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Introduction

The 2015 Paris agreement was considered a turning point for global environmental governance; however, research has demonstrated that changes are not occurring fast enough (Stoner, 2020, pg.1). The necessary transformation of the global economy in the face of an unprecedented species-wide threat from climate change has been a slow process. The difficulty of keeping states at the negotiating table limits the effectiveness of punishment mechanisms for missing emissions targets. The targets themselves are not sufficient and based upon the flawed assumption that environmentally sustainable growth is possible. The underlying cause of states’ unwillingness to participate in environmental regulations originates from capitalism’s obsession with growth. This insatiable desire to grow causes an increasing expansion of production and resource extraction which depletes the environment. I will argue that capitalism’s obsession with growth is a central failing in global environmental governance. Firstly, by explaining the problem of constant growth and how it shapes climate governance. Then, by analysing the limitations of marketisation, I will then evaluate whether growth can feasibly be decoupled from carbon emissions. Finally, I will conclude by assessing whether capitalism itself prevents the necessary transformation of the global economic system to counteract climate change.

The problem of constant growth in shaping climate governance

The process of growth is central to governing capitalism, both globally and nationally, as demonstrated by the ‘Treadmill of Production’ theory which explains contemporary capitalism’s addiction to growth (Paterson, 2020, pg.6). As capital accumulates in economies, it is used to replace labour-intensive production with more productive technology to increase profits. These new technologies require more resources than previous labour-based methods. Unlike labour, these innovations represent sunk capital, so to increase profits, managers need to increase and sustain higher production levels (Gould et al., 2004, pg.296). This is because labour is easier to reduce than the fixed costs from machinery. The treadmill concept recognises that capital investment leads to increasing demand for natural resources being withdrawn from nature, and more additions to the environment in the form of pollution (Gould et al., 2004, pg.297). Each progressive round of investment worsens environmental conditions and weakens workers’ employment situation. This treadmill implies that increasing investment is needed to employ each worker. Whereas, the commodification of resource extraction for profit only increases demand for natural resources, displaying a society “running in place without moving forwards” (Gould et al., 2004, pg.297). Society is becoming increasingly reliant on the acceleration of the production treadmill, with firms investing in new technology to maintain competitiveness, which requires more resources. This results in continual investment and resource extraction to maintain employment, consumption and competitiveness.

The monoculture of the growth-focused production system is “expressly antithetical” to sustainable development goals (Gould et al., 2004, pg.306). Environmental destruction is embedded into the global economy, implicitly supported by workers and states to maintain employment, wages and living standards. Through this lens, the pursuit of growth results from demands to increase production rather than consumption. While consumer trends are important, such as demands for sustainable packaging, they do not offset the overall increase in demand motivating producers to continue the treadmill of production (Gould et al., 2004, pg.305). Increases in productivity from capital investment in technology result in higher production and profits with fewer workers. Subsequently, demands for increased employment result in further investment to generate more jobs through further increasing production (Gould et al., 2004, pg.306). Ever-increasing capital is required to employ each worker, with states needing increasing investment to grow and increase employment. The desire for continuous growth to remain competitive and provide employment is dependent upon increasing resource extraction regardless of how much growth society achieves (Gould et al., 2004, pg.306). Therefore, effective environmental governance is challenging in societies addicted to growth, as it is considered the only way to maintain competitiveness, living standards and employment.

This obsession with growth has shaped global environmental governance and limited its effectiveness. The 1972 Stockholm conference provided the first multilateral framework for environmental governance. However, developing states considered boycotting because the demand for environmental protection came from rich states who had already industrialised and thus already passed their peak pollution levels (Najam, 2005, pg.307). Therefore, developing states argued environmental protections would prevent growth and keep them poor, as rapid growth is needed to address more immediate poverty problems and improve living standards (Najam, 2005, pg.308). This tension between developed states’ environmental concerns and developing states arguing for industrialisation and growth sets the pattern for future attempts at global environmental governance. As a result of these tensions, the conference produced few practical agreements. However, it did raise the issue at the international level for the first time (Najam, 2005, pg.309).

The 1997 Kyoto Protocol set out to collect information on emissions and for states to draft plans and cooperate at the international level. Non-legally binding targets were based on what individual states were willing to agree to and factored in developed economies historical emissions, giving them higher targets than developing countries, with only 38 states having quantifiable targets (Payne and Phillips, 2014, pg.286). Technically, the Kyoto protocol was a success as emissions cuts were greater than targets. However, the US left the agreement, and China had no targets, so the two biggest polluters were not affected by the protocol. Despite an almost universal membership, the agreement’s utility was limited. The restrictions were an incentive to abandon the agreement for some, like the US, who claimed it went against their national interests (Payne and Phillips, 2014, pg.421-422). This demonstrates the difficulty of keeping nations at the negotiating table as states prioritise their competitiveness. This means the governing framework needs to appeal to nation’s interests to prevent states from leaving, such as maintaining growth and competitiveness.

The 2015 Paris Agreement was seen as a leap forward for global environmental governance; however, it will still not be enough to avoid the climate crises. The intent was to keep global temperature increases below 2°C above pre-industrial levels and ideally below 1.5°C, which would still cause enormous environmental damage (Stoner, 2020, pg.1). The agreement was designed to be flexible with nationally determined contributions and states frequently meeting to discuss their progress. There were no sanctions or legally binding mechanisms; rather, states would be constrained by public statements of their national goals. There were no incentives to leave, meaning a minimal framework could be agreed to keep all states at the negotiating table. However, even this minimal framework has been opposed by populist leaders, who believe national economic policy should be the priority (Newell, 2018, pg.40-42). While Paris attempted to recognise the primacy of domestic policy while signalling the international priority of climate change to markets, the lack of penalties and nationally-set goals limited punishment mechanisms to peer pressure between states (Newell, 2018, pg.41-43). International pressure will not constrain every state, as demonstrated by the US, so while allowing states autonomy, it is not doing enough to enforce emissions targets. A 2018 UN Report raised concerns that even a 1.5°C rise will cause catastrophic damage. Begging the question of whether the Paris agreement will achieve enough, in time to make a difference (UN, 2018). Environmental governance has evolved into a realistic, minimal framework. However, the core problems centre on making states engage and keep participating, while stimulating enough change to make a difference in time. The use of concepts such as green growth are used to motivate states by allowing growth while attempting to offset environmental damage. Nonetheless, these growth-based solutions are part of the problem and are not effective

The limited success of marketisation

The marketisation of climate governance uses capitalism’s preoccupation with growth to motivate actors to cut emissions by creating carbon markets. There are several examples, mainly focused on Carbon Trading Schemes (CTS) and carbon offsets. Supporters of market-based policies argue it unleashes the private sector potential to solve climate problems. However, critics argue CTS give firms a license to pollute, weakening environmental regulation (Stoner, 2020, pg.2). CTS requires political authorities setting caps on industries and allocating tradable pollution permits to firms. If they exceed these limits, heavy fines occur, but cutting emissions below the target means they can sell their excess permits to other firms. Whereas carbon offsets give businesses carbon credits in exchange for clean development investments elsewhere, usually in the developing world, allowing firms to pollute over their allowance at home (Meckling, 2011, pg.48-50).

These market-based solutions have several limitations. CTS commodify the atmosphere, and permit allocations reflect political power imbalances between powerful economies and developing states. This can lead to the grandfather problem, where locations of allowances are based on current emissions. The EU and US have 10% of the world’s population, despite being responsible for 45% of emissions while having higher pollution permit caps than developing countries (Bachram, 2004, pg.5). This means that rich countries which have been historically high polluters can still pollute while developing countries are squeezed despite polluting less overall. This carbon colonialism causes friction between developed and developing countries, which are forced to reduce emissions while rich countries previously polluted their way to wealth (Bachram, 2004, pg.10-11).

Carbon offsets are also a flawed concept. Investing in planting trees as carbon sinks will take a decade to offset the emissions from businesses (Bachram, 2004, pg.10). The scientific consensus is that carbon stored in trees is not equivalent to the carbon previously-stored below-ground in fossil fuels. However, entrepreneurial companies have been quick to create tree plantations and propagate the idea of consumers not needing to change their lifestyles (Bachram, 2004, pg.10). In addition to spreading the false logic that being carbon neutral merely involves planting trees, most of these projects occur in the global South. Carbon offsetting projects can cause population displacement, biodiversity damage, and dangerous working conditions in the developing world. The exploitation of the global South by developing countries is exacerbated by offset programs only counting towards carbon credits if they are ‘officially’ managed (Nel and Hill, 2014, pg.22-26). This means that ancient rainforests with biodiversity and indigenous people do not count, while monoculture tree plantations run by private firms do. This represents one of the significant structural impediments to reducing emissions through marketisation. Developed states believe they do not have to change their lifestyles. To maintain their living standards they merely pay for quick fixes and for developing states to have low carbon lifestyles (Stephan and Paterson, 2012, pg.546-549). Additionally, the calculation of carbon credits comes from estimating potential emissions produced without this investment, which can lead to polluters making huge estimates to gain more credits. Resulting in greater pollution by businesses, only limited carbon offsetting in the future, and increased corporate profits (Bachram, 2004, pg.7-8). 

Therefore, even under the best-case conditions, market-based solutions are unlikely to achieve the Paris agreements inadequate emissions reductions. However, if more stringent regulation was imposed, then the attractiveness of these growth-allowing minimal frameworks would diminish. CTS’s adoption reflects the neoliberal ideology’s pervasiveness, demonstrating that more strict regulatory frameworks are unlikely to be supported by states. Ultimately, trading commodified rights to pollute only serves actors with the most to lose from resolving the climate crisis by changing the current world order (Bachram, 2004, pg.19). The discourse that blames the global South for attempting development and growth ignores that richer countries caused this ecological disaster through historical and continuing over-consumption of resources (Bachram, 2004, pg.20). This suggests that market-based emissions trading and offsetting, which are presented as the solution, are part of the problem.

Can green growth feasibly be decoupled from carbon emissions?

Green growth emerged in 2012 at the Rio Conference. It is a “relatively new and still amorphous” concept, seeking to balance long-term sustainable investments with near-term income growth to reduce poverty (Smulders et al., 2014, pg.423). The World Bank defines green growth as “efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts” (World Bank, 2012, pg.2). The intent is to limit each percentage of GDP growth’s ecological impact, to allow production and consumption to increase with no negative impacts. These attempts to decouple growth from environmental impact are seen as the most appropriate model for capitalist economies with an insatiable desire for growth. They have become the “dominant response to increasingly serious warnings about climate change” (Hickel and Kallis, 2019, pg.469).

However, this is unsustainable and based upon the flawed assumption that absolute decoupling of growth from resource consumption and emissions is feasible at a rate that can prevent ecological collapse (Hickel and Kallis, 2019, pg.469). Absolute decoupling is not possible in terms of resource extraction, which is required to maintain and expand production and consumption. The World Bank seeks to “minimise” growth’s environmental impact. However, this impact cannot be minimised without reducing pollution, and definitely cannot be achieved by further increasing production and resource extraction (Hickel and Kallis, 2019, pg.470). It is not sufficient to minimise environmental impact; it must be reduced to safe and sustainable levels to prevent further damage. Ruminants and flying need eliminating, and radical breakthroughs in construction and manufacturing need to occur to achieve net-zero emissions by 2050 (Paterson, 2020, pg.3). Therefore, Green growth is a fallacy because growth cannot be feasibly decoupled from carbon emissions. Absolute and permanent decoupling cannot be globally attained even under highly optimistic projections. However, capitalism’s investment and technological dynamics may allow it to shift to renewable energy from fossil fuels quickly (Paterson, 2020, pg.8). While possible in high-income countries, the politically rewarding shift to renewable technology from fossil fuels still relies upon massive resource extraction of rare minerals, such as lithium, from developing countries. Therefore, while it is potentially possible for developed countries to decouple growth from carbon emissions, its reliance upon resource extraction and pollution in the global South makes it unsustainable in the long term (Hickel and Kallis, 2019, pg.483). 

Additionally, the decoupling rate required to achieve the 1.5°C or even 2°C Paris target is unlikely to be achieved based on empirical evidence. Current technologies have allowed decoupling in some industries and regions; however, absolute global decoupling is unlikely to be achieved even under optimistic predictions (Hickel and Kallis, 2019, pg.483). This questions the legitimacy of the World Bank and other organisation’s efforts to pursue green growth policies to prevent catastrophic climate change. While green growth is a theoretical possibility, it is not feasible with the necessary timeframe or current technology. Instead, it is more plausible that emissions targets will be reached without growth than with continued growth (Hickel and Kallis, 2019, pg.483). Furthermore, for efficiency gains to be effective, reducing aggregate economic activity through degrowth policies may be required - an unthinkable suggestion for many contemporary capitalist economies. Transitioning to a sustainable economy has potentially high adjustment costs and significant labour underemployment if the change isn’t gradual (Smulders et al., 2014, pg.441). However, there are no scientific grounds to support continuing growth if we wish to prevent overconsuming beyond our planet’s resources. Combatting climate change may require a shift away from green growth policies and changes in patterns of consumption away from carbon-intensive sectors in order to prevent disaster (Hickel and Kallis, 2019, pg.483). States are unlikely to accept limits on growth; this obsession has constrained international conference solutions to still include growth despite lacking feasibility and scientific support. Therefore, the underpinning assumptions of the global economy, including the centrality of growth, must be re-evaluated in the face of climate change (Paterson, 2020, pg.6). The need for allowing continued growth to incentivise states to reduce emissions will not prevent catastrophic climate change and is a central failing of global environmental governance.

Does capitalism itself constrain transformation?

The contemporary global capitalist system needs transforming to prevent disaster, with a change in ontology required for high-consumption countries. However, global governance’s existing focus on generating stability after the 2008 financial crisis will not support necessary transformative change to adapt to climate change (Paterson, 2020, pg.9). Within the current capitalist system, it is “not politically acceptable to question economic growth” and “no nation” would voluntarily limit growth to prevent climate change (Hickel and Kallis, 2019, pg.483). Environmental governance makes states less efficient, and not increasing growth leads to stagnation, a key issue for modern economies. Stagnation leads to a fall in competitiveness, less employment and growing demand for state welfare. This makes continuous growth hard to relinquish as a governing goal for modern capitalist economies, and societal pressure often prevents states from doing so (Clift, 2014, pg.182-185). However, this rationale prevents the necessary adaptions and reductions in production and consumption needed to prevent ecological disaster.

There is some degree of ideational embeddedness in the globalised economy, with states perceiving all other states as continuing to pursue growth. This creates a first-mover disadvantage for any state pursuing growth-limiting policies, which could lead to stagnation or degrowth (Hay and Rosamond, 2002, pg.148-151). If a critical mass of states acted together, it could lead to changes in embedded conceptions of the necessity of growth in the global capitalist system. However, it is more likely that the state which moves first will suffer high unemployment, making other states less inclined to pursue these policies. This presents a concerning collective action problem, where states believe other states will always want to continue growing. Thus, are unwilling to reduce growth themselves to support this public good (Brechin, 2016, pg.846). Instead, states may believe there will be technical fixes for the climate crisis, and rely on developing new technology to increase efficiency, reduce emissions and capture carbon. This can be seen through investment in biotechnology to replace petrochemicals with renewable alternatives (Richardson, 2012, pg.282). However, this reliance on technical solutions is part of the capitalist ontology, where investment and growth can result in new technologies and increased efficiency. This is a result of states inability to give up on growth as an objective. Meaning they treat climate change as a technical issue rather than a social problem (Brechin, 2016, pg.849-850).

Sustainable policies cannot be implanted fast enough to counteract growing emissions from states addicted to the treadmill of production. The environmentally essential is politically impossible, while the politically acceptable is environmentally disastrous (Hickel and Kallis, 2019, pg.483). States must recognise that growth may not always be sustainable. Unsustainable growth can be more damaging for states than stagnation and unemployment if it leads to environmental collapse or conflict over scarce resources (Paterson, 2020, pg.3). Therefore, attempts at global environmental governance should not be based off of policies including growth to prevent climate change; however, this radical change in policy from the capitalist orthodox is unlikely. Therefore, capitalism itself constrains the necessary transformations needed to avert the climate crisis.

Conclusion

The insatiable demand for constant growth by capitalist economies is the central weakness in global environmental governance. The treadmill of production forces states to keep growing to remain competitive and prevent stagnation while increasing resource extraction. Market-based solutions designed to appeal to capitalist states have proven ineffective because the intent is to still permit economic growth, which inevitably causes further environmental degradation. Meanwhile, green growth initiatives intended to incentivise capitalist states to act more sustainably have proven fallacious. Continual resource extraction is at odds with environmental protection, and it is inconceivable that capitalist states will stop pursuing resource extraction to continue growing. This presents a problem. If states continue attempting to grow, they will run out of resources. This will this lead to conflict over limited resources, stagnation and unemployment, and create an uninhabitable environment. Capitalism will reach a point where our planet can no longer sustain it, because of its insatiable desire to grow. This raises the question of whether the continued pursuit of capitalism is worth the cost of making our planet uninhabitable. Ultimately, new interaction methods need to be developed to permit development and acceptable living standards without the continued economic growth and resource extraction demanded by the capitalist orthodoxy. Therefore, the failures of global economic governance can be explained by capitalism’s unrelenting desire for growth.

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