Climate Action & Economic Growth Balance the Scales

The benchmark year for calculating the global rise in temperatures is 1850, roughly when industrialisation began to spread in Europe. Machines like steam engines and power looms revolutionised the industry. Surplus production meant surplus wealth. With the spread of capitalistic values in society, government intervention in the market was minimised and the roles of individuals increased. For individuals, profit motive is paramount and amassing of wealth is the goal of all enterprise. But in all this, climate didn’t make it to the list of our priorities. The result was Climate Change. Any further neglect may cost us our lives

It has taken a long time for the world to finally wake up and notice that climate change is real and happening in real-time. It is not a distant possibility anymore but a grave threat we face today. The conversation surrounding climate change has moved outside of conference halls and global echo chambers into the front page of the newspapers. The resulting noise has put the spotlight on accountability on the authorities. People are also catching up with the trend and trying to support environment-friendly practices. But the pressure for climate action has also given rise to flaky promises and half-hearted actions from those in power.
Greenwashing is the latest fad that Climate Change has given rise to. It shows how businesses are adapting to protect their interests by performing tokenistic gestures towards climate action. But the truth remains that we need a structural overhaul to make a perceptible dent into the accelerating vehicle of climate change. We need to fight capitalism and climate change to save the planet.

Economic growth fuelling Climate Change

The World Inequalities Report 2022 comments on carbon inequality around the world. The rich nations with high Gross Domestic Product (GDP) are invariably the ones with maximum Greenhouse Gas (GHG) emissions, while the poorer nations have lesser emissions. According to Emissions Gap Report 2022, China, USA and India are the top three countries with the highest GHG emissions. But to be fair, the populations of China and India are much bigger than the USA. Moreover, China overtook USA as the highest emitter only in the early 21st century. Its emissions have grown in tandem with the economy. As far as per capita emissions are concerned, USA is still at the top followed by Russia and China.
Even within countries, there is inequality in per capita carbon emissions amongst different economic groups. For instance, in India, while the average GHG footprint of the whole population is 2.2 tCO2e/capita, the top 1 per cent produces 32.4 tCO2e/capita, and the bottom 50 per cent produces 1.0 tCO2e/capita.
Clearly, global trends suggest that the biggest contributors to climate change are also the richer ones of the world. So, all of this begs the question – can a capitalistic society really afford to take actions that genuinely and drastically cut emissions and, in turn, limit economic growth as we know it today?
Lord Nicholas Stern, IG Patel Chair of Economics and Government, London School of Economics, co-chaired the Independent High-Level Expert Group on Climate Change at COP27, has acknowledged a clear-cut relation between economics and climate change. In an interview published in the Times of India, he said, “The challenge before us now is achieving strong, systemic change in a short period of time. This involves fundamental structural shifts in the big systems of energy, transport, cities and land. It demands very rapid technical progress and driving down cost curves through scale and discovery. On the whole, economics has looked at small changes so far and not at such huge systemic transformations.”

Eco-friendly is now fashionable

It is difficult to expect much from private enterprises or international climate summits when Coca-Cola, known as the worst plastic polluter for the past five years, is one of the sponsors of the 27th Conference of Parties (COP27) being held in Egypt. This kind of hypocrisy has been termed ‘greenwashing’, where businesses promote sustainability via smart marketing techniques. In another instance of greenwashing, Mc Donalds introduced paper straws in 2019 which turned out to be non-recyclable. Let’s come closer home to India. Nestled in the concrete jungles of Noida and Gurgaon, there are multiple real estate with ‘green’ and ‘forest’ as a suffix. Stamps of ‘eco-friendly’, ‘sustainable’ and ‘100% natural’ on plastic non-biodegradable plastic packaging are all too common now.
Governments find themselves under pressure to take the climate seriously while also keeping up the GDP growth of the nation. They have floated ideas such as carbon taxing, planting trees, subsidising renewable energy, promoting EVs, etc. All of this conveniently fits into the status quo and gets manoeuvred around by big businesses, which still get away with continuing harmful practices on a large scale.
The problem with such reforms is that profit remains the priority of private enterprises, which will always find ways to circumvent such regulations. We need governments that don’t shy away from taking unpopular decisions, which may even seem antithetical to the ‘ease of doing business’ model. Keeping the global rise in temperatures below 1.5 degree Celsius before 2030 (according to the famous Paris Agreement in 2015) is a longshot but still manageable target. But only if we take drastic measures and completely restructure our present economic model.
A socio-economic restructuring, in real terms, can only be brought about through an iron-strong collective political will. Governments, state actors and bureaucracies have the agency needed for this restructuring. Governments around the world today aren’t behaving any differently from privately owned businesses. The measures being proposed by the states are mainly owing to international pressures and changing public perception towards climate change, not because it is a need of the hour. Policies for Climate Action need to be impact-oriented. We need more climate accountability from government policies and businesses alike.

Climate Finance – a beginning for change

There is no doubt that the few wealthy nations of the world owe the rest of the world for the damage they caused in terms of historical emissions. The demand for compensatory funds by developing countries is justified and needs to be met. We must understand that Climate Action is an expensive but essential business. We must come to terms with the fact that true Climate Action will take a toll on GDP and economic growth. Only a radical change can save the planet.

Greenwashing is the latest fad that Climate Change has given rise to. It shows how businesses are adapting to protect their interests by performing tokenistic gestures towards climate action. But the truth remains that we need a structural overhaul to make a perceptible dent into the accelerating vehicle of climate change. We need to fight capitalism and climate change to save the planet