Guest essay by Eric Worrall
A team of scientists appointed by the United Nations has reported that a free market system cannot provide the economic transition required to defeat climate change.
Scientists Warn the UN of Capitalism’s Imminent Demise
By Nafeez Ahmed
Aug 28 2018, 1:40am
A climate change-fueled switch away from fossil fuels means the worldwide economy will fundamentally need to change.
Capitalism as we know it is over. So suggests a new report commissioned by a group of scientists appointed by the UN Secretary-General. The main reason? We’re transitioning rapidly to a radically different global economy, due to our increasingly unsustainable exploitation of the planet’s environmental resources.
Climate change and species extinctions are accelerating even as societies are experiencing rising inequality, unemployment, slow economic growth, rising debt levels, and impotent governments. Contrary to the way policymakers usually think about these problems, the new report says that these are not really separate crises at all.
For the “first time in human history,” the paper says, capitalist economies are “shifting to energy sources that are less energy efficient.” This applies to all forms of energy. Producing usable energy (“exergy”) to keep powering “both basic and non-basic human activities” in industrial civilisation “will require more, not less, effort.”
The shift to renewables might help solve the climate challenge, but for the foreseeable future will not generate the same levels of energy as cheap, conventional oil.
The new report is available here
From the report;
… Rapid economic transition requires proactive governance – markets cannot accomplish the task
It is clear from these examples that strong political governance is required to accomplish the key transitions. Market-based action will not suffice – even with a high carbon price. There must be a comprehensive vision and closely coordinated plans. Otherwise, a rapid system-level transformation toward global sustainability goals is inconceivable. Mazzucato (2013, 2018) has examined this topic from the perspective of innovation policy and argues that historically, major system-level innovations such as the US Apollo program have required the state to set the mission and coordinate and finance much of the related research and development. According to her research, achieving system-level transition has required and will require proactive mission-oriented innovation – it will not be enough for the state to fix “market failures” reactively. Of course, innovation alone is not enough, and we will return to the question of limiting resource use and organizing jobs below. …
No doubt the United Nations will step in to provide the necessary strong governance if we ask them to.