Climate Change and Capitalism: How Our Current System Ruins the Planet
We are entering the Anthropocene, an epoch in which the Earth is shaped and bent, all solely based on the pursuit of humankind’s needs and interests. Humanity’s impact on the Earth and its ecosystem have been so massive that human activities have caused around 100% of the global warming measured since 1950, as stated in Intergovernmental Panel on Climate Change’s (IPCC) fifth assessment report. Additionally, an article published on Nature also stated that the global material output of human activities have exceeded all living biomass on the planet, proving how far humans have altered the planet. It is unlikely that Earth’s natural changes in climate have played a major role in the long-term temperature change of the planet–we, humans, have brought the planet into an era that is deeply unsustainable and destructive in a very short amount of time.
All the findings concerning climate change and environmental destruction caused by human behavior should have told us that there is something deeply wrong with how humans work as a system that exploits the Earth’s resources. Yet despite climate change being a real, time-sensitive issue, there is almost little to no sense of urgency to address it properly, be it on an individual level or policymaking stage. This is not out of the lack of awareness–exactly 40 years ago, scientists from 50 nations met at the First World Climate Conference (in Geneva, 1979) and agreed that alarming trends for climate change made it urgently necessary to act, various international treaties and agreements, and voiced concerns from thousands of environmental NGOs spread across the globe, it is hard for governments to plead ignorance on their lack of action. This brings us to a question: why? What is it that makes it so hard for policymakers to take a grand action, declaring a war to end climate change once and for all? Maybe the answer is much more than mere unwillingness–the hesitance is deeply ingrained in the system that we have been living under for a few centuries now: capitalism.
Capitalism and commodification
In order to address capitalism in the face of climate change — and on a bigger scope, environmental destruction — it is essential to explore the concept of commodification since capitalist economies are principally based on the production and consumption of commodities.
A ‘commodity’ is an object that has value and tradability in a market. This act of quantifying an object to be traded and valued for something in a market is considered as ‘commodification’: with ‘objects’ ranging from tangible items (products) to intangible ones (services). Before modern times, the circuit of capital — production capital, distribution capital, and money capital — rarely made a full cycle since many processes that are within the circuit were considered as immoral and/or irrational to be traded by the holders of political and moral authority in the past. The process was aborted since one or more of the elements in the aforementioned processes were not ‘commodified’ and were ones that could not be traded through a ‘market’. Then, came capitalism and its nature of commodification.
Capitalism is an economic system that is based on the production and consumption of commodities. In the commodification process within the circuit of capital, there is externalization of the true cost of a commodity; the environmental harms caused by the current unsustainable practices within production and distribution. However, even if we were to successfully internalize the value of nature in our economic activities, this would only create a new contradiction. Capitalist approach into natural commodities can never be complete for the reason that natural resources do not require capital or labor to be produced, and a certain degree of ‘production’ has taken place before human intervention.
Because natural processes do not need capital or labor in its production, and its social, cultural, and or ecological value exceeds the price the market places upon them, they are considered pseudo-commodities which makes them different than “true” commodities that are completely privatisable for the monetary value in them are discernible. An internalization approach that is established upon a price-based market — which is one of the inherent characteristics of capitalism — would never be able to truly internalize the cost of unsustainable practices that harm the environment.
On exploitation and commodification of environmentalism
Capitalism is an economic system that promotes economic freedom and incites innovation. It lives under the principle that humans live with the ideals of individual freedom in their existence, actions, and property, and no one shall be forced into action for the advancement of goals of the others. Under capitalism, the ‘market’ has its own self-regulatory mechanism with the basis of supply and demand. This ‘invisible hands’ mechanism acts as the basis of commodities’ pricing with respect to society’s needs and best interests. The purpose of the government is to protect the rights of the individual citizen, not to improve the “general welfare” of the population. Capitalism principally believes that the freer the market (or in other words, the less intervention it is subjected to by the government) the better it would work to provide necessities and innovations for society.Yet, in modern days, these principles slowly fade and have been proven to be untrue.
First, we must understand how capitalism works as a system that exploits global resources. Capitalism, in this neoliberal era, fails to address the rampant accumulation of profit that does not take environmental and societal sustainability into account. Jonathan T. Park of University of Utah in his essay “Climate Change and Capitalism” elaborated the use of resources under capitalism as follows: the more resources a nation uses, the more it grows. Then the less the resources the nation has, the less the nation could grow. But a big nation needs lots of resources to sustain itself. Thus, the nation has 2 choices: to collapse into itself, or to keep fulfilling its need for resources by extracting them from other nations. This leads to globalization and expansion of ‘influence’–an unsurprising pattern when we look at the current relationship built between the global north and global south.
This system not only exhausts the world’s natural resources and puts very little regard to the climate shift happening all over the planet, but also concentrates those resources into the global north, widening the global socio-economic disparity even further. For example, Dave Tilford from the Animal Welfare Institute reported that the US accounts for 5% of the world’s population, yet it consumes 25% of the world’s oil, 23% of the world’s coal, and 27% of the world’s aluminium gained from global exploitation of resources. He even stated bluntly that “A Child born in the US will create thirteen times as much as ecological damage over the course of his or her lifetime than a child born in Brazil.”
Furthermore, it is hard to truly change our exploitative nature under capitalism considering that we have to quantify and treat environmentalism as a ‘commodity’ to be able to do a proper cost-benefit analysis of the switch towards more sustainable practices. For example, let us say the price of a collective move towards a more sustainable production model that does not overexploit the environment is xxx billion USD, whilst to stick to our current practice costs way cheaper. Under capitalism, you are forced to determine the monetary value of saving the environment and treat it as a commodity to trade in a market. As articulated by Ackerman and Heinzerling, “To weigh the benefits of regulation against the costs, we need to know the monetary value of preventing the extinction of species, preserving many different ecosystems, avoiding all manner of serious health impacts, and even saving human lives. Without such numbers, the cost-benefit analysis cannot be conducted” (2002, p. 6). For that reason, it is very hard to convey the true value of ‘saving the environment’ under capitalism.
Materials Economy
Another dimension of commodification brought by capitalism is the materials economy. To put things simply, materials economy is the process of objects moving through the process of exploitation, production, distribution, consumption, and disposal. This is a system in crisis for the reason of, as elaborated by Annie Leonard, Executive Director of Greenpeace USA, it “is a linear system and we live on a finite planet and you can not run a linear system on a finite planet indefinitely”. To be able to understand the gravity of the current materials economy’s effect on the planet, we would briefly explore and dissect the reality of its processes.
The production of commodities in a capitalist economy has a high tendency to disregard its effects on the environment and the climate. Our present-day practices also encourage overexploitation in developing countries that are, in fact, the most susceptible to the adverse effects of climate change. It is also important that as a mode of production, capitalism has the characteristic in which production of goods is for profit rather than own use, meaning production of goods are centered around profit rather than proper personal utilization (see Bottomore 1983: 64). This leads to two things: overproduction and designed obsolescence in the consumption process.
Overproduction of commodities affects the distribution process within the materials economy. To maintain scarcity and manipulate the market’s supply-demand mechanism, it is not an uncommon practice to throw away and discard products that are still perfectly usable including food, sanitary products, clothes, and even medicines as exposed by #RetailMadeMe movement. Whilst in the consumption process, the designed obsolescence in produced commodities causes products to be easily disposable, furthermore creating a waste of resources that are put into the production process. In fact, industrial design journals from the 1950s intentionally discuss how to design a product that breaks fast, but not quick enough that the consumer’s faith in the product’s longevity is lost [1]. This condition has gotten so bad that in North America, 99% of materials that undergo this system would be discarded in the span of 6 months; this figure includes the upstream wastes generated during the exploitation, production, and distribution processes [2].
Additionally, in capitalism, it is very difficult for consumers to make healthy purchases. Society is engineered into dissatisfaction through advertisement and media: you have to wear this, you have to look like that, you have to live a certain lifestyle to truly achieve happiness. People are encouraged to consume, consume, and consume as if it is the only way to be a content human being. Capitalism lives under the pretence that consumers are rational–but they are not, and in reality, their behavior is designed to overconsume. To pertain capitalism, it is essential for a society to continuously consume. This is bad for the environment, as a paper that was recently published by researchers at the University of New South Wales in 2020 stated that overconsumption is a really strong determinant of climate change, with citizens that have higher consumption power being responsible for environmental impact to a large extent.
And even if there is a global conscious effort to do ethical consumption with proper cost-benefit analysis under the current system, a study done by researchers at the Corvinus University of Budapest in 2011 found that there is “no significant difference” between the carbon footprint of those who consume “ethically” and those who do not. In short, tackling environmental problems through a consumer’s choice of consumption would not ever amount to the pollution caused. Even if, rhetorically, every human on earth is to switch into a more eco-conscious lifestyle, it will not ever be able to address the true nature of exploitation of resources that is a constant under our current model of capitalism.
“True Capitalism”: could it save the environment?
For all the previous explanations on why capitalism is unable to address environmental harms brought by economic activities conducted with the system as the basis, one may argue that these problems arise because what we have right now is not ‘true capitalism’: a system that accurately upholds private property, individual rights, and freedom.
Supporters of capitalism often propose that the solution to the problems we encounter under the system is to implement ‘more capitalism’. Take privatization of property, for example. It seems at the current arrangement, it is permissible for the population to pollute publicly owned properties: lawns, parks, forests, etc. By privatizing these properties, we would be able to quantify the degree of environmental harms done towards an individual, it would be possible to hold corporations that actively harm the environment accountable for violating one’s individual rights to not be harmed by pollutions they do not consent to be impacted by. The government would impose penalties and/or punishments based on the severity of the crime, and settle a form of compensation towards individuals affected. Afterall, the true essence of capitalism is to ensure that individual’s rights are not violated in the pursuit of other parties’ interests. But is such a system truly achievable?
It has been explained previously that it is not possible to truly quantify, thus internalizing the monetary value of nature and saving human lives and wellbeing. And to ensure such internalization is fair, just, and accurate, the loss of every single individual that suffers from the repercussion of environmentally harmful industrial and corporate practices must be taken into account. This means, for every kilogram of harmful greenhouse gases (that causes climate change) released by a certain industrial activity in, say, the USA, its effects towards the displacement of individuals located at the coast of Asia due to the rising sea level must be internalized. Its effects towards drought in Africa that causes hunger and poverty of its population must be internalized. Now, is such analysis even feasible?
Even then, should such analysis be possible, how would the justice system be able to give an appropriate punishment? Retributions in the form of fines would only blur out the goal of the imposed law — as long as corporations are able to compensate monetarily for the harms they have done towards the environment, it means all is well and they could go ‘business as usual’. And if that is not possible, would giving “the corporate death penalty” by dissolving those corporations be a just punishment?
All in all, capitalist principles do not live in the void. When they are implemented, there would be various constraints coming at play.
A reflection
Capitalism. Some may define it as an economic system–while they are not wrong, they are not entirely right either. Capitalism is not only an economic system; it is a system of culture, politics, and power. Without us realizing, capitalism shapes the reality of human behavior in exploitation and consumption. It prospers through continuous extraction of nature to produce commodities with little to no regard towards societal and environmental impacts. Capitalism, in this neoliberal era, fails to address the rampant accumulation of profit that does not take environmental and societal sustainability into account.
Climate issues we face now are not caused by household activities–they come from uncontrolled exploitation of resources and unsustainable consumerist lifestyles that are inherently promoted by capitalism. If we fail to hold corporations and politicians that celebrate capitalism accountable, the ones who would suffer the most consequences will be ‘the commoners’–that while they also do contribute in climate change, they are trapped under a system in which they are not able to make the active choice that upholds environmental sustainability, a system that rewards widespread exploitation, and a system that celebrates overconsumption in pursuit of fulfilling intangible, niche desires.
Author: Alifia Tsabita Oviningtyas
Editor: Roes Ebara Gikami
Illustrator: Firli Wulansari
References
[1] Home Furnishing Daily, Retailing Daily and other journals quoted in Vance Packard, The Waste Makers in the chapter 10, “The Short, Sweet Life of Home Products,” pp 87- 100.
[2] Paul Hawken, Natural Capitalism, (1999) p. 81
