Neoliberalism And Climate Politics

The character of neoliberal capitalism has fundamentally shaped how we have responded to climate change. The four key elements we outline above - the ideological fixation with markets, the dominance of finance, the widening global economic inequalities, and the focus on networks as means of organising - have all combined to shape the character of responses to climate change.

When people started to talk about climate in political and policy terms in the late 1980s, there was a great proliferation of proposals as to how to respond. Much of this was at the technical level - the prospects for different energy technologies or sources of energy, whether renewable or nuclear and so on. But how might societies best promote these various options?

From early on, the debate reflected the broad shift in the global economy towards the power of finance and neoliberal ideology. In environmental policy debates more generally, there was a growing embrace during the 1980s of the idea of using economic analysis and markets to achieve environmental goals. People talked of the 'New Politics of Pollution'20 and 'ecological modernisation',21 which argued that economic growth and environmental protection could be made compatible. This was important in seeking to discredit earlier claims made by the Club of Rome and echoed by environmentalists from the 1970s onwards that there existed environmental limits to economic growth.22

Markets, in other words, could be made to work for the environment. Cost-benefit analysis, it was argued, would allow us to weigh up the pros and cons of particular paths to pollution control and allocate values to them accordingly. This way, governments could calculate the optimal rate of pollution. The UK economist David Pearce was a key figure here, promoting the idea that rather than develop policies which specified what technologies business and individuals must use, or to simply ban particular substances or processes (so-called 'command and control' policies) it would be better to use 'market mechanisms' to achieve environmental goals. The book Blueprint for a Green Economy, published in 1989, widely known as the Pearce Report, advocated basing policy on the use of market incentives.23

Two main mechanisms are particularly important here. On the one hand are environmental taxation measures, where the government

20 A. Weale, The New Politics of Pollution (Manchester: Manchester University Press, 1992).

21 A. Mol, Globalization and Environmental Reform: The Ecological Modernization of the Global Economy (Cambridge MA: MIT Press, 2003).

22 D. H. Meadows, D. L. Meadows, J. Randers, and W. W. Behrens. The Limits to Growth (New York: Universe Books, 1974).

23 D. A. Pearce, A. Markandya & E. Barbier, Blueprint for a Green Economy (London: Earthscan, 1989).

imposes taxes on particular pollutants like carbon dioxide. On the other are emissions trading schemes, where an overall emissions limit is decided, a number of permits adding up to this limit are distributed to actors according to some principle of distribution, and then actors are allowed to trade the permits amongst themselves. With both measures, the main rationale is that they leave the decisions about how to achieve particular environmental goals up to individuals and companies. Governments set either general incentives (in the cases of taxes) or overall limits to pollution levels (in the case of emissions trading) and leave markets to work out who will reduce emissions when and where.24 In climate change, emerging at precisely this point as a political issue, in the late 1980s, these ideas left a powerful impact. This can be seen most clearly in the way in which emissions trading became the preferred policy approach. We leave the detailed discussion of emissions trading to Chapter 6; here what matters is that it became so popular because it fits with the main elements of neo-liberalism discussed above.

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