We cannot shop our way out of environmental crisis, ‘green’ or not

Eight weeks ago, I wrote about the delusions of “green capitalism,” that there is no alternative to a dramatic change in the organization of the global economy. That led to a vigorous discussion, and I thank all of you who contributed to it.

This week, I’d like to return to this theme, in the form of discussing an interesting paper that I could then only quote briefly. The paper, “Green capitalism: the god that failed,” by Richard Smith of the Institute for Policy Research & Development in London, packs a powerful argument into its 33 pages. The paper was published in issue No. 56 (March 2011) of Real-World Economics Review. (That a publication for non-orthodox practitioners needs to take such a name speaks volumes of the field as a whole.) The author’s basic theses are:

  • “Green capitalism” is “doomed from the start” because maximizing profit and environmentalism are broadly in conflict; the occasional time when they might be in harmony are rare exceptions and temporary. This is because the managers of corporations are answerable to private owners and shareholders, not to society. Profit maximization trumps all else under capitalism and thereby sets the limits to ecological reform.
  • No capitalist government can impose “green taxes” that would force out of business the coal industry or any other because the result would be recession and mass unemployment. Without carbon or other “green” taxes, the “entire green capitalist project collapses.”
  • Green-capitalism proponents vastly underestimate the speed with which environmental collapse is coming. No amount of tinkering can alter the course of environmental destruction under the present system. Humanity, therefore, must replace capitalism with a post-capitalist ecologically sustainable economy.
  • Resource extraction is inherently polluting but can’t be shut without chaos. It is not possible to “dematerialize” much of the economy as green-capitalism proponents believe possible. The only way to reduce greenhouse-gas emissions is to “enforce a drastic contraction of production in the industrialized countries.” Such a thing is not possible in capitalism because the affected industries would be committing suicide to agree to this and nobody would promise jobs to those displaced; this could only be carried out through a socialization of industry and a redeployment of labor to sectors that need to be developed for social good.
  • Consumerism and over-consumption are not “cultural” or the result of personal characteristics — they are a natural consequence of capitalism and built into the system. Problems like global warming and other aspects of the world environmental crisis can only be solved on a global level through democratic control of the economy, not by individual consumer choices or by national governments.

Cap-and-trade equals profits by polluting

European attempts to implement “cap and trade” schemes to limit greenhouse-gas emissions were countered from the start by industry lobbyists asking for exceptions because, they argued, they would lose competitiveness, and some threatened to move elsewhere, taking jobs with them. Governments gave in. Polluters and traders took in windfall profits, with no real effect on emissions. Dr. Smith wrote:

“German electricity companies were supposed to receive 3 percent fewer permits than they needed to cover their total emissions between 2005 and 2007, which would have obliged them to cut emissions by that amount, instead the companies got 3 percent more than they needed — a windfall worth about $374 billion at that time.” [page 119]

A proposal to directly tax carbon in France, proposed by the administration of Nicolas Sarkozy, was ruled unconstitutional because most of France’s major polluters would have been let off the hook entirely while households would have assumed the burden. Dr. Smith put the farce of this failed proposal in perspective:

“The court said that more than 1,000 of France’s biggest polluters could have been exempted from the charges, and that 93 percent of industrial emissions would not have been taxed at all. But even if Sarkozy had successfully imposed his carbon tax, this tax would have raised the price of gasoline by just 25 US cents per gallon. Given that the French already pay nearly $9 per gallon for gasoline, it’s hard to see how an additional 25 cents would seriously discourage consumption let alone ‘save the human race.’ ” [page 120]

A part of Moofushi's bleached coral reef (Alifu Dhaalu Atoll, Maldives), damaged by warming sea temperatures.  (Photo by Bruno de Giusti)

A part of Moofushi’s bleached coral reef (Alifu Dhaalu Atoll, Maldives), damaged by warming sea temperatures.
(Photo by Bruno de Giusti)

Some advocates of cap-and-trade or carbon taxes in the United States try to get around industry pushback by advocating they be made “revenue-neutral.” But if “carbon tax offsets are revenue neutral, then they are also ‘impact neutral,’ ” Dr. Smith writes. That brings us back to the reality that imposing drastic cuts would be the only way to effect the significant reductions in greenhouse-gas emissions necessary to prevent catastrophic global warming in coming decades. That, in turn, can’t be done without massive dislocation.

Yet reductions are not only necessary, but will be required by physical limits — the world’s population is using the resources at the rate of 1.5 Earths and the United Nations predicts we’ll be using two Earths by 2030. Moreover, if all the world’s peoples used resources at the rate that the United States does, “we would need 5.3 planets to support all this.” Needless to say, we have only one Earth available.

More efficiency leads to move consumption

One of the pillars on which green capitalists rest their advocacy is increased efficiency of energy usage, achieved through technological innovation. But energy usage has been increasing, not decreasing, despite greater efficiencies wrung out of a range of products. Gains in efficiency can, and frequently are, used to expand production; given that capitalist incentives reward expansion, that is what is done. Moreover, “green” industries are not necessarily green. The “god that failed” paper points out:

“Even when it’s theoretically possible to shift to greener production, given capitalism, as often as not, ‘green’ industries just replace old problems with new problems: So burning down tracts of the Amazon rainforest in order to plant sugarcane to produce organic sugar for Whole Foods or ethanol to feed cars instead of people, is not so green after all. Neither is burning down Indonesian and Malaysian rainforests to plant palm-oil plantations so Britons can tool around London in their obese Landrovers.” [page 128]

Making motor vehicles more fuel-efficient, although a goal that should be pursued, nonetheless falls far short of a solution. Fuel usage from the increasing number of vehicles and longer distances traveled are greater than all the savings from fuel efficiency. And focusing on only when the vehicle is being driven leaves untouched most of the pollution caused by them, Dr. Smith writes:

“Most of the pollution any car will ever cause is generated in the production process before the car even arrives at the showroom — in the production off all the steel, aluminum, copper and other metals, glass, rubber, plastic, paint and other raw materials and inputs that go into every automobile, and in the manufacturing process itself. Cars produce 56 percent of all the pollution they will ever produce before they ever hit the road. … [S]o long as [automakers] are free to produce automobiles without limit more cars will just mean more pollution, even if the cars are hybrids or plug-in electric cars.” [page 131]

Those electric vehicles are only as “clean” as the source of electricity used to power them. Many plug-in electric vehicles are coal-powered vehicles because coal is a common source of electricity. Looking at it holistically, such as an electric vehicle would be more polluting than a gasoline-fueled vehicle; and the majority of the pollution from the manufacturing (for the vehicle itself) would be there just the same. Then there is the pollution and greenhouse-gas emissions of the electric-car battery. Nickel is a primary input; the Russian city that is the site of the world’s largest source of nickel, Norilsk, is one of the world’s most polluted places.

“I would not be surprised if the most ecological cars on the planet today are not those Toyota Priuses or even the Chevy Volts with their estimated [seven- to 10-year] lifespan, but those ancient Fords, Chevrolets, and Oldsmobiles cruising round the streets of Havana. For even if their gas mileage is lower than auto-producer fleet averages today, they were still produced only once, whereas American ‘consumers’ have gone through an average of seven generations of cars since 1960 (when the U.S. embargo ended car imports to Cuba), with all the manufacturing and disposal pollution that entailed.” [page 133]

Consumerism props up capitalist economies

Planned obsolescence is part of the problem, across the spectrum of manufactured products. Capitalist manufacturers don’t want products that last a long time; repeatedly selling new products is far more profitable. But it would be overly simplistic to lay full blame for this on greed, however much greed is rewarded by a capitalist economy. Household consumption — all the things that people buy for personal use from toothbrushes to automobiles — accounts for 60 to 70 percent of gross domestic product in almost all advanced capitalist countries. If people aren’t buying things, the economy struggles.

Proponents of green capitalism fail to grasp the structural causes of over-consumption. However much better for the environment, and the world’s future, drastic reductions in consumerism would be, moral exhortations can’t be effective. Trapped in an idealist mirage that capitalism can be “tamed” or “repurposed,” green capitalists, through seeking individual solutions to structural and systemic problems, not only miss the forest for the trees but leave the economic structure responsible untouched. People in the global North should consume less, but to place the blame on individual behavior lets the manufacturers of useless products off the hook and is blind to the economic realities should the system be left in place intact.

Once again, we can not shop our way out of economic and environmental problems. Even not shopping would bring its own set of problems, Dr. Smith writes:

“[H]ow can we ‘reject consumerism’ when we live in a capitalist economy where, in the case of the United States, more than two-thirds of market sales, and therefore most jobs, depend on direct sales to consumers while most of the rest of the economy, including the infrastructure and not least, the military, is dedicated to propping up this super consumerist ‘American way of life?’ Indeed, most jobs in industrialized countries critically depend not just on consumerism but on ever-increasing overconsumption. We ‘need’ this ever-increasing consumption and waste production because, without growth, capitalist economies collapse and unemployment soars. …

[I]t’s not the culture that drives the economy so much as, overwhelmingly, the economy that drives the culture: It’s the insatiable demands of shareholders that drive corporate producers to maximize sales, therefore to constantly seek out new sales and sources in every corner of the planet, to endlessly invent [new needs]. … ‘[C]onsumerism’ is not just a ‘cultural pattern,’ it’s not just ‘commercial brainwashing’ or an ‘infantile regression.’ … Insatiable consumerism is an everyday requirement of capitalist reproduction, and this drives capitalist invention and imperial expansion. No overconsumption, no growth, no jobs. And no voluntarist ‘cultural transformation’ is going to overcome this fundamental imperative so long as the economic system depends on overconsumption for its day-to-day survival.” [pages 141-142]

There is no way out other than replacing capitalism with a steady-state economy based on meeting human needs, and that could only be attained through bottom-up, democratic control. No one promises new jobs to those who would be displaced under capitalism; logically, then, those who jobs and ability to earn a living is dependent on polluting or wasteful industries resist environmental initiatives. The wholesale changes that are necessary to prevent a global environmental catastrophe can’t be accomplished under the present economic system; it would require a different system with the flexibility to re-deploy labor in large numbers when industries are reduced or eliminated, and one that would have no need to grow. Inequality would have to be eliminated for any kind of global democratic economy to be able to function.

Richard Smith pronounces this “a tall order to be sure.” That it is. But with many world cities, and entire countries, at risk of becoming inhabitable due to rising sea levels, more erratic weather and an accelerated timetable to deplete the world’s resources, what choice do we have? Green capitalism is not only not green, it is worse than illusion because of the false hope it dangles in front of our eyes.

The high cost of new and improved

Planned obsolescence is not a natural phenomenon like the tides. Yet most of us accept it as such. I’ve been forced to think about this because my computer is not long for this world. Eight years ago, it was as up to date as can be. Now, Mac OS 10.3 is evidently one step removed from a stone tablet.

That in itself is a solvable problem. But the friendly and knowledgeable computer person who advised me on new computer options calmly told me that some of my crucial software programs won’t be readable on the latest system. I will have a great many files that will become unreadable (yes, I do back up) without having to cobble together some cumbersome solution.

“New and improved” is marketing gospel. Well, it’s mighty big business — as much as $1 trillion is spent on marketing in the United States alone. People have to buy a whole lot of stuff to justify all the money spent on them to buy it. If products work for a long time, people won’t be moved to buy all that “new and improved” stuff. That’s where planned obsolescence comes in — it’s simply big corporations forcing us to buy new stuff.

Having a new computer isn’t a terrible thing in itself. But having your software be made outdated, thereby rendering many years of writing inaccessible, shouldn’t be the price paid for “progress.” As the friendly and knowledgeable computer person explained just how behind the new and improved times I was, I sighed and said to him, “This is why I don’t like capitalism. It’s all this planned obsolescence.” The computer person, clearly an intelligent person (and working for a quite reputable computer retailer), looked at me totally blankly. He had no idea of what I could be talking about.

To him — and far from him alone — the rapid updating of computer software and hardware was some natural phenomenon, as natural as the tides. I am not arguing here for stasis, nor am I unused to dealing with new computers. Because my original profession, newspaper journalism, was among the first industries to undergo computerization, I’ve been writing on computers since 1978. There were no personal computers then, nor was the concept of “user friendly” yet in existence.

We used highly specialized, balky computers where one had to continually devise methods of getting the machine to do what it was supposed to do but often would not. So I can say I am quite pleased at the advances of the past couple of decades. But continually updating systems so that they become obsolete in a few years is not “new and improved” — it is “let’s make people buy more of our stuff.” What about the many people who can’t afford to keep buying more stuff?

At least the electricity doesn’t have new operating systems

This perpetual consumer arms race is hardly limited to computers, although not necessarily carried as far in other industries. Can you imagine that, needing to replace your decade-old automobile, you go to a dealer, only to find out this year’s new model runs on a different type of fuel, and that you no longer can go to your local gas stations because it won’t run on the same old fuel. Or what if the electricity was changed every few years? Sorry, we’re on a different voltage this year, so all your home’s power sockets are now useless, and you can’t use your lamps or appliances.

Although other industries don’t have the audacity of computer and software makers, a relentless push to induce more consumer purchases is endemic. The weight and size of what we buy is bigger. And it is wrapped up in ever more packaging. The social costs of all this unnecessary consumption are high, and are paid for in environmental destruction.

Here are two statistics that put some perspective on this immense waste:

Add in the immense costs of advertising to induce us to buy stuff we otherwise wouldn’t want or need, and we are talking mountains of waste. Obtaining figures is difficult, but estimates of the money spent on marketing in the U.S. per year range from $460 billion to $1.07 trillion.* Further add in the costs of raw materials, production and transportation, the effects of all this on the environment and the psychological stresses on people continually told they are inadequate with owning the latest gadget, and the impact of new and improved becomes clearer.

All we need is another Earth

Almost all of the world’s higher-income countries, and many lower-income countries, are consuming far beyond Earth’s ability to recuperate. To put this in stark terms, a study by the non-profit group Global Footprint Network estimates that humanity is consuming the equivalent of one and a half earths. The group’s study says:

“This means it now takes the Earth one year and six months to regenerate what we use in a year. Moderate UN scenarios suggest that if current population and consumption trends continue, by the 2030s, we will need the equivalent of two Earths to support us. And of course, we only have one.”

The Living Planet Report 2012, a study produced by WWF–World Wide Fund For Nature in collaboration with the Zoological Society of London and Global Footprint Network, provides country-by-country and region-by-region breakdowns. It finds that the Middle East/Central Asia, Asia-Pacific, North America and European Union regions are each consuming about double their regional biocapacity. Africa and “other Europe” are about even, while Latin America is currently consuming at less than half its biocapacity.

To this it should be added that Africans themselves use less — much of the consumption there (and in other developing areas) is generated by multi-national corporations headquartered in stronger countries. People in poor countries consume minuscule amounts in comparison to the wealthy of the world and the middle classes of the advanced capitalist countries.

The Living Planet Report’s conclusions, despite being frequently couched in moderate language, nonetheless declare that “business as usual” will lead us to disaster:

“Clearly, the current state of human development, based on increased consumption and a reliance on fossil fuels, combined with a growing human population and poor overall management and governance of natural resources, is unsustainable. Many countries and populations already face a number of risks from biodiversity loss, degraded ecosystem services and climate change, including: food, water and energy scarcity; increased vulnerability to natural disasters; health risks; population movements; and resource-driven conflicts.” [page 10]

All those shiny computers and mobile phones — and so many other consumer products produced in every greater numbers — use metals mined from around the world, often under dangerous conditions. Many of these products are assembled under brutal sweatshop conditions. The environmental damage from moving all these raw materials, manufactured parts and finished products around the world is enormous, and increasing as more destructive and capital-intensive technologies are necessary to extract less accessible resources. We tend to not think about these costs.

“New and improved” is of human creation. If it were as natural as the tides, there wouldn’t be advertising bombarding us everywhere we turn. We have only one Earth and, for now, the rest of the universe is out of our grasp. In a satirical short story written by the science fiction author Stanisław Lem, space-faring marketers set off a series of supernovas that, from Earth, align in the night sky to spell out the name of the product they were promoting. Imagine the budget for that campaign!

And imagine life forms on the planets orbiting those exploded stars — would our morals be so low as to destroy all life on multiple planets to advertise a product? Surely they would not. Yet we seem to be on a course to destroy life on this planet for the sake of short-term corporate profits. Is new and improved really that important?

* The former estimate (from 2008) from Charles W. Lamb, Joseph F. Hair, Jr., Carl McDaniel, Marketing [South-Western Cengage Learning, Mason City, Ohio, USA, 2009]; the latter estimate (from 2005) from the Metrics 2.0: Business & Market Intelligence web site.