Timely reforms

The time for modest reforms is long past. A radical cut in carbon emissions can’t be accomplished simply by banning drinking straws, ramping up production of electric cars, or even planting a billion trees. To meet the climate-change challenge will require a transformation comparable to the agrarian or industrial revolutions. But if those earlier system changes are guideposts, the losers of this next great leap forward will be legion.

Various ‘just transition’ proposals are designed, at least on paper, to avoid such an enormous human toll. For a start, a ‘fair-share’ approach would require the transfer of trillions of dollars to help the Global South keep fossil fuels in the ground while shifting to renewable energy. A similar approach within nations would provide the ‘losers of transition’ – from coal miners to those on fixed incomes – with targeted assistance to ‘go green’.

Alas, such an approach runs counter to current practices. In response to the Covid-19 pandemic, for instance, the international community did not implement a ‘fair share’ approach. The wealthiest countries largely cornered the market on vaccines, and poorer countries have had to rely on a trickle of handouts. Moreover, despite the unprecedented opportunity provided by the Covid crisis to begin to act on the next coming disaster, climate change, governments have generally failed to allocate recovery funds to finance any kind of major economic transformation. In the $1.9 trillion American Rescue Plan of 2021, for example, a mere $50 million went to environmental-justice grants, while $8 billion went to airports. Similarly, fully one-tenth of the $1 trillion infrastructure bill now making its way (or not) through Congress is devoted to improvements to roads and bridges, which will only reinforce America’s love affair with cars, SUVs, and trucks.

And where is the necessary shift of resources to the Global South to help with its transition? Back in 2009, rich countries had already promised to mobilize $100 billion for such climate financing by 2020. They’re still $20 billion short and the assistance has come mostly in the form of loans, not grants, only deepening the dependence and indebtedness of the Global South.

Worse yet, richer countries have been at least modestly reducing their own carbon footprints at the expense of poorer countries by relocating polluting industries to the Global South or substituting carbon-intensive imports for domestic production of the same. Although China continues to boost its share of domestic renewable sources of energy, it’s been financing 70% of all coal-fired power plants built globally (though its leader, Xi Jinping, recently pledged to end this practice). The European Union is actually phasing out coal power – which China is emphatically not doing – even as it continues to rely on high-carbon imports from coal-using countries like Russia, Turkey, Morocco, and Egypt.

To combat such a shift of carbon emissions from north to south – and protect its own less carbon-intensive industries – the European Union has proposed a Carbon Border Adjustment Mechanism, which penalizes imports of cement, fertilizer, steel, and the like based on the amount of carbon emitted in their production. Hitting Russia the hardest, this tariff would indeed push that country toward a “greener” manufacturing process for its Europe-bound products. However, countries in the Global South that don’t have the resources to upgrade their export industries would be left out in the cold.

This lack of resources in the Global South is compounded by debt. The poorest nations are devoting nearly $3 billion a month to servicing their debts, diverting resources that could otherwise go into a transformation of energy and industrial infrastructure. Bridging this divide would require large-scale debt forgiveness; equitable debt-for-climate swaps; or, more ambitiously, an Organization for Emergency Environmental Cooperation that would marshal trillions of dollars in public financing to pay for the entire world to transition to clean energy.

Here, the experience of Eastern Europe is relevant. The European Union’s transfer of resources, training, and technology from west to east helped cushion the transition that so devastated Russia. Although not enough to prevent the rise of Eastern Europe B, the EU’s modest generosity at least gestured toward the kind of solidarity economics that the Global North needs to adopt in any future climate negotiations with the Global South. If there is to be belt-tightening to shrink the global carbon footprint, those who can most afford to lose the weight should step forward.

Such schemes address the all-important question of equity. But there’s an elephant in the room that’s so far gone unmentioned. And that beast is only getting bigger.

All the major transformations of the past were predicated on rapid economic growth, whether the increasing food production of the agrarian revolution or the incorporation of the Soviet Union into the industrialized world through its Five-Year Plans. Most versions of the Green New Deal adhere to the same growth paradigm, with electric cars filling the roads and more sustainably produced widgets circulating through the global economy.

Even as richer countries promise to shrink their carbon footprints, however, they still imagine that they can maintain their overall way of life and export that lifestyle to the rest of the world. But this high-energy lifestyle of computers, air conditioners, and electric SUVs depends on the Global South. By one estimate, the Global North enjoys a $2.2 trillion annual benefit in the form of underpriced labor and commodities from there, an extraction that rivals the magnitude of the colonial era. Moreover, the cobalt and lithium necessary for batteries for electric cars, the gallium and tellurium in solar panels, the rare-earth elements needed for wind turbines are predominantly mined in the Global South and their extraction is likely to come at a huge environmental cost.

The high-growth assumptions of the current system reappear under the rubric of ‘Green growth’, promulgated by old-style industrialists in new Green clothing. During the transition from communism in the 1990s, ‘red capitalists’ were well-placed in the old system to profit under the new dispensation. Today, a class of ‘green capitalists’ have similarly emerged to enjoy huge profits from the early days of a putatively post-carbon economy – Elon Musk in the world of electric cars, billionaires like Robin Zeng and Huang Shilin with lithium-ion batteries, and Aloys Wobben when it comes to wind turbines. Huge sums of money are now available for the sketchiest of projects, from ‘blue hydrogen’ to the sea-bed mining of rare-earth minerals.

Excerpted: ‘Climate-Change Transition in the Age of the Billionaire’

Counterpunch.org