Economic system

Our economic system must change in the face of environmental devastation

Climate change is the greatest risk and challenge of our time. The level of carbon dioxide in the atmosphere has reached 415 parts per million – the highest for nearly three million years. And the past five years were the hottest on record since the 1880s.

British scientist Brian Cox said that politicians “often make the mistake of viewing society as a series of groups competing for limited resources”. But this error is the very premise of much of the world’s free market economy, in which different stakeholders compete for the biggest profit, in complete disregard of any negative externalities.

Now, this amoral competition has brought us to a tipping point, where the Earth is gradually experiencing devastation. Impacts include ocean acidification, sea level rise and, among others, the displacement of populations. According to a study According to the United Nations Office for Disaster Risk Reduction, approximately 60 million people were affected by extreme weather in 2018. Through this devastation, nature compels us to make amends.

Climate change, however, is no longer just about the warming of the Earth. It is also about the annihilation of other equally important life forms on the planet and the depletion of its limited resources. A recent report of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) revealed that nearly one million plant and animal species are threatened with extinction due to hyper-intensive human activity.

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Our current economic system has created the mechanisms that allow us to produce and consume endlessly and without thinking. In many of her lectures, author and activist Naomi Klein has castigated capitalism as a dumb system devoid of any morality. Unlike the natural world which follows the pattern of birth, growth, maturation and death, nations working within the paradigm of capitalism aspire to perpetual upward growth, for that is what constitutes success. In his book, Prosperity without growthTim Jackson writes that “for the past five decades, the pursuit of growth has been the most important policy goal around the world.”

Gross Domestic Product (GDP) measures in monetary terms the number of goods and services that a country produces during a given period. For decades, GDP has been the only measure of a country’s economic success, while other development factors such as literacy and health, as well as levels of well-being and happiness, have been ignored. So while GDP can give a lot of information about the state of an economy, it provides an incomplete picture.

The global achievements of capitalism cannot be ignored. Since the industrial revolution, the world has realized immense potential – space travel, the internet and the smartphone revolution to name a few. These achievements were unimaginable only a few decades ago. However, economic growth has been fueled by a reliance on fossil fuels, which has led to constant global warming. As Barnabe Geis, director of Climate Ventures, an incubator of entrepreneurs, innovators and climate advocates, puts it: “we cannot always look to the past to learn from the future”.

This insidious disaster is the result of the paradigm of capitalism and its thirst for endless profits. The model must be revised and evolved to meet current needs. According to Geis, automation and technology are changing the nature of work and our economy anyway, and climate change will only accelerate this transition:

“The jobs of today will not be the jobs of tomorrow. This will force us to consider other ways of managing our society. The system can no longer function as it is and as it breaks down there will be some level of chaos. What we do over the next twelve years will determine if and how this chaos stabilizes. The disruption is going to be so significant that we will have to rethink our economic and social orders. »

Model evolution is the key phrase here. According to Eduardo Souza-Rodrigues, assistant professor in the economics department at the University of Toronto, the system must be beaten by its own rules:

“Complaining about capitalism is not the solution,” he says. “We need to make clean activities profitable, not dirty ones. We must deter anything that causes harm. Then we can let the economy run on its own,” he says.

But recent work paper by the International Monetary Fund revealed that governments offered the fossil fuel industry an alarming $5.2 trillion in subsidies in 2017, despite annual warnings of the catastrophic effects of fossil fuels on climate change – effects that we already know.

Another recent report by the International Renewable Energy Agency (IRENA) found that the cost of electricity generation from onshore wind energy fell by 22% between 2010 and 2017, and that of solar photovoltaic (PV ) fell by 73%. They predicted that the cost of producing renewables will be in the same price range as fossil fuels by 2020.

Reducing the dependence of the world’s economies on fossil fuels must be the priority to mitigate climate change while we are in the paradigm of capitalism. One way to do this is to encourage governments to find lasting solutions through policy change.

Transformational change, however, will occur at the intersection of policy, markets and behavior change. As Geis adds: “Our economy is based on extraction, so in terms of people’s consumption patterns, we can’t just talk about replacing things that are made by burning fossils with those made with renewable energy. because the planet does not have enough natural resources for us to continue consuming as we do.

The focus on GDP promotes consumerism and as a result we live in a world where the idea of ​​single use, throw away and replace has become ingrained in our culture. But if people start changing their consumption habits, not only will that help limit further environmental damage, but it will also send a strong message to producers that consumers are no longer willing to invest in unsustainable products.

Enraged people can actually create greater momentum for governments to act faster, according to Eduardo. Since most countries operate like a democracy, large numbers of people rallying behind a cause can be a powerful motivator for governments to take strong action. Behavioral changes can even be as simple as using colder water in the washing machine, air-drying clothes, buying fewer clothes, eating less meat, use water and electricity more efficiently.

“When it comes to climate change, there is no one silver bullet,” says Souza-Rodrigues. “It is the most difficult economic problem to solve because it requires cooperation.

“In reality, solutions that ignore how the economy works will fail. And no radical change in the functioning of the economy will occur. We need to look at the system to see what works for us and build on it.

Environmental degradation, global warming and the loss of plant and animal species are no longer imminent. All of these catastrophic changes are happening now.

It’s a complex combination of factors that has led to this moment, but a business model with profit as the ultimate goal has been central. It is therefore imperative that leaders around the world take a moral stance and act for the greater good, rather than maintaining their power and the status quo. And for the greater good to unfold, privileged actors will have to relinquish control. It may not seem like a realistic approach, but utopian ideas can foster desirable change.

Climate change is a risk for everyone, no matter what angle you look at it – financially, politically, socially and even geopolitically. Without concerted cooperation at all levels – by citizens, corporations and governments – capitalism will continue to wreak havoc on the only planet we know that can sustain life. As a transitional measure, working within the system to beat the system is the realistic way to curb the rapid, real-time environmental damage that is unfolding. However, in the long term, the culture of a profit-oriented society must be dissolved and rebuilt. And for that, we will have to re-examine the notions of purpose, work and productivity.

Change is another feature of the natural order of the world, so whether we like it or not, transformation will continue to happen. But according to Geis, the question is whether we will choose between “the most rapid and expansive deliberate transformation that humanity has ever undergone, or the most rapid and expansive, involuntary and destructive”.