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.
Rather, these crises are part of the same fundamental transition to a new era characterized by inefficient fossil fuel production and the escalating costs of climate change. Conventional capitalist economic thinking can no longer explain, predict, or solve the workings of the global economy in this new age, the paper says.
“Economies have used up the capacity of planetary ecosystems to handle the waste generated by energy and material use”
The amount of energy we can extract, compared to the energy we are using to extract it, is decreasing “across the spectrum — unconventional oils, nuclear and renewables return less energy in generation than conventional oils, whose production has peaked — and societies need to abandon fossil fuels because of their impact on the climate,” the paper states.
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.
In the meantime, our hunger for energy is driving what the paper refers to as “sink costs.” The greater our energy and material use, the more waste we generate, and so the greater the environmental costs. Though they can be ignored for a while, eventually those environmental costs translate directly into economic costs as it becomes more difficult to ignore their impacts on our societies.
And the biggest “sink cost,” of course, is climate change.
“We face a form of capitalism that has hardened its focus to short-term profit maximization with little or no apparent interest in social good.”