Climate Change and the Economy: Facing Reality

(Canada Geese – Eric Kraft)

I denied climate change for longer than I care to admit. I knew it was happening, sure. But I stayed pretty hazy on the details and only skimmed most news stories. I told myself the science was too complicated and the environmentalists were dealing with it. * * *

A great many of us engage in this kind of denial. We look for a split second and then we look away. Or maybe we do really look, but then we forget. We engage in this odd form of on-again-off-again ecological amnesia for perfectly rational reasons. We deny because we fear that letting in the full reality of this crisis will change everything.

And we are right. If we continue on our current path of allowing emissions to rise year after year, major cities will drown, ancient cultures will be swallowed by the seas; our children will spend much of their lives fleeing and recovering from vicious storms and extreme droughts. Yet we continue all the same.

What is wrong with us? I think the answer is far more simple than many have led us to believe: we have not done the things needed to cut emissions because those things fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have struggled to find a way out of this crisis. We are stuck, because the actions that would give us the best chance of averting catastrophe – and benefit the vast majority – are threatening to an elite minority with a stranglehold over our economy, political process and media. — Naomi Klein, “The hypocracy behind the big business climate change battle,” The Guardian,  September 12, 2014 (here).

Naomi Klein is a potent force in economic journalism. In The Shock Doctrine (2007), she provided a detailed account of how predatory “disaster capitalists,” tied to Milton Friedman’s “Chicago School,” have taken advantage of natural disasters like Hurricane Katrina and conflicts like the war in Iraq, and even engineered man-made disasters such as revolution in Chile, for privatization and profit. Now her new book, This Changes Everything: Capitalism vs. the Climate, is justifiably making headlines. In this book, I suspect, Klein chronicles the record of corporate opposition to the fight against global warming.  

She published another article a week after this one (The Guardian, September 20, 2014, here,), on the eve of the climate demonstrations in New York City and around the world, which was head-noted with this:

The truth about our planet is horrifying, but the true leaders aren’t the ones at the UN – they’re in the streets. This is why the People’s Climate March matters.

This is a more direct answer to Klein’s question, “What is wrong with us?”: Many of us who are not in denial about science, or even about economics, still find the reality of climate change hard to confront because the truth about global warming, and the pace of extinctions, is indeed quite terrifying. And the bad news keeps getting worse. In today’s New York Times, the article “Global Rise Reported in 2013 Greenhouse Gas Emissions,” by Justin Gillis, September 21, 201 4 (here) reported:

Global emissions of greenhouse gases jumped 2.3 percent in 2013 to record levels, scientists reported Sunday, in the latest indication that the world remains far off track in its efforts to control global warming.

Over the last decade, Gillis reports, emission growth has averaged 2.5 percent annually. So what this means is that greenhouse gas emissions are more than 130% of the level they were at just a decade ago. This is a perilous trend, certainly, but what does this imply about the amount of danger we face and how quickly we need to take decisive action? According to Secretary of State John Kerry, in today’s opening remarks at NYC Climate Week (U.S. Department of State, September 22, 2014, here) :

When we began this discussion a number of years ago, we were warned by the scientists that you had to keep the greenhouse gas levels about 450 parts per million in order to be able to hold to the 2 degree centigrade possible allowable warming taking place. Then, because of the rate at which it was happening, the scientists revised that estimate and they told us, “No, no, no, you can’t do 450 anymore. It’s got to be 350 or we’re not going to meet the standard.” And I, unfortunately, tell you that today not only are we above 450 parts per million, but we are on track to warm – having already warmed at 1 degree – we’ve got 1 degree left – we’re on track to warm at at least 4 degrees over the course of the next 20, 30, 40 years, and by the century, even more.

So this is pretty real. And what is so disturbing about it is that the worst impacts can be prevented still – there is still time – if we make the right set of choices. It’s within our reach. But it is absolutely imperative that we decide to move and to act now. You don’t have to take my word for it. You don’t have to take Al Gore’s word for it. You don’t have to take the IPCC’s word and the Framework Convention, all those people who are sounding the alarm bells. You can just wake up pretty much any day and listen to Mother Nature, who is screaming at us about it.

As Klein reminds us, there are deniers and, critically, “the actions that would give us the best chance of averting catastrophe – and benefit the vast majority – are threatening to an elite minority with a stranglehold over our economy, political process and media.”  Actually, no one can escape this fate, not even them, if we don’t prevent it. So what does this imply about the economic interests that are in denial? Doesn’t the survival of the planet matter to everyone?

The interests most directly involved, of course, are the giant conglomerates hugely benefiting from the extraction and sale of carbon from the ground (e.g., Exxon/Mobil, BP, Koch Industries). It is utter insanity not to be on the safe side, if we are concerned about the survival of human civilization, but the evidence shows we are no longer on the safe side. There will be significant damage. Only corporations, for which profit is their sole objective, could be in denial about the extent of this threat, intransigent in the face of overwhelming evidence. Corporate charters rule, and corporations will not necessarily act even to save themselves and, although our Supreme Court has declared them to have the constitutional protections and freedoms of actual human “people,” this lack of human judgment and conscience is a critical difference, especially when their executives take on the responsibility of fighting against anything that threatens the corporate interest.

So I would be a bit more precise than Klein: Many of us are simply in denial about the reality of global warming because we cannot face the terror of it. But “we” are not in denial about the corporate deniers or their reasons for blocking corrective action. About them, we are dismayed and angry, and we feel helpless — but we are not in denial.

That distinction is important because there is something else that nearly all of us are actually still in denial about, and that is that unfettered capitalism threatens not only the future of the planet, but independently threatens itself as well. This blog has explained in detail how inequality grows in market economies, and how the inequality reduces income growth, in a vicious cycle of decline that can only end one way. Since 1980, income concentration in the top 1% has increased by over 20%, and the wealth (net worth) of the top 1% has increased by well over $20 trillion. Average annual aggregate income growth has fallen from 4% in the post-WW II prosperity era to about 1.5% over the past decade. 

Naomi Kelin, like the rest of us, is as yet unaware of the full implications of the facts of inequality, and that is because mainstream “neoclassical” economics has been in denial about them for over a century. Some argue that the neoclassical “denial” is actually hypocracy, designed to protect the interests of wealth. Intentional or not, that is exactly what it has done.

It may well be that, as Kerry asserts, we can all see the effects of global warming in our daily lives. My wife and I think so. But there is substantial evidence as well that we are feeling the effects of growing inequality and economic decline, especially as America learns the facts about income and wealth distribution. Today’s news stories are informative on that score as well:

(1) Today. the editorial board of the Albany Times Union, my hometown newspaper, formally rejected “trickle-down” ideology and put the blame for shrinking state and local tax revenues squarely where it belongs, on the lack of a nationwide system of progressive taxation. This is the first time, so far as I am aware, that the TU editorial board has reached this important conclusion. (“Tax Policies Need Review,” the TU Editorial Board, Albany Times Union, September 22, 2014, here);

(2) A new Siena poll was released indicating that a majority of New Yorkers, as did most Americans last year, believe the economy is getting worse, not better. It is becoming clearer that people are retiring later, taking fewer vacations, and generally spending less in order to have enough money to sustain themselves in retirement. (“Stagnant outlook tarnishing the golden years, Siena poll finds,” Albany Times  Union,  September 22, 2014, here).

(3) In  “Those Lazy Jobless” (The New York Times, Op-ed, September 22, 2014, here) Paul Krugman  discussed Speaker of the House John Boehner’s recent claim, in a speech to the American Enterprise Institute, that “laziness” is holding back employment in America:

People, he said, have “this idea” that “I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around.” Holy 47 percent, Batman!

It’s hardly the first time a prominent conservative has said something along these lines. Ever since a financial crisis plunged us into recession it has been a nonstop refrain on the right that the unemployed aren’t trying hard enough, that they are taking it easy thanks to generous unemployment benefits, which are constantly characterized as “paying people not to work.” And the urge to blame the victims of a depressed economy has proved impervious to logic and evidence.

This argument, Krugman continues, overlooks that: “Benefits, especially for the long-term unemployed, have been slashed or eliminated.” While “there are still almost three million Americans who have been out of work for more than six months, the usual maximum duration of unemployment insurance,” and “extended benefits for the long-term unemployed have been eliminated — and in some states the duration of benefits has been slashed even further”: 

Only 26 percent of jobless Americans are receiving any kind of unemployment benefit, the lowest level in many decades. The total value of unemployment benefits is less than 0.25 percent of G.D.P., half what it was in 2003, when the unemployment rate was roughly the same as it is now. It’s not hyperbole to say that America has abandoned its out-of-work citizens.

And that’s just what I found skimming today’s news!  


Denial of climate science has prevented appropriate action to counter impending global climate disaster. But as we fight to preserve a future for humanity on this planet, we should consider that unfettered capitalism, and the unrestrained pursuit of profits, routinely interferes with that future, and is destroying any prospects for it.

All of us, moreover, have been in denial about the true nature of market economies, and misled about how they work, grow and decline, for far too long. Now we need to learn, and remember as well, that market economies are unstable, and that unfettered capitalism contains the seeds of its own destruction and is slowly failing.

Although there will, in all likelihood, still be human life on this planet in 2100, continuing to survive along with a severely reduced number of other animal and plant species, sufficient economic prosperity and the social determination needed to conduct the required battle against climate change may well not make it through another decade. In that eventuality, the world one hundred years from now will be far less hospitable than otherwise.

The appearance of Naomi Klein’s book at this time is important. Whatever else she is right or wrong about, she is correct that climate change raises the stakes, drastically and forever. Our struggle with and within ourselves is much deeper and more critical than we have yet dared to imagine.

JMH – 9/22/2014 (ed. 9/23/2014)





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