A New Economic System For A World In Rapid Disintegration


socialismtruth-out.org. September 2016. We live in ominously dangerous times. The world capitalist system — having fueled colonialism, imperialism and the constant intensification of labor power exploitation for roughly 500 years — now threatens the planet with an ecological collapse of unprecedented proportions. Unsustainable resource exploitation, water pollution (the transformation of lakes, rivers and oceans into garbage dumps) and massive economic inequality are at the root of the possibly irreversible collapse of industrial civilization. Meanwhile, however, too many of us remain caught up in abstract and ahistorical predictions of collapse that fail to offer an alternative realistic vision of a future socio-economic order.

Simultaneously, the phenomenon of global warming, driven mainly by the dynamics and contradictions of a fossil-based economy, has prepared the soil for the eruption of new sources of conflict with the manifestation of historically unique destabilizing social forces. Climate change directly threatens billions of people and most other beings — besides the occasional cockroach, diadem or tardigrade — with outright extinction brought on by droughts, floods and other “natural” disasters.

Nonetheless, the catastrophic scenario sketched out behind the operations of global capitalism does not merely represent the other side of a wild socio-economic system bent on constant and abstract growth in pursuit of ever greater rates of profit. The so-called Golden Age of capitalism ended decades ago and the system has now run into a brick wall, as it appears to have reached a point where it is no longer capable of sustaining a constant momentum of growth to keep the economy reproducing itself at a pace that generates higher standards of living for the next generation.

Indeed, the productivity rates in the advanced industrialized regions of the world (such as the US, Europe and Japan) since the eruption of the financial crisis of 2007-08 are far slower than those of previous decades, thereby confirming the claims of various experts who argue that we have reached the end of the age of growth.

Moreover, in spite of all the talk about the marvelous and awe-inspiring accomplishments of the high-tech revolution, these innovations pale in comparison to the innovations of the Industrial Revolution. The new technologies reach billions of people, generating mythical fortunes for founders and investors, but increasingly employ only a handful of privileged workers. In the meantime, the problems of massive unemployment, increased inequality, growing economic insecurity, and dangerous levels of public and corporate debt are mounting.

In this context, the present crisis facing the world economy as a whole “consists precisely in the fact,” as Antonio Gramsci put it in his Prison Notebooks, “that the old is dying and the new cannot be born,” and all of the above represent the “morbid symptoms” of this antinomy that the great Italian revolutionary underscored as being part of this interregnum. Read more

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Avoiding Extinction: The Way Out Of Climate Change


Chichil

Professor Graciela Chichilnisky

For the first time ever, humans are dominating planet Earth. We are changing the basic metabolism of the planet: the composition of gases in the atmosphere, its bodies of water, and the complex web of species that makes life on Earth. What will come next?

We see that the changes we are precipitating in the atmosphere are fundamental and can lead to disruptions in climate and global warming. Both the North and the South Poles are melting. Water expands when it is heated. Since the seas are warming, sea level is rising all over the world. This irrevocable upward trend is well documented: slowly but surely the rising waters will sink most island states. There are 43 island states in the United Nations representing about 23% of the global vote and most or all could disappear soon under the warming seas.

The current shift in climate patterns threatens many species. It has allowed for the spread of insects that are migrating to areas they did not previously inhabit, bringing with them a variety of vector- borne illnesses. For example, new outbreaks of malaria in Africa are on the rise. Humans are also shifting ground. The UN reports that 21 million people are reportedly migrating due to drought and other climate change induced conditions, and the numbers are increasing rapidly (http://newsroom.unfccc.int/unfccc-newsroom/human-mobility-and-the-paris-agreement/). The 2014 migration of one million people into the EU is causing considerable political stress leading to anti-immigration candidates in German, UK, and US elections, and some anticipate that it could damage the fabric of Western democracy.

In the U.S., the consequences are less extreme but still evident: the mighty Colorado River is drying up, prompting orders to turn off farm water in several states. Lake Mead’s waters in Nevada are exhibiting record lows, threatening the main supply of water to Las Vegas. Wild fires from drought conditions have multiplied and have spread rapidly around the region and in California since 2006.

The world is aware of the connection that scientists postulate between climate change and the use of fossil energy. The largest segment of carbon emissions, about 45% of the global emissions of CO2, originate in the world’s power plant infrastructure, 87% of which are fossil fuel plants that produce the overwhelming majority of the world’s electricity. This power plant infrastructure represents a value worth $45-55 trillion according to the International Energy Agency (IEA), which is about the scope of the world’s economic output. New forms of clean energy are emerging, such as wind farms in Scotland and solar farms in Spain and the US, in an attempt to forestall carbon emissions. But the process is necessarily slow since the world’s fossil power plant infrastructure is comparable in monetary value to the world’s entire GDP, and changing this infrastructure can take decades. Transforming the power plant infrastructure is too slow to avert the potential catastrophes that are anticipated in the next 10–20 years. What is the solution?

Below I propose a realistic plan that involves market solutions in industrial and developing nations which will simultaneously resolve the problems of economic development and climate change and the global climate negotiations. But climate change is just one of several global environmental areas that are in crisis today. Biodiversity is another; industrialization and climate warming threaten the world’s ecosystems. Endangered species include sea-mammals, birds such as cockatoos, polar bears, and marine life such as coral, saw-fish, whales, sharks, dogfish, sea turtles, skates, grouper, seals, rays, bass, elephants, and even primates, our cousins in evolution. Scientists know that we are in the midst of the sixth largest extinction of biodiversity in the history of our planet, and that the scope of extinction is so large that 75% of all known species are at risk today. The UN Millennium Report documents rates of extinction at 1,000 times higher than fossil records. The current extinction event is the largest following the dinosaurs’ extinction that took place 60 to 65 million years ago. But today’s extinction event is unique in that it is caused by human activity. And it puts our own species at risk. There is a warning signal worth bringing up: all major recorded planetary extinctions were related to changes in climate conditions. Through industrialization we have created environmental conditions that could threaten our own species’ survival. 99.9% of all species that ever existed are now extinct.

Are we next?

Will humans survive?

The issue now is how to avoid extinction. Read more

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Can Economics Value Human Survival? ~ An Interview With Graciela Chichilnisky


ChichilniskyClimate change threatens human survival and the existing economic arrangements and values are directly responsible for this sad state of affairs, argues Graciela Chichilnisky, author of the Kyoto Protocol Carbon Market and a world authority on climate change, in the interview that follows. Moreover, Professor Chichilnisky thinks that a new global economy based on “green capitalism” is not only possible but absolutely essential for the future of the planet. Graciela Chichilnisky is Professor of Economics and of Statistics at Columbia University, Visiting Professor of Economics at Stanford, and co-founder and CEO of Global Thermostat.

Marcus Rolle: Professor Chichilnisky, can you discuss what might be some of the long-term effects of climate change on global economic activity?

Graciela Chichilnisky: The effects of climate change on global economic activity are profound and widespread and can be counted in the trillions of dollars, including losses of property from flooding, droughts and fires and other catastrophic events such as typhoons and tornadoes that have become more intense, more frequent and more volatile due to a warmer atmosphere and hydrosphere, which contain more energy. Think of New York City with three Sandy Superstorms per year. Firms and schools will be closed for most of the year, the police will be out of action, there will be no electricity, cars will be floating in the streets, etc. In sum, New York will not be a working city. The effects are incalculable. But the problem is larger than the dollar value of storms and floods and weather events because of the hundreds of millions or billions of lives that are either ruined or lost and the incalculable damage done to our political and social institutions and structures that make up the fabric of human civilization.

MR: There are several studies indicating that global warming impacts adversely on productivity and impacts negatively on global GNP per capita.  Aren’t we throwing money around by not addressing global warming?

GC: Climate change will have indeed serious adverse effects on the economy and, in a recent OECD study, the value of losses of property in the world’s leading cities alone are in the trillions of dollars, including those in Miami Florida and Shanghai China. So, in this sense, we are definitely throwing money around. In reality, however, the whole concept of GDP and of economic value that we use today is suspect and many expect it to change sometime soon. I do.

MR: Developing countries are most likely to absorb much of the losses caused by climate change. If so, how will this development impact on migration flows to developed countries?

GC: I believe that among the first and worst effects of climate change that we will witness will be massive migration movements of tens or even up to hundreds of millions of people from poor nations badly affected by climate change into rich nations and, subsequently, the manifestation of extremist political processes in the latter nations as a result of these migration waves. Indeed, the process has already started, and, the war in Syria, which caused the massive migration of over 1million people into Europe, came in the aftermath of an unprecedented in terms of severity four-year drought that left millions desperate, with no jobs, food, or hope, forcing them in turn to flee for their lives. These unprecedented migration waves of refugees have already led, as I predicted in an earlier article, to political extremism both in Europe and the United States.   Brexit is perhaps the most direct and explicit consequence of these developments, but there are others as well. We are witnessing the direct political consequences of radical extremism on the political stage in Europe and the United States right now. Climate change means that this pattern will continue and amplify and it can easily lead to the destruction of Western democratic values and of our most important governance institutions. This, in my view, is one of the most immediate, direct, dangerous and destructive effect of climate change as our entire social fabric and institutions, the very foundations of human societies as we know them, are at risk. All this can happen — and is in fact already happening very quickly –, and it can be, and probably will be, devastating to human societies. Humans will not disappear and become extinct without violence and conflicts and wars can be expected. Of course, most people have trouble imagining how this will develop as the physical survival of some human groups is still likely, but not when it comes to human civilization itself if the trend continues and prevails. Think of the follow-up effect of the massive asteroid that is believed to have hit Mexico about 60 million years ago and to have led to the disappearance of the dinosaurs, which were a globally dominant species at the time as we are now. Massive dust clouds stopped sun rays and the earths’ main source of energy. Millions perished. It is generally thought that the dinosaurs who could fly and overcame the lethal dust created by the impact of the asteroid are now still around and can be seen as birds, for example chickens. Will humans become the chickens of the future? Possibly. Read more

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Combatting Climate Change Requires A Transition To New Economic Values: An Interview With Graciela Chichilnisky


ChichilniskyClimate change represents the greatest threat facing humankind. Yet, not only is very little being done to combat the climate change threat, but there are still vocal climate change deniers around us, some of whom are even running for the presidency of the United States. Moreover, there seems to be confusion about the most effective ways to combat climate change. The latest effort by global leaders to address the problem of climate change, as reflected in the Paris Agreement of late 2015, falls short of implementing the necessary steps to save the planet.

But this begs the question. What are the necessary steps that need to be taken to prevent a catastrophic climate change scenario? In this exclusive interview for Rozenberg Quarterly, world renowned economist and climate change authority Graciela Chichilnisky discusses the nature of the problem of climate change, highlights what is at stake, and argues cogently what should be done to save the planet.

Professor Chichilnisky, it is widely known that climate change can be caused by both natural variations and human activity. Is the climate change being observed today due to natural variations or are its causes to be found in human activities and greenhouse gas emissions?
Scientists all over the world are in agreement that the climate variations we observe today are due to a global change in climate, and that increased greenhouse gases in the atmosphere from human activity, particularly the burning of fossil fuels since 1945, are responsible for climate change. This is not a gentle warming trend, it is the melting of the North and the South poles, and a confirmed rising level of the oceans worldwide that will engulf large areas of the planet, and include 43 island nations states.

In the United States, virtually all leading Republican figures, including Donald Trump, who has already wrapped up the Republican nomination, argue that climate change is based in pseudo-science. What’s going in here? Are Republicans so out of touch with reality, or are they simply interested in protecting vested interests in the fossil fuel economy?
The Republican party is conservative by nature and resists change, even the acknowledgment of the need for change. This is a natural human response. Denial is known to be the first psychological response to a traumatic event, and climate change is potentially catastrophic. Denial is a natural first response and can take the form of denouncing climate science as pseudo-science. However understandable the reaction may be, we cannot remain mired in the first response to a traumatic event, and need action. It is now possible to take action as there are technologies that can remove the carbon that is already in the atmosphere in an affordable way, and this is needed now to avert catastrophic climate change. But it requires moving from the stages of denial and anger to the stage of acceptance. Then we can take action and create global policy as needed.

However, there are some scientists and former astronauts who claim that NASA’s studies of climate change, for example, are based in highly complex models which have proven highly inadequate in the last. Any comments on this?
Indeed, climate models are recent scientific developments and they are complex. This is true. Nobody can predict the weather exactly for example. But the scientific evidence for the overall climate change trend is now overwhelming accepted by most scientific bodies, including the IPCC which is the UN scientific body consisting of thousands of scientists from all over the world, and nobody debates that. Read more

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There Is A Solution To Climate Change ~ And It Is Carbon Negative Technology


ChichilniskyClimate change poses the greatest threat to human civilization as we know it. Yet, governments around the world are reluctant to take drastic action to avert a climate change catastrophe even though we have the means to do so, as I will point out in the latter part of this essay.

But let’s take things from the start and look at the latest attempt of the part of the world’s governments to redress the problem of climate change, i.e., the Paris Agreement of late 2015.

In contrast to the Kyoto Protocol, whose provisions run out in 2020, the Paris deal includes no legally binding carbon dioxide emissions limits. There are no mandatory emission limits and no mandatory payments to help poor nations develop clean energy technologies, nor to mitigate the damages caused by climate change on poor nations, when the damage was historically caused by the rich nations. Mandatory emissions limits are necessary for the carbon market to operate. What is traded in the carbon market is the right to exceed one’s mandatory limits. With no mandatory limits, there can be no carbon market. The entire world is clamoring for a “price on carbon”: this is the carbon market.  The six largest oil and gas companies in the world publicly support a price on carbon (Including Shell, BP, Statoil, Total and Engie). Yet the Paris Agreement undermines the very foundation for a price on carbon by requiring no mandatory emission limits.

Why did the Paris climate change negotiations move away from mandatory targets on carbon emissions and adopted instead a voluntary approach to the climate change challenge?  Because a legally binding treaty that needed ratification by governments back home would have reduced substantially the chances of reaching any kind of an agreement.

This is certainly the case for one of the world’s biggest polluters, i.e., the United States. Any treaty on climate change that made its way to Capitol Hill would be shredded into pieces by the Republican-controlled Congress.

However, as time goes by, it is certain that more and more people will realize that the political compromise made in Paris over mandatory emissions comes at a great cost.  Our ability to control rising temperatures caused by carbon dioxide accumulated in the air is greatly hindered since voluntary agreements guarantee failure.

But there is more. As the latest Intergovernmental Panel on Climate Change report points out, carbon emission cuts are not enough to slow down global warming. According to IPCC, we are headed with certainty towards an increase in temperatures by three degrees Celsius by 2100, although there are scientists who believe that two degrees of warming is “a recipe for disaster.” It suffices to recall the superstorm Sandy that closed down New York City for weeks, with flooded subways, leaving entire neighbourhoods without electricity, no schools, no law enforcement, and automobiles floating in the streets of this proud city. Climate change means an increase in the frequency and severity of such climate events. This means three or four Superstorm Sandies every year in New York, and the city cannot survive such climate change.

In addition to reducing drastically emissions through mandatory limits and adopting clean energy systems, it is now imperative that we utilize negative carbon technologies to remove existing carbon dioxide from the air. This was required by the IPCC, the scientific foundation of the climate negotiations, in its November 2014 5th Assessment Report. We procrastinated too much and now we have to massively reduce the CO2 that is already in the atmosphere in addition to reducing emissions. There are carbon negative technologies in Silicon Valley, like those employed by Global Thermostat, that are operating at SRI in Menlo Park California, which can offer a solution to the greatest threat facing the future of human civilization as we know it. This requires that we accept mandatory emission limits and reactivate the carbon market that is based on mandatory emissions, and was trading $175Bn/year by 2011.

The funding from the carbon market suffices to implement and scale up carbon removal around the world, as the IPCC requires, for example through carbon negative carbon plants that clean the atmosphere while they produce electricity- and do all of this in a low cost and profitable fashion. A proposal made by the author in Copenhagen COP15 was to use the Kyoto carbon market to offer finance to scale up globally such carbon negative carbon plants in poor nations, thus providing electricity that is needed by 1,3 Bn people around the world that currently have no access to electricity, all this while cleaning the planet’s atmosphere. This was called the Green Power Fund and required $200Bn/year for building carbon negative power plants; instead the Green Climate Fund  was made into law, changing one word in its title and severing its connection from the source of funding, the carbon market of the Kyoto Protocol.

The reason the Climate Fund had its connection severed from its very source of funding, the carbon market of the Kyoto Protocol, was none other than the insistence of the US Congress – through its unanimously voted Byrd-Hagel Act —  that there be no mandatory emissions limits.

But there is technology that can remove carbon from the atmosphere as required by IPCC. It is already operating in the Silicon Valley.

The carbon negative technologies in Silicon Valley, like those  employed by Global Thermostat, which are fundamentally different from the now defunct carbon capturing and storing technologies, can offer a potential solution to the greatest  threat facing the future of human civilization as we know it.

Such technologies, if employed on a global scale, can be used to clean the air from carbon dioxide, acting like trees do but much faster, as is needed now. Moreover, they are quite inexpensive and offer the potential of financial rewards, thus making them an attractive incentive to investors and enterpreneurs since, again, the logic of the global economy is not going to change overnight and we certainly cannot wait for the materialization of the “ideal society” for the planet and the future of human civilization to be saved.

At the same time, this is not to suggest that technology is magic. Technology does not exist in a vacuum nor can it be expected to be our robotic slave. We need to change today’s global financial institutions and the prevailing economic values as well. Economic values decide what is meant by economic  progress. Today, economic values are based on short-sighted goals and on individualistic markets that defy logic, since they assign no value to clean air, to clean water or to biodiversity on which human survival depends. Assigning no value to the global commons–clean water, clean air, and biodiversity–leads to actions that threaten human survival. This has to change and can change. In the new Anthropocene era, humans are the most important geological force on the planet, and only with the right economic values can humankind survive.

Graciela Chichilnisky is Professor of Economics and of Statistics at Columbia University, Visiting Professor of Economics at Stanford University, Founder and CEO of Global Thermostat, and the architect of the Kyoto Protocol Carbon Market. www.chichilnisky.com

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Climate Change: The Mother Of All Geopolitical Challenges ~ Interview With Graciela Chichilnisky


ChichilniskyIn this interview, Graciela Chichilnisky, a world leading economist and one of the major climate change forces in our era, talks about the reality of climate change science, the reasons why some corporate interests continue to deny the facts about it, and explains why climate change may represent the greatest geopolitical challenge facing humanity.  

Marcus Rolle: Despite the international scientific community’s consensus on climate change, there are still people who deny that climate change exists or that it is caused by human activity. In fact, some of those naysayers have been funded by corporate interests such as ExxonMobil, as revealed by Exxon’s former in-houses climate change expert Lenny Bernstein. However, the evidence for global warming is overwhelming. Why, specifically, are some corporate interests bent on hiding the truth about climate change, and what’s your opinion on the effects of global warming?

Graciela Chichilnisky: Some of the naysayers have been funded by corporate interests as was revealed by Lenny Bernstein, the in-house climate change expert of Exxon. Lenny fought me tooth and nail in Kyoto during December 1997, while I designed and then wrote the Carbon Market into the United Nations Kyoto Protocol. At the end the carbon market prevailed and is now international law, and ironically it is now advocated by six of the largest oil companies in the world and this includes ExxonMobil.

Corporate interests are far reaching and they can permeate the entire economy and the politics of a nation as a whole. In the case of fossil fuels the situation is compounded by the central role played by energy in the economy. Fossil fuels are all about energy, and energy is the mother of all markets. Everything is made with energy, your home, your car, your food and the computer on which this article is written and read. For this reason the right to use fossil fuels is very basic and it is close to land’s rights; as land’s rights, the rights to fossil fuels can be the cause of wars. It is all about values. Some say that the right to fossil fuels is about the right to use the earth’s resources, which were provided by God to humans, and they hold this as a human right whether or not burning fossil fuels can cause catastrophes and damage irrevocably the rest of the world.

Tackling climate change is like abolishing slavery. It is so deeply felt that it can cause wars. 150 years ago it was nearly obvious to everybody that slavery must disappear, because of basic human principles and of the most sophisticated arguments about freedom, civil rights and even economics. Yet 150 years ago the US fought a fratricide war that was the bloodiest in the nations’ history, and tore the nation apart to defend the right to own slaves. The South lost, but it nevertheless attempted to resuscitate the war many times despite that.

US historians say that the economic value that is at stake from abolishing fossil fuels is about the same as the value that was involved in eliminating slavery in the US 150 years ago. The abolition of fossil fuels can destroy today the largest balance sheets in the planet: these are the balance sheets of the largest oil companies. It is not surprising that emotions and economic interests of that size run amok and cloud reason.

MR: You have said that climate change is the mother of all geopolitical challenges. Can you elaborate a bit on this?

GC: Climate change is all about the use of fossil fuels: over two thirds of the world’s CO2 emissions that cause climate change come from burning fossil fuels to produce energy. Fossil fuel energy is today the basis of industrialization, and its use since WWII is what is causing climate change. The period since WWII is when the world economy globalized, where the North and the South wealth gap increased deeply and became three times larger what it was before, when abject poverty led over 1.3 billion people to live below the level of satisfaction of basic needs, and on the brink of survival. The Bretton Woods institutions were created after WWII: the IMF, the World Bank, the WTO, and they were dominated by the US that become nearly 60% of the world economy after the destruction of Germany and Japan. The Bretton Woods institutions used financial tools, denominated in US dollars, to encourage and coerce 80% of the planet’s population in the developing nations to follow a resource intensive form of economic development, leading to the over-extraction and exports of their fossil fuel resources and other important natural resources at the lowest prices ever – except perhaps for the prices we face today –and their overuse in rich nations. Fossil fuels are intimately connected with globalization – indeed they are the basis of the current wave of globalization. Fossil fuels are the basis of industrialization and they are traded through international markets: the international markets are dominated by rich nations, and these markets grew three times faster than the world economy as a whole since WWII. In these markets, poor nations that house 80% of the world population over-extract the earth’s resources within their territory for exports, and export them at prices that are lower than replacement costs, leading to sustained poverty, while rich nations who house 20% of the world’s population overuse the world’s resources and benefit from them at very low prices. This implacable process has led to a 3x increase in the world’s wealth gap between the poor South and the rich North since WWII. The image is just 20% of the world’s population siphoning and overusing the great majority of world’s resources. But the process has reached its natural limits: the increasing inequality between rich and poor nations in the world economy and the corresponding overexploitation of resources is the cause of the global environmental crisis of our times. It is threatening every nation in the world. Global environmental risks are worst for the poor nations, but every nation is at risk from the massive overuse of resources our lopsided economies and international trade policies of the Bretton Woods institutions caused. Climate change means the rise of the seas which has the same level all over the world. While the poor will suffer more, rich nations will suffer $trillions in economic losses, according to OECD reports in Paris, and will face massive immigration flows that will threaten their institutions, as the Pentagon anticipates. Read more

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