Joeri de Wilde: Capitalism will not save the climate

Joeri de Wilde: Capitalism will not save the climate

Climate Change Energy Transition
Joeri de Wilde (Triodos Investment Management)

This article was originally written in Dutch. This is an English translation.

By Joeri de Wilde, Investment Strategist at Triodos Investment Management

Capitalism is unreliable as a remedy against further global warming. And even if the capitalist system were the best option, it would not do us much good in a world where there are fewer and fewer universal values.

It is a seemingly relevant question when it comes to problematic global warming: which economic system is the best, or rather, the least bad for our planet? This question is often asked, especially in the West. This summer, a piece appeared in the NRC following new research. The misleading message of the article: capitalism is not that bad for the climate.

Unwarranted chest-thumping

The more capitalist a system, the less harmful to the environment.

That is roughly the outcome of a recent study from Yale University on which the NRC article is based. In the report, the researchers arrive at a country ranking based on a variety of environmental indicators, which measure the extent to which a country meets international climate and environmental goals. The result in favor of capitalist countries seems logical: in more economically developed (read: capitalist) countries, awareness of the (destruction) of our environment plays an increasingly important role, and in combination with democratic control, this leads to less environmental damage.

However, a look at the research methodology shows that the research has an important limitation: it does not take into account the environmental damage of products that come from abroad. Quite important if you actually want to compare systems, you might think. But nothing about this in the NRC article. Also no mention of the fact that the comparison between systems is difficult in itself, because the associated economies are in different phases: obviously the more developed, predominantly capitalist economies have more progressive climate policies. They can afford this, because they have already gone through their economic (polluting) development. It remains unmentioned that this makes the capitalist system responsible for the lion's share of current global warming.

The ongoing search for universal values

But even if the capitalist system did indeed offer the best solution to global warming, we would still not make much progress. The most recent World Values Survey shows that people from different parts of the world have grown further apart in their way of thinking on important points. This time, the renowned, large-scale research covers the period 2017-2022 and shows that capitalist Western countries have become even more secularized and individualistic, while various (autocratic) regions from the global South have become even more religious and traditional.

A large part of the world is therefore still ignoring the 'universal values' of Western capitalism, or even moving in the other direction. In fact, due to the economic rise of countries such as China, India and Brazil, we now live in a multipolar world in which there are no longer any universal values, if there ever were any. These new power blocs are increasingly clashing with the West, because they are fed up with the West's moral missionary drive.

'Poldering' isn't that crazy after all

There is therefore no point in continuing to preach the capitalist gospel with associated values, especially when it comes to the climate. Of course, the West must continue to stand up for its values, but the global climate problem also requires a dose of pragmatism.

In addition, you are simply missing the point if you say that capitalism is good for the climate. If we want to move forward, we must be able to transcend systems and values. Viewed in this way, the best option for the climate really seems to be Dutch polders.