Is Capitalism Compatible With a Carbon-Neutral Society?
Climate change has become impossible to ignore. Escalating environmental catastrophes have become inevitable even if we halted all carbon emissions tomorrow (BBC, 2018). If we manage to decarbonise our economies and societies, we might avoid the destruction of the earth. However, if we continue along with the current trends of carbon emissions, we can expect mass migration, extinction of wildlife and ultimately, an earth which becomes majorly uninhabitable (Taylor and Watts, 2020).
To avoid this dire future, we must decarbonise the global economy, starting with our economic system here in Australia. This, however, may prove to be easier said than done due to the very nature of our capitalist economic framework. Indeed, Western capitalism runs on a need for “perpetual growth” that is intrinsically “incompatible” with climate action, says Molly Cato (2011).
Capitalism, in its essence, is based on an unsustainable cycle of mass production and consumption. If we cannot eliminate carbon from the current economic framework, we must reimagine a new one. To decarbonise our economy, and by extension, secure the future of the human race, capitalism needs to go.
Economic Frameworks & Arguments For Decarbonisation
If capitalism must fall to stop climate change and decarbonise our economies, this naturally lends to the next question: how can we dismantle capitalism? Foremost, one must examine economic frameworks for decarbonisation. Previously, the neoclassical approach to economics of ‘growth is always good’ was largely embraced in the West, including in Australia (Ozanne, 2016). Although this approach is increasingly receiving criticism for ignoring the limits of finite natural resources, it still poses a considerable obstacle for dismantling capitalism and moving towards a decarbonised economy.
The more contemporary framework of innovation economics slightly diverges from the traditional neoclassical approach. Whilst they are both supportive of capitalism and economic growth, innovation economists recognise the natural limits of finite resources in a way that neoclassical economists do not. An innovation economist would suggest that green growth and technology may provide a solution moving forward (Mazzucato, 2018). Zenghelis is one proponent of this approach, suggesting that digital and information technologies will be essential in shifting patterns of production, distribution and consumption towards decarbonisation (Jacobs and Mazzucato, 2016).
Namely, the process of reconciling the economy and ecology through green investment choices, urbanisation and renewable energy may provide a potential solution to the climate crisis. For example, this framework underpins global CERES initiatives, which favour a ‘circular economy and renewable energy system’ (Matthews, 2017). Whilst this is all true, these approaches are simply not enough to entirely decarbonise the global economy by themselves. Rather, they should form part of the solution as we transition away from Western capitalism towards a more sustainable economy.
Another key aspect of the innovation approach includes the decoupling of global production processes from the finite limits of natural resources. That is to say, economic growth in the 20th and 21st centuries has been closely coupled to the increased consumption of natural resources (UNEP, 2005). To move towards decarbonisation, we must separate economic growth and natural resource consumption. Of course, other economists believe that any approach that allows for Cato’s ‘perpetual economic growth’ is inherently incompatible with decarbonisation (2011).
This is particularly true for green economists or those who subscribe to the aptly named ecological economic framework. Even if we successfully decoupled economic growth and the consumption of natural resources, (which in of itself has proven to be a nearly impossible task) it would be to what end? Would it not make more sense to instead focus our collective energy and knowledge towards redesigning capitalism? It would appear as though the solutions proposed by innovation economists serve to treat the symptoms, ignoring the structural issues that caused them.
Raworth suggests that “what we need are economies that make us thrive whether or not they grow” (2017). Her theory of ‘21st-century donut economics’ disputes the long-held belief that economic growth is always good. That is, economies can grow too large to sustain. If we are to move forward towards a decarbonised economy, we must redesign western capitalism and the economic ideologies that underpin it.
This means moving away from a largely neoclassical economic system. Although innovation economics may serve as a useful transition towards a completely decarbonised economy, this approach cannot provide a long term solution. Rather, ideas from innovation economics such as decoupling should be viewed as short term solutions. In the long term, we should collectively strive for an ecological or green economic framework that seeks to redesign Western economies’ reliance on unsustainable capitalism.
The Sociable Weaver & Martin builders
As we move towards a zero-carbon economy, industries are being forced to reevaluate their business plans. This has resulted in a range of initiatives based on a shift towards a greener future. One industry affected is construction. The actual process of creating buildings and infrastructure is very carbon-reliant itself, considering the energy needed to create and transport building materials (Understanding sustainable construction, 2020). But more importantly, as pointed out by Zenghelis, how the rapidly growing cities of today are designed and built will have a huge impact on the future course of climate change.
The Sociable Weaver is a design and building company whose homes are each designed to a minimum 7-star energy rating (2020). The construction of every home is either carbon neutral or carbon positive and the construction sites themselves are zero waste and free from single-use plastic. Aside from the actual process of building, the homes also invest in a carbon-neutral future by integrating recycling and integration technologies.
This initiative provides an example as to how innovation economists see that decoupling might work in practice. The Sociable Weaver consciously eliminates any carbon outputs from their revenue model. In this way, they tap into a niche market of socially and environmentally buyers who are willing and able to invest in green construction. Of course, this revenue model relies on a small minority of consumers who are seeking to actively invest in decarbonisation.
ORCA Food Waste Processor
Where The Sociable Weaver construction primarily relies on the goodwill of consumers, ORCA Food Waste Processors are fuelled by science and technology. ORCA technology is a machine that mimics the natural digestive processes of our bodies to break down food waste into a liquid that can be routed through existing plumbing infrastructure. The liquid can then be used as a renewable and sustainable energy source.
Aside from reducing the amount of food waste that goes into landfill, the technology also has the future capacity to replace our tradition garbage collection truck system. This would reduce the carbon emissions associated with transport (2020). According to ORCA’s website, the technology creates “meaningful cost savings for customers while diverting food waste.” These cost savings come in the form of increased labour efficiency in kitchens and return from the energy created.
Taking a step further than the changes proposed by innovation economists, the ORCA Food Waste Processor illustrates a trend towards green growth innovation or eco modernisation. The Revenue model inherently recognises the benefits of CERES, ‘a circular economy and renewable energy system.’ Arguably, this model may be a better representation of what decarbonisation will look in the future. It doesn’t rely on the goodwill of potential customers, but rather creates an economic incentive for them to purchase the technology.
The Kala Space Project
Of course, one criticism of these two companies and other similar innovation-based approaches is that they still inherently rely on capitalism. It could be argued that we have tried these approaches in the past, and they haven’t been majorly successful. According to Cato, we struggle to move away from a carbon-reliant capitalist economy not due to our shortcomings, but rather an institutional “unequal distribution of power” (2011).
The Kala Space Project also works within the current models of capitalism, but with an eye to a greener future. The Kala Space runs as an op shop, community courtyard and meditation space. The op shop employs women who are escaping domestic violence, are at risk of, currently experiencing or recently escaped from homelessness. Everything sold in the store has been repurposed, therefore reducing the amount of clothing being discarded (2020).
This fusion between social impact, economic gain and the integral role of a circular economy could present a possible future. Foremost, the multi-purpose nature of the space creates additional community value. Consumers have the benefit of purchasing items that are significantly discounted and also receive the peace of mind that their money is going towards creating jobs for at-risk women.
Employing the ideological framework of green economics, this system favours the primary focus on intrinsic value — that is, provisioning rather than profiting. Unfortunately, the business model is once reliant on the goodwill of donators who are willing to pass on their used goods. This could pose a potential challenge to the longevity of the company’s ability to sustain itself.
Zenghelis suggests that “capitalism… [is] profoundly challenged by climate change” (2016). However, he fails to see a larger concern — whether efforts to address climate change are challenged by capitalism. The decarbonisation of our economies is requisite for our planet’s survival. The question is, how can we negotiate a transition towards decarbonisation under a capitalist framework? Carbon is a core component of capitalism, and its elimination would require a fundamental reshaping of not just individual technologies, but of entire systems of production, distribution and consumption.
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