Why is the incorporation of economic theory into the climate action movement important?

By Todd Olive, GLOBUS Editor-in-Chief

As this correspondent has, so far this series, intended to demonstrate, economics is a fundamentally flawed – even failing – discipline, that nevertheless can be co-opted to understand, encourage and deploy positive solutions for combatting the climate emergency. In contrast to activists such as Naomi Klein, who would argue that the overthrowing of conventional economics is critical to addressing ongoing environmental degradation, this correspondent would now like to suggest that the co-opting of economic policy, in alliance with activist thinking, will be critical to succeeding in the climate fight.

The most important ground for this is in addressing the disconnect between policymaking and on-the-ground thinking.

Extinction Rebellion, featured all over the UK’s press following a week of protests that closed four major London landmarks for days, disrupting road and rail infrastructure in the process (Taylor & Gayle, 2019), are demanding net zero greenhouse gas emissions by 2025 (Extinction Rebellion, n.d.). While they might argue that systemic change in lifestyles – through such channels as the elimination of consumerist habits and reductions in air travel – is necessary to combat climate change, there is no reason to suggest that this could not be achieved, at least partially, by economic systems. A luxury goods tax? A doubling, or more, of air passenger duty – or a banning of airport expansions nationwide? Post-Brexit, assuming that EU rules on state aid are in some way relaxed, tax incentives for producers of foodstuffs commonly imported by air? By creating policy in this way, with effective strategic decisions made to support the environmental agenda, we can adopt economic thinking to support the sustainability agenda.

As alluded to in the previous piece, incorporating sound economic thinking and policymaking into environmental campaigns is also critical in building effective cross-partisan alliances for climate action. If conventionally right-wing political groupings, often held responsible for blocking environmental action, can be pitched the multiplier effect derived from consumer savings on lower energy bills, or the ‘nationalistic’ benefit of energy security from a renewable electricity supply, then political climate action globally suddenly becomes a question of “when do we start?”

The deployment of macroeconomic incentives, rather than encouraging individuals to make ‘solo change’, also means that every household has far fewer grounds for inaction. If unsustainable, plastic-packaged vegetables flown in from sunnier climates abroad suddenly become twice as expensive – provided that, for example, the locally-grown alternative is sustainably produced – then your average weekly shopper is going to think twice about their choices far more easily. This is a very simplistic example. However, it is intended to demonstrate how this kind of incentivising policy action can make sustainable living the easy, or even default option. Along similar lines, the use of macroeconomic policy in complement with effective education and communication strategies also assists in momentum-building: if individuals see government-enacted economic incentives backing up that which they hear regarding sustainable decision-making, the moral impetus and crowd mentality supporting the aligning of their decision-making with the sustainability agenda is much greater.

Are there any problems with this approach?

There are, inevitably, challenges with this approach that need to be addressed: this correspondent identifies four.

Two of these could perhaps be considered more of a philosophical nature: how appropriate profit is as a motive for positive change, and whether private ownership of the technologies that may be required to avert climate catastrophe is ethical. This correspondent’s response to these questions is borne more out of necessity and urgency than of a solid moral philosophy: if the profit incentive, and private ‘trademarking’ (to facilitate private innovation), are necessary for successful climate action, then they are, for the time being, a necessary evil – under the initial assumption that they are, indeed, ethically reprehensible. That question, however, is for another time, and another correspondent.

The most practical of these four problems, occurring in the context of innovation and renewable energies, is in the extraction of minerals required to manufacture these technologies. While these technologies might hold the key to freeing demand for energy from greenhouse gas emissions, they require extensive use of resources such as cobalt and lithium. This poses a number of challenges. From a geopolitical perspective, ‘resource security’: America, for example, relies on imports for 70% of lithium, and imports and releases from its National Defence Stockpile for 75-80% of its cobalt (The Economist, 2018). From a far more important, human perspective, these geopolitical issues could contribute to implicit support, or simply a lack of condemnation, for the deplorable social issues that pervade the nations that currently produce these resources: for example, corruption, extreme poverty and child labour in the Democratic Republic of Congo, the world’s largest supply of cobalt, not to mention associated environmental pollution (Conca, 2018).

The fourth problem is similar in character to this latter problem: activist thinking with economic acting doesn’t address other social injustices that are present in the economic system. Do transnational corporations abuse their power in predator monopolies for goods, by exploiting workers’ rights, or by undermining systems of local and national taxation? Do economies in the Global North take advantage of soft financial power to force trade liberalisation on vulnerable export-oriented economies in the Global South? How do we address compound economic injustices, such as pay gaps, within and between nations, races, religions, genders, and beyond?

In conclusion?

The problems outlined here are by no means small, and this correspondent will be the first to concede that economics has failed in – or is incapable of – addressing them. Nor, indeed, are they the only problems to befall this correspondent’s chosen discipline – others have documented more, and will continue to do so.

Our climate emergency is here, and it’s now. While  the assertion that we must work inside, and with, the prevailing economic systems, would no doubt encounter opposition in activist movements, this correspondent would argue that it is the only remaining practical solution available to us: if sufficient momentum could have been gathered, say, thirty years ago, then perhaps there would have been the time and opportunity for a radical overhaul of the economic system, and the way we behave. As things stand, we must make the best use of the options available to us.

We must facilitate innovation, by providing strong financial and regulatory support for innovative practices and research institutions. We must strengthen antitrust regulations and consumer sovereignty over environmental practices, ensuring that companies are held to account for the way that they govern the environmental impact of their activity by empowering regulators and consumers to guide the way to best practices. Finally, we must ensure effective education and communication regarding ‘green decision-making’, that seeks to build a collaborative, coalitionist approach to tackling humanity’s greatest threat. We are all, after all, in this fight: together.

Header Image: Photo by Annie Spratt on Unsplash

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