Nowadays, the dominating economic system of capitalism can be found in nearly every state of the world. In the following capitalism should be understood as a unique historical formation based on the existence of a mercantile class, the accumulation of capital, the omnipresence of competition and the separation of production goods from the state.
Concurrently, as I will express with this essay, capitalism can not avoid bearing the ‘market failure’ of climate change. To support my core thesis, I will present two main arguments in the following. First, it will be discussed how fundamental fossil fuels (for example coal, petroleum and natural gas) are for capitalism and the extent to which the capitalist economy can (not) be decoupled from fossil fuel use. Therefore, I will raise the case study example of coal as one of the most important fossil fuels. Second, this essay will address the question of how fundamental enclosures and the rush for land are for the capitalist economic system will be answered. To illustrate that, I will explore the example of palm oil production. This essay will briefly conclude by presenting the main implications for addressing challenges related to climate change.
Capitalism as main driver of climate change
Nowadays, the dominating economic system of capitalism can be found in nearly every state of the world. It appears to be such a taken for granted that Fredric Jameson (2003, p.76) comes to the conclusion that “it is easier to imagine the end of the world than to imagine the end of capitalism.” In short, in the following capitalism should be understood as an unique historical formation based on the existence of a mercantile class, the accumulation of capital, the omnipresence of competition and the separation of production goods from the state (Heilbroner 2008).
Concurrently, as I will express with this essay, capitalism can not avoid bearing the ‘market failure’ of climate change. To support my core thesis, I will present two main arguments in the following. First, it will be discussed how fundamental fossil fuels (e.g. coal, petroleum and natural gas) are for capitalism and the extent to which the capitalist economy can (not) be decoupled from fossil fuel use. Therefore, I will raise the case study example of coal as one of the most important fossil fuels. Second, this essay will address the question of how fundamental enclosures and the rush for land are for the capitalist economic system will be answered. To illustrate that, I will explore the example of palm oil production. This essay will briefly conclude with presenting the main implications for addressing challenges related to climate change.
Fossil fuels – the lubricant of capitalism
The degree to which capitalist societies are dependent on fossil fuels, gets clearer when we make a closer examination of recent statistics. As Gaël Giraud and Zeynep Kahraman (2014) demonstrate, an increased consumption of fossil energies explains nearly two-thirds of economic growth of the 50 countries they examined for the span of time between 1970 and 2011. Alternatively, as the authors (2014, p.2) put it: “This means that, ceteris paribus, an increase (resp. decrease) of 10% of energy use per capita induces, on average, an increase (resp. decrease) of about 6 to 7% of GDP per capita”. To take a global perspective, as Christophe Bonneuil and Jean-Babtiste Fressoz (2017, p.242) demonstrates an annual rise of 4,48% in fossil fuels between 1948 and 1973 (‘Great Acceleration’) resulted in the increase of world’s GDP by 4,18% per year. Despite the so-called oil shock of 1973, however, the importance of fossil fuels didn’t lower significantly in the last decades. Thus, capitalism’s (historic) dependency on fossil fuels shall be illustrated in the next step.
In the case of coal, one of the dirtiest fossil fuels regarding the emission of greenhouse gases, including carbon dioxide, and hence sharpening climate change, its initial importance results from an unique feature: “[B]ecause it could be stored and accumulated, [coal] made it possible to smooth out production, to linearize time and subject it to market imperatives” (Bonneuil & Fressoz 2017, p.203). Consequently, the extraction of coal began to increase enormous in the 18th century, further pushed by its significance for the use of steam engines, one of the main driver for the Industrial Revolution (Clark & Jacks 2007). The spread of steam engines, however, is being used by Andreas Malm (2013) to exemplify the inherent social component of fossil fuels, or as he puts it pointed: “[F]ossil fuels should, by their very definition, be understood as a social relation: no piece of coal or drop of oil has yet turned itself into fuel” (Malm 2013, p.17). Malm (2013, p.51) even goes that far to claim that Karl Marx’ famous formula ‘Money – Commodities – Money with an increment’ needs to be limited to the use of fossil fuels (Money – Commodities (Carbon Dioxide) – Money with an increment).
Only taking this explanation into account, the question of why capitalist societies are still dependent on fossil fuels can not be answered appropriately. Instead, the development of what can be called ‘fossil economy’ (Malm 2013) can also be explained with the principles of path dependency and ‘lock-ins’. Thereby, fossil economy can be defined as „an economy characterised by self-sustaining growth predicated on growing consumption of fossil fuels, and therefore generating a sustained growth in emissions of carbon dioxide” (Malm 2013, p.17).
For example, in the Anglo-Saxon world the causes for fossil economies can be found during World War II. Then, gigantic networks of pipelines and refineries were installed in the USA and Great Britain due to war aims (Bonneuil & Fressoz 2017, p.138). The then existent infrastructure facilitated the tremendous spread of cars after in the 1950s (Edgerton 2011, p.181). This is only one of many examples of path dependency and structural ‘lock-ins’ that prevents the decoupling of capitalism and fossil fuels until today. Consequently, the term ‘decoupling’ needs to be distinguished into two components. Whereas ‘relative decoupling’ can be defined as “a decline in the ecological intensity per unit of economic output“, ’absolute decoupling’ refers to a decline of resource impacts in absolute terms (Jackson 2009, p.67). To emphasize is that only the latter matters for remaining within ecological limits (ibid.). Even if relative decoupling happens successfully in a few sectors, the constant increase of global carbon emissions from fossil fuels up to 9855 million metric tons of carbon in 2014 tells another story of absolute decoupling being a long way away (Marland et al. 2017).
Enclosures and the rush for land
The dependence of capitalism on land expansion is another argument of why capitalism drives climate change. For this reason, land is under pressure by at least five factors: energy security, food security, bioeconomy, deforestation and the ‘Clean Development Mechanism’. Therefore, one of the antecedents of increased land pressure lays in the global spread of so-called enclosures. According to Karl Polanyi, this practice can be understood as the appropriation of common used land with the aim of making agricultural products more profitable and reaches back to the 15th century, at least. By saying that “[e]nclosures have appropriately been called a revolution of the rich against the poor” (Polanyi 1957, p.37), he highlights a critical point: enclosures convert land into a commodity. Due to not codified land using rights, indigenous people are thus more vulnerable to lose their land in the course of deforestation which emits huge amounts of carbon dioxide (Stevens et al. 2014). That is how enclosures illustrate in microcosm what Polanyi (1957) calls ‘The Great Transformation’ – the transition from a subsistence to a market economy.
The pressure on land and therewith local communities increased significantly since 2008, due to a leap in land deals (‘land rush’). According to Grain (2016, p.2), an international non-profit organisation, their number increased from around 100 in 2008 to the fivefold in 2016. Thereby, the investments don’t only date from the agribusiness, but also from governments and financial investors (Grain 2016). However, it is to emphasise that the acquisition respectively enclosure of large-scale land is no new phenomenon, as I want to demonstrate with the example of deforestation for the cultivation of palm oil in Indonesia.
Basically, palm oil as a ‘flex crop’ is diverse usable in detergents, cosmetics or food. Often, huge areas of wood need to be logged or cleared releasing gigantic amounts of climate-damaging carbon dioxide. In the case of Borneo, one of the world’s biggest islands which is mainly part of Indonesia, therefore the total forest area has decreased around 30% from 1973 to 2010. During this span of time, two areas even became non-forest. Overall, “the combined area planted in industrial oil palm and timber plantations in 2010 was 75,480 km[2], representing 10% of Borneo” (Gaveau et al. 2014, p.1). A similar picture can be even drawn for whole Indonesia. While the oil palm area accounted for 4.1 million ha in 2006 (Obidzinski et al. 2012, p.25), it more than doubled to 2015 (Wright & Rahmanulloh 2015, p.2). Another doubling to 17 million ha is projected until 2025 (Sung 2016, p.2).
Worldwide, the shift to palm oil production even counts for 40% of all deforestation attributed to the crop sector (European Commission 2013, p.56). Moreover, in absolute terms, the world production of palm oil rose from 13.5 million tonnes in 1990 to 155.8 million tonnes in 2014 (Food and Agriculture Organization of the United Nations Statistics Division 2016). Finally, due to palm oils diverse usability, sustainability initiatives and boycotts to stop the negative impacts related to its increasing demand can only have limited effect.
Conclusion and implications
As I wanted to argue with this essay, capitalism can not avoid bearing the ‘market failure’ of climate change, which I have tried to address with two presented arguments. Therefore, I presented two main arguments. Firstly, fossil fuels are the lubricant of capitalism and they can not be absolutely decoupled from each other. Secondly, capitalism insists of a growing space of land in the process of ‘The Great Transformation’ (Polanyi 1957). The to be answered question thus is: What does the with climate change correlated challenges imply, finally?
First, they demonstrate that capitalism can not regulate itself in a way that would avoid these negative externalities completely. Instruments such as the Clean Development Mechanism or the trade with carbon certificates could produce relief if their implementation would be more ambitious. On the downside, they can bear new unwanted tendencies such as ‘carbon colonialism’ (Bulkeley & Newell 2015, p.37).
Second, these market failures also imply that, to stay below the official set two degree limit, the capitalist economic system needs to be radically transformed. Recent attempts to monetarize more and more spheres of life can lead to further market failures. That is why George Monbiot (2007, p.50) asks rhetorically: “[I]s it possible to place an economic price on human life? Or on an ecosystem, or on the climate?” Because these attempts have to fail, as Monbiot argues, what is really needed is a renaissance of morality which combines both the solution of social and ecological problems, e.g. via the principles of contraction and convergence regarding global greenhouse gas emissions (Monbiot 2007).
Finally, what is needed in the long-term is a ‘no-carbon economy’, referring the aim of a ‘low-carbon economy’ which the Group of Seven set themselves. Whether capitalism is the best economic system for achieving this aim, remains another question that needs to be further investigated.
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- Max Schmidt (Author), 2017, Capitalism as main driver of climate change, Munich, GRIN Verlag, https://www.grin.com/document/502741
