretty good.”

WWF and organizations such as the World Resources Institute collaborate on the Science Based Targets initiative, which helps companies identify ways to reduce emissions by the amount needed to meet Paris Agreement goals. This can be done by improving supply chains, but also by changing how companies obtain energy or where they manufacture their products.

According to Roberts, there are incentives for companies to reduce their emissions and push to put a price on carbon. These efforts attract consumers, they are initiatives that interest valuable workers and they are essential for any company that wishes to survive for the long term in a climate-changing world.

But Roberts also knows that time is running out.

“There’s a lot of inertia in our system,” he said. “Are we where I thought we would be 10 years ago in terms of what’s happening in the United States? Not on everything. Do I think it’s coming? Yes, I do.”

ecuador rainforest

Places like the Amazon rainforest must be protected if the world is to avoid the catastrophic effects of climate change.

REUTERS/Guillermo Granja

The growth problem

With this countdown, whether companies will decide to act on the climate is valid enough to sufficiently reduce emissions is still unknown.

As economies grow, we use more of the world’s limited resources. For this reason, some economists argue that we must stop viewing “growth” as a universally positive force if human society is to survive on the planet for the long term.

In her book ‘Doughnut Economics’, economist Kate Raworth argues that we need to reach an economic point where people have enough housing, energy, water, food and other resources, but where we don’t don’t use as many. resources that we cause dangerous climate change, air pollution, loss of biodiversity and other negative effects of growth.

This idea is not compatible with a form of capitalism that considers growth or earning more as the most important value. This will almost certainly require some redistribution in a world where the top 1% owns 46% of global wealth.

If companies can define value, as Roberts puts it, not just as shareholder value but also as societal value, they can justify making emissions reductions a priority. This is what makes the most sense in the long run because it’s the only way to not push the planet to a dangerous point.

Yet the latest IPCC report highlighted that we have even less time than expected to make the changes needed to address climate change. We will start to see dramatic consequences once temperatures reach 1.5C above pre-industrial levels, which is expected to happen by 2040. By 2100, we are on track to reach 3C above at pre-industrial levels.

“The new IPCC report sends the clearest signal yet that we are eager to act on climate. The scale of the problem requires more than just government solutions. All sectors of society must participate, and the private sector is important because of the scale it can reach,” Roberts told Business Insider in response to a follow-up question after the report’s release.

“Walmart’s total emissions are equivalent to those of France, and McDonald’s emissions are comparable to those of Portugal. Both have set science-based climate targets in line with Paris Agreement goals, as has nearly 500 other companies. Meeting or exceeding the Paris target, as the IPCC report calls for, will compel even more companies to join the fight by setting and meeting science-based climate goals.”

These companies are large enough that their actions are essential in addressing climate change. Yet the speed with which emissions must be reduced will also require dramatic action by governments, including regulations, carbon pricing and rushing the transition to renewable energy.

Currently, governments are not on track to achieve this. And even if some companies have committed to work on the climate, these commitments are not yet enough to prevent disaster.

The authors of the IPCC report suggest that it is still theoretically possible for us to act on the climate over time. Whether companies and governments are ready to do so remains to be seen.

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