A Case Against Green Capitalism Why Green Capitalism Will Not Secure Environmental Sustainability

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A Case Against Green Capitalism

Why Green Capitalism Will Not Secure Environmental Sustainability

Anouk van der Lem (11715057)

Master’s Thesis Political Science (Political Economy) Thesis Supervisor: Dr. Paul Raekstad

Second Reader: Uğur Aytaç

Research Project: Alternatives to Capitalism Submission Date: 10 June 2022

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Abstract

This thesis will explore the research question: can green capitalism secure environmental sustainability? It aims to contribute to existing academic debates, to challenge the belief that capitalism is the default framework for environmental policies and to get readers to think about their stance on green capitalism. Conceptualisations for the contested topics of capitalism, environmental sustainability and green capitalism will be assessed. The conclusion is that green capitalism will not be able to secure environmental sustainability for three reasons. First, capitalist processes rely heavily on the properties of fossil fuel. Renewable energy sources lack these properties. Second, the growth imperative is not only to blame for environmental damages that have been done, it is also a reason for why environmental sustainability cannot be secured in a green capitalism framework. Finally, market- based solutions are not able to secure environmental sustainability, because they have not provided a fair distribution of research funds towards eco-friendly innovations, because they have not been able to incentivise the necessary changes towards environmental sustainability, and because the idea of a consumer sovereignty on the market is a false reality. The thesis closes off with a discussion surrounding the prospects of green capitalism frameworks in national and international governance.

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Table of Contents

Introduction ... 3

Chapter 1: Capitalism and Environmental Sustainability ... 6

1.1 Capitalism... 6

1.2 Environmental Sustainability ... 11

1.3 The Complex Relationship between Capitalism and Environmental Sustainability ... 16

1.4 Concluding Remarks ... 18

Chapter 2: Green Capitalism – A Framework for Environmental Sustainability? ... 20

2.1 Green Capitalism: What Does It Entail? ... 20

2.2. Green Capitalism Towards Environmental Sustainability ... 24

2.3 Comments and Critiques ... 29

2.4 Concluding Remarks ... 31

Chapter 3: Green Capitalism Is Not the Solution ... 33

3.1 Fossil Fuels, Capitalism and Green Capitalism ... 33

3.2 The Growth Imperative ... 36

3.3 Markets and The Viability of Market-Based Solutions ... 43

3.4 Concluding Remarks ... 47

Conclusion and Discussion ... 49

Bibliography ... 52

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Introduction

Environmentally-related issues are some of the biggest threats that humans, animals and the planet face in the 21st century. According to the latest IPCC report at the moment of writing this thesis, if the average global temperature exceeds 1.5°C in the following decades, many human and natural systems will face severe risks (IPCC 2022: 21). Depending on the duration and the severity of the overshoot above the 1.5°C threshold, some of the impacts could cause an additional release of greenhouse gases into our atmosphere, and some of the damage will be irreversible, even if global warming would be reduced afterwards. When looking only at the European continent, the researchers who worked on the report concluded that the risks include:

Risks to people, economies and infrastructures due to coastal and inland flooding; Stress and mortality to people due to increasing temperatures and heat extremes; Marine and terrestrial ecosystems disruption; Water scarcity to multiple interconnected sectors; Losses in crop production, due to compound heat and dry conditions, and extreme weather (IPCC 2022: 19).

These are only the risks related to the European continent, with the report mentioning even more specific and detrimental risks for every possible continent related to their specific ecosystems and other environmental circumstances. What I am trying to convey here, is that the question of how to secure environmental sustainability is one of the most important questions for our current generation and future generations. This thesis is written with the notion that environmentally-related problems are at least partly man-made and thus call for man-made solutions.

Because the necessity of taking action is becoming increasingly clear, the need for a framework that secures environmental sustainability is currently reflected in both national and international policymaking. A commonly used framework in such policymaking is that of green capitalism. In the most simple terms, green capitalism is a term used to describe a system in which so-called ‘green growth’ is achieved: economic growth that is in harmony with our planet’s resources (Chichilnisky 2020: 168). One of the main promises of the framework is that new technological innovations will bring about a new green revolution and improve the ecological efficiency of the economy (Hickel and Kallis 2020: 470). The actual measures and the way that they would be implemented vary across different organisations, governments and other policymaking actors. In this thesis, I want to assess whether the claims by proponents of a green capitalism framework hold up by exploring the following research question: can green capitalism secure environmental sustainability.

This is a normative research question which I will assess with a political theory approach. I personally believe that any green capitalism framework does not have the capacity to solve

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4 environmentally-related issues, which means that green capitalism is not able to secure environmental sustainability. Throughout this thesis, I seek to provide some theoretical insights as to why I believe this to be the case. With this thesis, I aim to further develop the existing theories surrounding green capitalism in relation to environmental sustainability, contributing my thoughts and arguments to this existing field of study. Not only does the topic of green capitalism have relevancy in our everyday lives, it is also very relevant in the academic world with many different scientists, theorists and authors providing arguments in favour of their frameworks that seek to secure environmental sustainability.

Apart from adding on to the existing knowledge and theories, I hope to get readers to think about the viability of green capitalism policies. A capitalist system is often assumed to be the default framework for seeking to solve environmentally-related issues (Newell 2011: 4).While some might argue that a green capitalism framework is the most evident solution to such issues, because it is the system that most resembles our current social order, I hope to provide a different perspective. Thus, my goals for this thesis are to contribute to existing discussions surrounding capitalism, green capitalism and the relation these systems have with environmental sustainability, to challenge the commonly held belief that capitalist frameworks are the default when dealing with environmentally- related issues and to get people to critically think about the viability of green capitalism solutions.

This thesis will be divided up into three chapters. The first chapter focuses on capitalism and environmental sustainability. In this chapter I will start off by exploring some conceptualisations for both concepts. Then, I will delve into the complicated ways in which these two concepts relate to each other. The conceptualisation of capitalism that will be used throughout this thesis is highly inspired by Nancy Fraser and Rahel Jaeggi (2018). Capitalism, in their view, is a system that can essentially be reduced to three defining features in its most basic from. For the conceptualisation of environmental sustainability I have combined the insights provided by Robin Hahnel (2011) and Andrew Dobson (1998). I conclude this chapter with the argument that because of the system of capitalism, nature is regarded as an infinite source of resources. Natural resources have to be commodified and exploited by the owners of capital in order for them to make a profit. Environmental degradation is seen as the consequence of the capitalist system, and should not be regarded as an accidental by-product of it. This chapter provides the background information that is necessary to understanding my arguments in the following two chapters.

The second chapter shifts the focus towards the system of green capitalism. In conceptualising green capitalism, I have made use of Graciela Chichilnisky’s (2020) framework of measures that she deems necessary for transitioning towards a system of green capitalism. After laying down the groundwork, I will look at three of the most common arguments in favour of the framework: green capitalist competition is necessary for technological innovations, the necessary private-public

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5 cooperation will be secured in this system, and green capitalism is more of a viable option than non- capitalist frameworks. The chapter closes off with a discussion related to these arguments. Here I will provide insights related to some problems with these arguments, as well as introducing some issues with the green capitalism framework as a whole.

Then, everything that I have been building up to in the first two chapters will come together in the third and final chapter. Here, I will provide an in-depth explanation of the three main reasons for why I believe that a green capitalism framework does not have the capacities to combat environmentally-related issues and avert climate disasters. First, I will look at capitalism’s dependence on fossil fuels and argue that transitioning towards a system of green capitalism will be made difficult because of this reason. The properties of fossil fuels allow it to take up an important space in the functioning of the capitalist system. Then, I will look at the growth imperative, which I believe both to be to blame for the environmental damage that has already been done as a result of it, as well as one of the reasons why green capitalism will never be able to properly secure environmental sustainability.

Finally, I will look at markets and market-based solutions and argue that they are not equipped to solve environmentally-related problems.

With the order of the chapters, I will slowly build towards the main argument that green capitalism is not able to secure environmental sustainability. As mentioned above, the first chapter serves as the necessary background information for the remainder of my thesis. Then, in the second chapter, I will illustrate the presumed positive sides of green capitalism as a way to give the framework and the arguments in favour of it a fair chance. Then, I will finally show why these arguments do not hold up, while also providing some deeper insights as to why I believe the green capitalism framework to be insufficient in securing environmental sustainability.

To summarise this introduction, I seek to provide some insights into why green capitalism will not be able to secure environmental sustainability with a political theory approach. In my three chapters, I will touch upon the conceptualisations of capitalism, environmental sustainability and green capitalism, and show the ways in which these concepts relate to each other. Then, I will highlight some of the arguments in favour of the framework, before providing my own comments on them. The first two chapters build up to the third one, in which I provide in-depth argument against the green capitalism framework.

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Chapter 1: Capitalism and Environmental Sustainability

In this chapter, I seek to explore the relationship between capitalism and environmental sustainability.

To achieve this, I will start off this chapter by providing an explanation for both concepts in their own contexts. After that, I will explore the complexities that arise when one assesses the relationship that exists between these two concepts. To be more specific, I seek to explore the ways in which I believe some inherent features of capitalism to have a profoundly negative influence on environmental sustainability. Thus, in this chapter I will argue that there are some structural factors to the system that have prevented environmental sustainability from being secured. The understanding of this relationship serves as the foundation of the remainder of this thesis, in which I further explore the extent to which the framework of green capitalism is capable to secure environmental sustainability.

Before one can grasp the specificities of green capitalism, it is important to look at the broader context of capitalism and capitalist systems. As mentioned above, this chapter will start off by providing a definition of capitalism. Then, the concept of environmental sustainability will be looked at in a similar manner. Finally, the implications of the relationship between the two concepts will be explored. The goal of this chapter is to provide insights into some of the most important concepts in this thesis. This is necessary information in understanding my arguments throughout the remainder of this thesis, having this chapter serve as a necessary backdrop.

1.1 Capitalism

There are few concepts in the academic world that are as contested as the concept of capitalism. For my conceptualisation of Capitalism, I have chosen to work with the definition provided by Nancy Fraser and Rahel Jaeggi in their book Capitalism. A Conversation in Critical Theory. Since they also acknowledge the contestation surrounding the concept, they provide a relatively orthodox description that focuses on the defining features that are necessary to describing the concept of capitalism in its most basic form. I have chosen to use this definition, because it allows readers to recognise capitalist systems on the basis of three defining features, without including too much ideological factors into their conceptualisation. Fraser and Jaeggi identify three features in the following manner: (1) the private ownership of the means of production and the corresponding division of class between the owners and producers, (2) a free labour market, (3) and the accumulation and expansion of capital with an orientation towards making a profit rather than meeting people’s needs (Fraser and Jaeggi 2018:

15). As becomes clear from these descriptors, much variation in what could be considered as a capitalist system is permitted within the conceptualisation provided by Fraser and Jaeggi. This is a contributing factor in the difficulties that are related in defining capitalism: when looking at contemporary societies, it can be concluded that there are many different configurations of capitalism

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7 that currently coexist, as well as the different historical configurations that existed in the past, which can all officially be described as capitalist (Fraser and Jaeggi 2018: 14). To grasp Fraser and Jaeggi’s understanding of capitalism a bit more clearly, I will further explore the three defining features of capitalism as described above, as well as the possible fourth descriptor of markets, since this is often linked to the capitalist concept.

(1) The Private Ownership and the Means of Production

Fraser and Jaeggi identify the private ownership of the means of production and the class division between those who own the means of production and those who produce within the system is described as the first defining feature of capitalism. The division between the owners of the means of production versus those who own nothing but their labour power can be regarded as one of the most definitive features and historical achievements of capitalism (Fraser and Jaeggi 2018: 15-16). This factor marks such an absolute break from other social formations, because in these other configurations, almost all people had access to at least some form of subsistence and means of production without selling their labour power on the labour market in order to meet their basic needs. With this factor being the most definite and defining marker separating the system of capitalism from other formation, it is no surprise that Fraser and Jaeggi identify it as the first one.

(2) Free Labour Market

For the second defining feature, Fraser and Jaeggi build on the first one, and illustrate how a free labour market is a defining feature of capitalism. A capitalist labour market can be defined as ‘free’ in that workers are free in a legal sense: they can enter different contracts with different owners of the means of production at free will, because they are not “enslaved, enserfed, entailed, or otherwise bound to a given place or particular master” (Fraser and Jaeggi 2018: 17). Thus, workers are free in the legal realm. However, I believe that in the economic dimension, workers are inherently unfree. As discussed above, capitalism’s achievement of dividing the working class from the capitalist class ensured that those who did not own capital or property had no other option but to sell their labour, since they have no access to any other form of subsistence. If one takes a republican approach to freedom, which states that freedom can be defined as non-domination or the independence form arbitrary power, one can argue that even though workers are free to enter contracts and sell their labour power to different firms, they are unfree to make the choice to enter the labour market in the first place, because any worker

“cannot produce without giving himself a boss or master” (Gourevitch 2015: 108). Thus, from a republican freedom point of view one can conclude that the absence of a viable alternative for workers marks an unfreedom that the working class will endure in a capitalist system.

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8 Fraser agrees with this conclusion and states that the freedom that workers are granted in the legal sense goes along with their vulnerability to compulsion inherent in the unfreedom in the economic realm (Fraser and Jaeggi 2018: 17). To support this statement, Jaeggi refers to a citation by Adorno, who argued that ideologies can be true and false at the same time, to illustrate the complexity of the free labour market under capitalism:

The point is that freedom and equality are actually realized in capitalism and in fact must be realized in order for the system to work. And yet at the same time they are not realized: the reality of capitalist work relations seems to undermine and contradict these norms – and not accidentally so. (Fraser and Jaeggi 2018: 17).

Thus, while it is true that capitalism requires a labour market that is free in the legal sense to function, the freedom linked to the labour market is a lot more complex when one takes more in-depth look into what it means to be free as a member of the working class. One cannot choose to no longer be a part of the working class and sell their labour power to the owners of the means of production, meaning that one is unfree in the economic realm from a republican understanding of freedom.

(3) Accumulation and Expansion of Capital

Now, let us turn to the final defining feature of capitalism as provided by Fraser and Jaeggi. This factor describes the dynamic of capital accumulation in a capitalist system. This ‘objective systemic trust’ or

‘directionality’ for owners of capital to make sure that all their efforts are aimed at expanding their capital is one of the features that is peculiar to the capitalist system (Fraser and Jaeggi 2018: 18). This process is often referred to as the growth imperative. In a capitalist system, capitalists are forced to partake in the process of accumulating wealth and capital as a way to diminish economic insecurities through the external and coercive laws of competition. In short, this means that for a capitalist to stop the growth of the accumulation of one’s capital would mean to fall prey to a competitor. One implication of this process is that, because there will always be competitors, there will never be full security for any owner of capital, meaning that there is no upper bound to the extent of accumulation of capital that capitalists seek to reach for. This process also has the implication that satisfying the needs of the people are a secondary goal, since generating profits to secure the accumulation of the owner’s capital is the main objective in a capitalist system. The connection between the aspiration of accumulation of capital and securing environmental sustainability will be further explored later in this chapter and in the upcoming chapters.

(4) The Market

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9 Fraser and Jaeggi suggest that there could perhaps be a fourth addition to the list of defining features of capitalism, namely the centrality of markets and market systems in a capitalist economy (Fraser and Jaeggi 2018: 19). Within a capitalist system, markets are often used as the prime institution for the allocation of resources and goods. However, the authors note that the relationship between capitalism and the market economy is more complicated than one might assume, stating that capitalism is more than just a market society and that markets have existed in non-capitalist systems in different ways (Fraser and Jaeggi 2018: 19). This point can be illustrated by the work of Karl Polanyi in his book The Great Transformation. He argued that although there have been economic systems in which markets were commonplace in the past, a great transformation occurred during the industrial revolution in which the markets that are typically found in capitalist systems developed (Polanyi 2001: 44). What is so typical about such a market economy is that it is self-regulating – “it is an economy directed by market prices and nothing but market prices” (Polanyi 2001: 45). Before this, markets were too small to regulate themselves. Up until the end of the feudalism, economic systems in Western Europe were argued to have been organised “either on the principle of reciprocity or redistribution, or householding, or some combination of the three” (Polanyi 2001: 57). After the industrial revolution, the centrality of communal relationships related to the distribution of goods had been replaced by the workings of the self-regulating market economy.

The point that Fraser and Jaeggi try to make is that markets cannot be viewed as a defining factor to capitalism per se, because markets have been present in non-capitalist systems too. However, as illustrated by Polanyi, the self-regulating markets that are present in capitalist systems are peculiar in that they have replaced communality in the economy. Thus, whereas markets have been present in other systems, the market system that is present in capitalism takes on a particular role and has particular features which distinguishes it from non-capitalist markets. As will become clear in the remainder of this thesis, the workings and mechanisms of the market economy are often seen as a central part in any green capitalist framework.

The Capitalist System

So, would it then be correct to classify capitalism as a purely economic system? I would argue that no, the scope of capitalism goes beyond that of just an economic framework. If one was to argue that capitalism is just an economic system and nothing more, this would downplay the role that the economy and economic practices play into the different spheres of everyday life. It would thus be faulty to reduce capitalism to just a system in the economic world. Fraser and Jaeggi themselves make it clear that the three describing factors mentioned above do not merely reflect a capitalist economy, but rather a capitalist society (Fraser and Jaeggi 2018: 48). For example: the class division between

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10 the owners and producers within the system is not merely an economic phenomenon, but a social one too. While this division is reflected in the different roles people take up in the economy, it also reflects a larger social phenomenon in that the class division also reflects the role that one takes up in the social sphere. Even though the class division is thus a social phenomenon just as much as it is an economic one, it is one of the necessary conditions that needs to be in place for capitalism to exist. Fraser and Jaeggi provide the argument that there are non-economic factors that enable the system to function (Fraser and Jaeggi 2018: 48). An example of this would be the social reproduction that is necessary for economic production to be sustained. As illustrated by Fraser, social reproduction activities often take place outside the market, but instead in households, neighbourhoods, childcare facilities and schools (Fraser 2014: 61). However, Fraser argues that such activities are necessary to the functioning of capitalism, because they “help to produce new generations of workers and replenish existing ones, as well as to maintain social bonds and shared understandings” (Fraser 2014: 61). I thus believe capitalism to go beyond the scope of a purely economic system, because there are non-economic factors that are vital to the functioning of capitalism.

What then, should capitalism be classified as? In conceptualising and understanding capitalism, Jaeggi advocates for a monistic social theory that would account for “economic and other areas of life as practices” (Fraser and Jaeggi 2018: 51). A monistic social theory holds that “the one variable is the most important or crucial one in determining what happens in the given domain (Addis 1972: 209).

For Jaeggi this means that economic practices should be regarded as interrelated with practices in other spheres of life, which essentially makes them part of “the socio-cultural fabric of society” (Fraser and Jaeggi 2018: 51). Fraser instead proposes the framework of capitalism as an institutionalised social order. This means that the system of capitalism should be regarded as on par with systems like feudalism. She describes how institutionalised separations and divisions between economic production and social reproduction; economy from the polity; the non-human natural background from the human foreground; and exploitation and expropriation are what shapes the system (Fraser and Jaeggi 2018:

52-53). I have already discussed the illusion of a division between economic production and social reproduction above. What this signifies is that in the system of capitalism, the people are to believe that they are separate and somewhat contradicting processes, even though they both serve to secure the goals of the capitalist system. The connection between the illusionary division between the natural and the human as described by Fraser will be discussed later in this chapter. What the descriptions of capitalism from Fraser and Jaeggi have in common is that they both refute the idea that capitalism is purely an economic system. Rather, the economic factors of capitalism are interwoven in complex ways into the social and political spheres of life.

To conclude this first part of the chapter: capitalism can be seen as an institutionalised social

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11 order or a set of economic practices that are interrelated with the practices from other spheres of life.

Capitalism, in my view, thus exceeds the scope of a purely economic system. While capitalism can be difficult to define, because of historical and spatial variations in the makeup of capitalist societies, the defining three features of capitalism, according to Fraser and Jaeggi are: private ownership of the means of production and the corresponding social division, a free labour market, and the accumulation and expansion of capital. A possible fourth factor that is discussed are markets and the market economy, but it should be noted that the relationship between capitalism and markets is not as straightforward as the relationship between capitalism and the prior three characteristics.

1.2 Environmental Sustainability

In this second part of the chapter I will look at the topic of environmental sustainability, and more specifically: what it means for a system to be environmentally sustainable. Just like conceptualising capitalism in the previous part of this chapter, environmental sustainability is also difficult to pin down to one definitive conceptualisation. This is also related to the contested nature of the topic. However, one essential and basic feature for a theory of environmental sustainability is that it must argue for sustaining at least some aspect of the natural environment into the future (Dobson 1998: 41). So, the defining factor distinguishing theories on environmental sustainability from theories on sustainability is this notion that at least some part of the natural environment should be sustained. But what is exactly identified as this essential part is a debated topic amongst academics. In this part of the chapter, I will explore some theories regarding the conceptualisation of environmental sustainability.

The Need for Environmental Sustainability

But first, why would a framework for securing environmental sustainability be a necessity in the first place? I have already shortly introduced the necessity for this in my introduction. The notions that environmentally-related issues are the most pressing issue of our generation, and that these issues are at least partly induced by humans and human actions underlie my arguments in this thesis. All ecosystems and the different organisms that live within it have cleverly evolved in an intertwined manner, meaning that one species often depends on multiple other species to survive. Thus, in order to keep ecosystems healthy and functioning, it is of the highest necessity that the possibly detrimental effects of extinctions or shifts in the range of species and organisms must be averted.

So, how do these extinctions and shifts in patterns occur? One of the aspects of climate change and environmental degradation that is most often highlighted is that of temporal change. More specifically, the global rise of temperatures is regarded as one of the most pressing environmentally- related issues. According to Fred Magdoff and Chris Williams, the increase in average global temperatures between the base period of 1880-1920 and 2016 are about 1.26°C, which is a rise in

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12 temperature that was last seen over 100,000 years ago (Magdoff and Williams 2016: 29-30). John Bellamy Foster, Brett Clark and Richard York agree with this notion and add that such a fast level of increase in rise of average temperatures is usually only observed at the end of ice ages (Foster, Clark and York 2010: 35).

But do not just take my word, or the words of the political theorists named above, for it. Let us turn back to the scientists who worked on the 2022 Intergovernmental Panel on Climate Change report.

In relation to global warming, they have set out five Shared Socioeconomic Pathways (SSP) in which different greenhouse gas emissions scenarios are considered. In these models, an average global warming increase of a maximum of 1.5°C in the 21st century relative to the average temperatures of 1850-1900 is regarded as the threshold. The models look at the near term, meaning that of 2021-2040.

Within this term, the intermediate, high and very high greenhouse gas emissions scenarios (SSP2-4.5, SSP3-7.0 and SSP5-8.5) predict that the 1.5°C global warming level will be exceeded (IPCC 2022:

10, 18). The low greenhouse gas emission scenario (SSP1-2.6) predicts that it is more likely than not to be exceeded, while the very low greenhouse gas emission scenario (SSP1-1.9) is the only one that it is more likely than not that the 1.5°C temperature increase is not exceeded between 2021 and 2040 (IPCC 2022: 10, 18). All in all, their models do not paint a positive picture. Even in the most ambitious scenario, there is no certainty that the 1.5°C threshold will not be exceeded in the near term, let alone in the long term.

Rising global temperatures can throw existing ecosystems off balance and are able to cause the detrimental shifts in their functioning. According to the IPCC report, biodiversity change, structure change, tree morality, wildfire increase and carbon loss would have a moderate to very high change to increase when average global surface temperatures rise anywhere between 1.5°C and 4°C (IPCC 2022:

18). That is why the 2015 Paris Climate Agreement contains the notion that reducing human-caused emissions is a necessity, since they are a cause of the rise in average global temperatures (Magdoff and Williams 2016: 29). Not only the rising surface temperatures on land are regarded as a problem, the rising temperatures of the ocean are also a major cause of concern. The rise of sea temperatures, as well as the accelerating loss of sea ice have the ability to increase the occurrence of flooding, can cause damage to low-lying agricultural soils by saltwater intrusion, and are even able to alter global weather patterns (Magdoff and Williams 2016: 32-33). Thus, rise in average global surface temperatures are very likely to continue in the near term, which can have detrimental effects on terrestrial and water ecosystems.

Apart from helping accelerate the processes mentioned above, human action is also at least partly responsible for the contamination of the environment through the widespread pollution with plastic and other toxic particles (Magdoff and Williams 2016: 34). The air that we all need to breathe

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13 is being polluted with toxins that can have a damaging effect on the long-term health of human beings.

According to the World Health Organization, over 90% of European citizens are exposed to levels of outdoor fine particulate matter that exceeds the WHO’s guidelines, which is attributed as the cause of 482,000 premature deaths in 2012 (WHO 2015). That is not all, a recent study has shown that plastic particles are sometimes present in human blood, meaning that “human exposure to plastic particles can result in absorption of particles into the bloodstream” (Leslie et al. 2022: 7). What this means, is that a framework for environmental sustainability is not only important when it comes to protecting ecosystems, but also in safeguarding the health of human beings.

The final factor that I wish to highlight in my argument to show that securing environmental sustainability is a necessity, is that of the depletion of natural resources. Depleting these natural resources can also cause a shift in the balance of existing natural ecosystems. As mentioned above, ecosystems have evolved to sustain themselves in clever ways. Taking away finite resources without properly replenishing them could throw off the balance and livelihoods of the organisms and species that live within these ecosystems. The relationship between capitalist systems and extraction of natural resources will be explored later in this chapter.

In short , environmental sustainability should be ensured in order to avert disastrous destruction of natural ecosystems. Because of their interconnected nature, shifts and extinctions within ecosystems could cause a destructing domino effect, affecting not just the livelihoods of organisms and species in the ‘non-human’ natural sphere, but also that of human beings all around de globe. To highlight the necessity of environmental sustainability, I have shortly illustrated the effects of some contemporary environmentally-related issues.

Conceptualising Environmental Sustainability

If one agrees that environmental sustainability should be ensured, how should it be conceptualised?

Robin Hahnel proposes that for a framework to be regarded environmentally sustainable, it should require that: “the physical stocks of major categories of natural resources and sinks must be maintained” (Hahnel 2011: 42). True environmental sustainability, in Hahnel’s view is different from frameworks of weak sustainability and strong sustainability. Where weak sustainability allows for substituting any component of the capital stock for another one, as long as the overall value of the capital stock is maintained, strong sustainability requires that future generations are able to enjoy a stock of natural capital that is at least as valuable as our current stock (Hahnel 2011: 42). The defining feature of environmental sustainability is that it is not defined along the lines of the value of the natural stock, but rather on the presence of physical stocks of particular natural resources (Hahnel 2011: 43).

In the previous section I have shortly touched upon the division between the human foreground

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14 and the non-human natural background that Fraser discusses as a feature of the capitalist framework.

But what exactly does the term nature in this sense entail? On first glance, nature is often assumed to be that which is other than the human and is thus not the result of human action or making (Vogel 2016: 158). However, I believe this conception of nature to be faulty, since it can be concluded that we live in the Anthropocene – the age in which everything is, at least partly, influenced by human action (Vogel 2016: 158). A better definition of nature then would be a system that would function, or would have functioned in the absence of human interference (Anderson 1991: 348). I believe this conceptualisation of nature fits better with our reality and the definition of environmental sustainability that is used in my thesis. According to Jay Anderson, this conception of nature recognises that naturalness does not operate in a binary – natural vs. unnatural – but rather views it as a continuum between the two extremes (Anderson 1991: 348). This is approach towards defining nature is much more true to reality, since it acknowledges that there is no actual hard divide between the natural and the human spheres.

To further develop my conceptualisation of environmental sustainability, I will look at Andrew Dobson’s three conceptions for environmental sustainability in his 1998 book Justice and the Environment. His definitions mainly focus on which parts of the natural environment should be sustained, and the extent to which they must be sustained in different conceptions of environmental sustainability. The first one is described as the ‘critical natural capital’ framework, which is centred around the idea that there are factors within the natural capital that should be sustained, since they are critical to the production and reproduction of human life and whose presence are thus an essential preconditional for survival (Dobson 1998: 43). What is alluded to in this framework is that it is based around an anthropogenic point of view of environmental sustainability: environmental sustainability should be achieved for the sake of the needs of human beings. Within this framework, it is necessary to sustain critical natural capital in order to achieve environmental sustainability. To achieve this, it is sufficient to replenish sources that are renewable, e.g. firewood, after they have been used by humans.

If a non-renewable source is substitutable, e.g. fossil fuels with renewable energy, it is sufficient to substitute them. However, it is necessary for non-renewable and non-substitutable resources, e.g.

rainforests, to be maintained in their current integrity into the future (Dobson 1998: 45-46). In short, this framework seeks to ensure environmental sustainability from the point of view of sustaining the welfare of human beings. This is to be done through renewing, substituting or protecting current crucial natural resources.

The second conception for environmental sustainability as provided by Dobson is called the

‘irreversible nature’ framework, which focuses on the irreversible losses of species and resources within the natural setting (Dobson 1998: 47). This framework somewhat departs from the purely

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15 anthropogenic view of the critical natural capital framework by seeking to protect some aspects of nature for nature’s sake. However, the starting point is still that of human welfare and the continuation thereof. In this framework it is necessary to ensure that the irreversible loss of a type of species is prevented when securing environmental sustainability (Dobson 1998: 48). Within this framework, it is acknowledged that it is impossible to prevent any and every type of irreversible loss in nature, so calculations need to be made to ensure that the possible benefits from preventing some losses outweigh the costs that might result from this action. It is not sufficient to renew natural capital when it comes to the irreversible loss of some species, so this framework instead focuses on substituting and protecting the natural environment that is currently present (Dobson 1998: 50). While there is some overlap with the starting point of human welfare of the first conception of environmental sustainability, the irreversible nature framework acknowledges that substitution is not always a possibility, thus increasing the focus on substituting and protecting what is already there.

The final conception provided by Dobson is called the ‘natural value’ framework. This final framework fully departs from the anthropogenic point of view, because it argues that environmental sustainability should be seen as an obligation to nature, meaning that it is necessary to defend the natural sphere even when human welfare is not necessarily and immediately profiting from this action (Dobson 1998: 52). In this framework, it is not sufficient to renew or substitute natural resources, because natural value cannot be substituted by other means. Instead it views protecting the natural sphere as the necessary step in securing environmental sustainability. In short, this conception takes an eco-centric approach when it comes to securing environmental sustainability.

To conclude this section on environmental sustainability, I believe that securing environmental sustainability is one of the most important issues of our time. Environmental sustainability, as used in my thesis, describes a framework in which the physical stocks of natural resources must be maintained.

This fits well with my chosen description of naturalness, which refers to that which functions, or would have functioned without human interference, since it acknowledges that there is no hard divide between what is natural and what is human and that humans have had at least some form of influence over most parts of the natural realm. This is important, because my thesis accepts the notion that environmentally-related issues and climate change are at least partially man-made. When I refer to the concepts of nature or environmental sustainability in the remainder of my thesis, these are the conceptualisations that I am referring to. When it comes to determining which parts of the physical stocks should be maintained, I have introduced three frameworks that take different stances on this issue. From now on, I will work with the critical natural capital framework when I assess whether the green capitalist framework can secure environmental sustainability. Since this framework goes the least far in protecting the natural environment, I believe that if I could prove that green capitalism is

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16 not even able to achieve this level of sustainability, it will most definitely not be able to secure environmental sustainability under more strict conditions.

1.3 The Complex Relationship between Capitalism and Environmental Sustainability Now that I have discussed conceptualisations and definitions of the terms capitalism and environmental sustainability, the final step of this chapter is to assess the complex relationship that exists between these two concepts. Even though these two concepts might seem barely related on first glance, I would argue that environmental degradation is inherently linked to the capitalist system. The belief that guides my thesis contradicts the notion that capitalism should be regarded as the default framework when dealing with environmentally-related problems. When it comes to securing environmental sustainability, capitalism is often regarded as “an irredeemable fact and seemingly irreversible reality of contemporary social and economic life whose implications it hardly seems worth naming, let alone systematically examining in relation to particular human ecologies” (Newell 2011:

4). In the remainder of this thesis, I seek to challenge this commonly-held belief.

Earlier in this chapter, I have shortly discussed the illusion of a divide between social reproduction and economic production. There is another distinction that Fraser mentioned that is of importance to understanding the interconnected relationship between capitalism and environmental degradation, namely the distinction between the human foreground and the non-human natural background. Capitalism’s use of nature can both be seen as “a ‘tap’ to provide ‘inputs’ to production and also as a ‘sink’ to absorb the latter’s waste” (Fraser and Jaeggi 2018: 35). Fraser and Jaeggi argue that “nature’s capacity to support life and renew itself constitutes yet another necessary background condition for commodity production and capital accumulation” and that it is thus also a necessary factor in sustaining the class divisions we know in capitalist society today, stating that none of these social roles would exist without the capacities of the illusion of the non-human natural background (Fraser and Jaeggi 2018: 35-36). This is another example of non-economic factors that Fraser and Jaeggi discussed are necessary to sustain the system of capitalism. As is noted in the previous section, nature is not able to infinitely replenish itself, and natural resources are finite. This is especially the case for non-renewable fossil fuels that take up such an important place in a capitalist system, which is a connection which I will return to in the next chapters.

The complex relationship between capitalism and environmental sustainability, and the reason why I argue that within the system of capitalism, environmental sustainability cannot be secured, can be illustrated by the so-called “Lauderdale Paradox” in a very simple manner. This paradox, inspired by James Maitland, the eighth Earl of Lauderdale (1759–1839), argues that “there was an inverse correlation between public wealth and private riches such that an increase in the latter often served to

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17 diminish the former (Foster, Clark and York 2010: 55). Public wealth, in this sense, can be defined as all that people desire, either because it is useful or enjoyable, which means that goods related to public wealth have use value and constitute to overall wealth and welfare. Private riches, in contrast, require the additional degree of scarcity, which means that it has value beyond its use value. Scarcity is thus the defining factor that differentiates private riches from public wealth (Foster, Clark and York 2010:

56). Lauderdale argued that this scarcity originates from restricting access to necessary goods that were formerly abundant, such as the necessary elements of life: air, water and food, and attaching exchange value to them, would increase private riches at the expense of common public wealth (Foster, Clark and York 2010). Apart from a use value, resources thus have an exchange value and the sum of all these exchange values amounts for the aggregation of private riches.

As mentioned before, nature is often regarded as a free gift with the property to provide infinite resources for humans to exploit. When this is combined with the paradox explained above, one can conclude that those who own capital are able to commodify natural resources and expropriate them.

However, as becomes clear from the current state of our environment, nature does not have the ability to infinitely replenish itself and provide resources at an ever increasing rate. In order for the capitalist to achieve capital accumulation, which is one of the defining features of capitalism, the sum of all exchange values should contribute to the aggregation of private riches of those who own capital. For the owners of capital to achieve this accumulation, natural resources would have to be increasingly exploited in order to sustain this growth. The connection between the growth imperative and environmental sustainability will be further discussed in the next chapters.

The final point that I wish to highlight in this chapter are environmentally-related issues as commodities. The adverse effects to the natural realm as a result of production practices is often regarded as an externality in economic theories. What is often brought up in relation to the question of what to do with unwanted externalities is the theory proposed by Ronald Coase in The Problem of Social Costs. His theory states that the costs related to the production of externalities should not automatically be paid by the producing party in the form of a Pigouvian tax as a form of compensation, but that instead the total effect of different social arrangements should be looked at to determine the optimal solution (Coase 2013: 877). As mentioned before in this chapter, it is often assumed that market-based solutions are able to overcome such problems. I will also return to the viability of market- based solutions in relation to environmental sustainability in the next chapters of this thesis.

In short, I have shortly described the complex relationship that exists between capitalism and environmental sustainability. As argued by Fraser and Jaeggi, the natural sphere is regarded as a whole separate and subordinate sphere from our human sphere. When the capitalist system stays in place as it is now, and has been in recent history, I argue that environmental sustainability can never be secured.

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18 Natural degradation is taking place as a consequence of the capitalist system, and should not be regarded as an accidental by-product. Capitalism needs the expropriation of natural resources to continue the accumulation of capital, and thus natural degradation continues to take place. As mentioned above, I will return to key parts of this argument in the remainder of my thesis.

1.4 Concluding Remarks

In this chapter, I have looked at the concepts of capitalism and environmental sustainability, as well as the complex relationship that exists between the two. The goal of this chapter was to provide conceptualisations of two of the most important concepts of my thesis, and illustrate the reasons why I believe ‘non-green’ capitalism to be incompatible with environmental sustainability. I have tried to show that environmental degradation is an inherent and essential part of capitalism, and not some accidental by-product.

This chapter started off with a definition of capitalism as provided by Fraser and Jaeggi.

Capitalism refers to a system in which there is a division between those who own the means of production and those who have to sell their labour power, a free labour market in the legal sense, and finally the strive for capital accumulation and growth that drives the provision of goods in society. I have also introduced the concept of markets and explained the role that the self-regulating market economy takes up in capitalist systems. Capitalism is not an easy system to define, because of its historical and spatial variations. However, societies that meet these three features should be considered capitalist societies. From this description, it became clear that the scope of capitalism exceeds that of just an economic system. Capitalism can rather be described as an institutionalised social order or a set of economic practices that are interrelated with the practices of other spheres of life.

Environmental sustainability is a concept that is equally difficult to define. But, just like the basic defining features of capitalism, I have chosen to make use of a conceptualisation of environmental sustainability that focuses just on the fundamentals. A defining feature of a theory on environmental sustainability is that at least some part of the natural realm should be sustained into the future. This is why I have chosen the following definition for environmental sustainability moving forward: a system in which the physical stocks of major categories of natural resources and sinks must be maintained.

Finally, I looked at the complex relationship between capitalism and environmental sustainability. I defended my argument that environmental degradation is an inherent part of the capitalist system. In order to achieve capital accumulation, natural resources have to be commodified and exploited by those who own capital. Nature is wrongfully regarded as an infinite source of resources. As was discussed earlier in this chapter, environmental degradation and climate change are

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19 at least partly man-made problems that are created through the workings of this system. Thus, I have argued that ‘normal’ capitalism has not been able to secure environmental sustainability and will not be able to do so in the future. In the next chapters, I will look at the concept of green capitalism and the extent to which I believe this framework to be able to work through these issues.

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Chapter 2: Green Capitalism – A Framework for Environmental Sustainability?

In the previous chapter, I established my believe that environmental degradation should be seen as a consequence of capitalism, not an accidental by-product of it. This was done as a way to lay down the groundwork for the main argument, which focuses on green capitalism as a possible framework to secure environmental sustainability. While I have some reasonable doubts about the viability of pursuing a green capitalism framework in order to achieve environmental sustainability, there are a lot of scholars and other thinkers that are in favour of this framework as a possible solution. That is why this chapter will explore some of the main arguments in favour of the framework. First, I will start off with explaining the framework of green capitalism and look at the differences with ‘normal’

capitalism. Then, I will look at arguments in favour of the framework, which I seek to represent in an honest and objective manner. I will close off with an exploration some of problems with these arguments. This chapter will neatly tie into the next chapter, which will explore my critiques of green capitalism as a whole in an in-depth manner.

2.1 Green Capitalism: What Does It Entail?

In the previous chapter, I have described capitalism as a system with the defining features of a division between those who own the means of production and those who produce, a free labour market and the growth imperative. However, I also noted that there is a lot of contestation surrounding the concept.

To fully understand the position of green capitalism proponents, let us look at the descriptors that they use to describe the system. While proponents of the system agree that capitalism is a system in which one is to pursuit profit and capital accumulation, they often mention a very distinct feature of capitalism as the most important when it comes to environmental sustainability, namely that, when compared to other non-capitalist systems, a competitive capitalist system provides the best preconditions for the generation of innovations, according to the theory of economic development (Bosch and Schmidt 2019: 277). Thus, the ‘capitalist’ part of green capitalism, in the eyes of its proponents, reflects a system in which competition between capitalists seek to maximise their profits, which then gives the best incentives to innovate efficiently. I will delve more deeply into the argument related to competitive capitalism later in this chapter.

But what then is ‘green’ about green capitalism? Graciela Chichilnisky, outspoken proponent of green capitalism, describes the system as “a new economic system that values the natural resources on which human survival depends” (Chichilnisky 2020: 161). This is a very broad definition, and shows that there are different interpretations of what green capitalism should entail. At the very

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21 minimum, a framework is considered green capitalism when it: contains a growth imperative, promotes a transition towards sustainability via the market, holds the belief that competitive green markets will lead to new technological innovations that will solve environmentally-related problems, promotes sustainable entrepreneurship and corporate social responsibility and motivates consumers to encourage the ‘green’ practices of businesses (Kenis and Lievens 2016: 3-4). Green capitalism is thus said to represent “a new economic growth paradigm for moving from an economic system that allowed, and at times generated crises towards a system that proactively addresses and prevents them” (Bailey and Caprotti 2014: 1797).

As explained in the previous chapter, I have chosen to look at environmental sustainability from the perspective of Dobson’s ‘critical natural capital’ framework, which focuses on securing environmental sustainability – the preservation of physical natural stock – from an anthropogenic perspective in which those parts of natural stock that are critical to human survival must be preserved.

This fits the green capitalist framework well, as becomes clear from Chichilnisky’s work with her focus on human survival. In the framework of green capitalism, environmental sustainability is secured when the global climate crisis is averted (Chichilnisky 2020: 167). Thus, it is sufficient to maintain enough physical natural stock so that the global climate crisis is resolved in order to secure mankind’s survival. Chichilnisky describes three building blocks that are necessary to achieving a green capitalism framework:

(1) Global limits imposed nation by nation in the use of the planet’s atmosphere, water bodies, and biodiversity.

(2) New types of markets to trade these limits, based on equity and efficiency (…) Their prices create new measures of economic value and update the concept of GDP.

(3) Efficient use of carbon negative technologies to remain within the world’s carbon budget and avert catastrophic climate risks, providing a transition to clean energy and ensuring economic prosperity in rich and poor nations (Chichilnisky 2020: 162)

These measures are examples of how Chichilnisky aims to put the ideals of green capitalism into practice, and are regarded as a way to be able to reach the key goals of global policy programmes, such as the UN Kyoto Protocol, the Paris Agreement and the UN Green Climate Fund (Chichilnisky 2020: 161-162). Her framework thus provides a blueprint for the practical implementations of measures that are necessary to transition towards a green capitalism framework. I will now break down each individual building block and look at the expected implications of adapting such measures into global policy.

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22 (1) Global Limits on the Use of Natural Resources

The first building block of Chichilnisky’s framework is perhaps the most practical and straightforward one, namely: to impose global limits on states’ use of natural resources. As was discussed in the previous chapter, natural resources are often seen as infinitely able to replenish themselves within the prevailing economic theories. However, natural resources are definitely not infinite and regarding them as such can lead to disastrous consequences related to environmental degradation. Imposing limits on the use of natural resources and the use of the planet’s atmosphere, water bodies and biodiversity is a logical step in reducing further environmental degradation. What Chichilnisky does fail to mention is the enforcement mechanism of this part of the scheme. Whether governmental bodies, business actors or the market mechanism by itself should take care of this task is not made clear. This is only the first step, which leads naturally into the next one.

(2) New Types of Markets to Trade Limits

The second building block is that of creating new types of markets to trade the limits on the use of the global commons. According to Chichilnisky, this will create new economic measures to update the concept of GDP. But what would such a system actually look like? The first step would be to transform economic values and prices in such a way that green economic projects would become more profitable than their polluting and damaging counterparts (Chichilnisky 2020: 164).

Chichilnisky believes that this market mechanism will be able to provide the signals that are normally provided by the market once a resource, good or service becomes scarce. According to this scheme, green markets would change the measurement of GDP by valuing global commons, which in turn “changes the measure of economic progress defined as the sum of all goods and services produced by an economy at market prices” (Chichilnisky 2020: 165). In our current system, countries could use up large amounts of natural resources to produce goods to sell them on the global market, and their GDP could grow as a consequence. Still, this practice would damage the environment in irreversible ways. While the product being sold has a market price, the natural resources used to produce it currently do not, which means that the environmental damage that has been done in the production process has not been taken into account when measuring GDP (Chichilnisky 2020: 165). In short, Chichilnisky believes that by putting a value on natural resources, by implementing markets to trade limits on the use of such resources, the measure of GDP would take into account the environmental costs of producing products.

How would green markets contribute to adding the value of natural resources to the economic process and revaluating the measures of GDP? Such markets would trade the rights to

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23 make use of the resources provided by the global commons. Commons are non-excludable but rivalrous goods, meaning that without proper management the common-pool resources could run out and be tragically destroyed – a theoretical phenomenon that is referred to as the ‘tragedy of the commons’ (Ostrom 2010: 649). To illustrate Chichilnisky’s idea of a green market and how it could protect the commons, as well as change the measurement and value of the GDP, she looks at the carbon market. Chichilnisky describes two nations that are identical in all aspects, except on the way they provide energy – let us say that nation A only uses renewable energy sources, whereas nation B relies solely on fossil fuels. Implementing a carbon market in Chihcilnisky’s vision would mean that nation A’s GDP would increase, because nation B would have to pay nation A – who have no emissions because of their renewable energy sources – for the environmental damages they have caused as a result of emitting too much CO2. It would then also be more profitable for investors to put their money into green initiatives. The GDP would now reflect the damages done by nation B to the environment (Chichilnisky 2020: 165).

Because Chichilnisky is unclear whether her scheme refers to paying for the emission of CO2 in general, or whether one would just have to pay when their emissions overshoot a threshold, I propose a different way of looking at GDP in relation to environmental sustainability. The measure of decoupling GDP growth from material throughput and carbon emissions is often brought up in relation to green growth. Absolute decoupling would entail that an economy would be able to grow without harming the environment from the corresponding resource impacts in absolute terms (Hickel and Kallis 2020: 470). This means that the efficiency of resource use would have to grow just as fast as the GDP to count as absolute decoupling. Relative decoupling on the other hand refers to the situation in which the resource impacts decrease relative to the GDP. In this situation, a growing GDP would still result in a growth of resource impacts overall. I will come back to the decoupling of GDP from resource impacts in-depth in the final chapter of this thesis.

In short, green markets would sell the limits on the use of natural resources of the global commons. By doing so, the party that causes emissions and pollution would have to pay the nations that do not, or do it less so. As a result, Chichilnisky believes that the concept of GDP would start to reflect the damages done, or not done, by a nation, which fits in with green capitalism’s aims to have economic growth be harmonious with the available natural resources. I have proposed an alternative way of relating GDP and damages done to the environment as a result of the production process in light of absolute and relative decoupling.

(3) Carbon Negative Technologies and Renewable Energy

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24 The third measured proposed in Chichilnisky’s framework is to make efficient use of carbon negative technologies in order to remain within the permitted global carbon emissions as a way to avert possible catastrophic environmentally-related issues. In the long-run, her goal will be to replace all energy sources fuelled by scarce and polluting fossil fuels with clean green energy sources. However, this development would take too long to be sufficient to avert catastrophe in the short-run. Chichilnisky proposes that the initial agenda of green capitalism should thus focus on carbon negative technologies: removing carbon that has already been emitted from our atmospheres (Chichilnisky 2020: 166). Negative carbon technologies, in Chichilnisky’s view, function as the blueprint for the long-term transformation towards renewable energy sources. It is important to note that technologies related to carbon capture have not yet been tested on the large scale that would be necessary for them to make an impact (Wallis 2009: 35). Competitive capitalist frameworks are seen as a necessary factor when it comes to technological innovation, which is an argument that I will come back to in the next part of this chapter.

In short, Chichilnisky proposes a framework of green capitalism as a means to work towards the ultimate goal of environmental sustainability, which in her vision is to retain enough physical natural stock to avert environmentally-related catastrophe and ensure human survival. Her framework consists of three building blocks, namely: imposing global limits on the use of the earth’s resources, new types of markets to trade these limits and using carbon negative technologies as a way to ultimately transition to clean and renewable energy sources.

2.2. Green Capitalism Towards Environmental Sustainability

In this part of the chapter, I will illustrate the arguments made in favour of the green capitalism framework most often brought up by its proponents. Here, I will present the following three overarching arguments in favour of green capitalism: (1) competitive green capitalism allows for Schumpeterian ‘creative destruction’, which predicts the generation of the invention necessary environmental technologies (Bosch and Schmidt 2019: 270), (2) green capitalism has gained political and business support in recent years, safeguarding private-public cooperation (Bailey and Caprotti 2014: 1792), and (3) it is more realistic and pragmatic to design future growth-oriented markets in an eco-friendly way than to imagine alternatives (Bosch and Schmidt 2019: 275).

(1) Schumpeterian Creative Destruction

The first argument that will be assessed is that proponents of the framework believe that competitive green capitalism is able to provide the impulses towards the invention of the technologies that are necessary to avert environmentally-related catastrophes. This argument can be related to

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25 Chichilnisky’s second and third building blocks of green capitalism. As explained above, Chichilnisky believes that by creating new markets that trade the limits of use of natural resources could create incentives to promote investments in green capitalist ventures. She also argues that such green ventures, like carbon negative energies in the short-run and green, renewable and clean energy sources in the long-run, are a necessary step towards securing environmental sustainability. Bosch and Schmidt argue that, when one looks at Schumpeter’s theory on creative destruction, the conclusion is that competitive capitalism is a necessity to create such innovations (Bosch and Schmidt 2019: 271).

First, let us assess what this theory of creative destruction as described by Joseph Schumpeter entails and what it could mean for green innovation. Schumpeter argued that technical innovations are the force that drive economic growth in capitalist societies, with newer and more efficient technologies replacing the older ones, ‘destroying’ them in the process. He described creative destruction as a

“process of industrial mutation (…) that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” (Schumpeter 2003: 83). The search for continuous innovations and creative destruction are regarded as an integral part of capitalist systems. While it might seem from this description that creative destruction can be seen as a process of infinite progress where there is no end to the possibility of technological innovation, this is not what Schumpeter argues. Instead, he was afraid that a stage would be reached where economic progress and innovation would have become depersonalised and automated, and no longer driven by creative entrepreneurs (Schumpeter 2003: 133). Capitalism, which is regarded as an evolutionary process, would become atrophic and there would be nothing left for these entrepreneurs to do (Schumpeter 2003: 131). The function of entrepreneurs has always been to reform and revolutionise production by

“exploiting an invention or (…) an untried technological possibility for producing a new commodity or producing an old one in a new way (…) by reorganizing an industry and so on” (Schumpeter 2003:

132).

Because entrepreneurs were not regarded as their own social class, they would become absorbed into the bourgeoise class as a means to recruit and revitalise itself, which would sever the ties between entrepreneurs with their families and their businesses in the process. Forming monopolies is seen as a consequence of the bourgeoisie protecting their interests. As a result of this process, competition declines, and thus the incentives to innovate disappear with it. In this whole process, capitalism would get rid of inefficient and superfluous institutions, however it would also destroy the very institutions that it was built upon, such as property rights (Schumpeter 2003: 141-142). Just like the bourgeois class would try to secure their interests through the process of monopolising, the people would try to secure their own interests by electing social democratic parties (Schumpeter 2003: 235).

Like capitalism replaced the system of feudalism in Western Europe, Schumpeter believes that a very

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