Green Capitalism is Capitalism Itself - Case Study Example

Green Capitalism is Capitalism Itself I. Introduction Green capitalism is systemic capitalism itself — and so, both critics and advocates of green capitalism declare. Although they adhere to the same premise directly and indirectly, they diverge in reasons and ideologies. The advocates claim that because capitalism is fundamental in man, putting an end to it (where liberty or individuality is curtailed) will be civilization’s own demise. The critics, on the other hand, argue that capitalism is the progenitor of ecological degradation therefore it will abolish civilization the same way in the long run. The advocates propose moderation of damages while the critics propose an overhaul of the principle of free market economies. From the thread of logic, it is conclusive that green capitalism is a resistance to curtailing the presupposed form of ‘liberty’ there is in an unregulated market. Natural capitalism is an action initiated by capitalists and capitalistic environmentalists alike as a grandiose experiment to stash the truest form of capitalism (as it has evolved now) in a sanctuary where it can enjoy from the naiveté of many; and to avoid dialogue with or outwit discreet environmentalists and Marxist’s ideologists who reside on the principle that there can never be ecological preservation with capitalism in existence. Yet so far, there is a relative success to it. II. The Triple Crunch Communities around the world admit to experiencing three types of crises with which third world economies run up against the most: energy, financial, and environmental crises. All are similar in effects in terms of equality, resource distribution, and human development. Although the three crises are interrelated, of the three confronting the world in the 21st century, climate change is perhaps the most severe and uncontrollable but it remains the second agendum next to the financial crisis. It is said that one of the major causes to this phenomenon is people’s over dependency on oil and other non-renewable gases for everyday domestic and commercial consumption. As predicted, this will lead to an energy crisis. Energy resources are unquestionably indispensable in the course of modern-day living especially to a country undergoing industrialization. There would not be any wonder if oil extracts will be lesser and lesser everyday therefore (Winter, 2006, p. 14). This is based on simple logic that natural resources are ‘naturally’ scarce but oil consumers and miners choose to think that oil is unlimited because energy experts and political authorities implant such idea to prosumers and consumers. In 1993, a news organization reported that the 700 million barrels of oil Shell Oil Company mined was only good for 42 days (16.6 million bbl/day) for the U.S. economy at that time (Bartlett, 1998, p. 3). The US economy has always been one of the world’s largest oil consumers as it is the world’s second biggest economy (only behind the European Union). Although it is a mixed market, one may not argue that it is highly capitalistic more than it is socialised. More than that, the country is probably over developed as it is now. The clincher however is that major pollutants don’t directly suffer the effects of climate change. Third world nations do which is why these the same catalysts to ecological degradation are the same agents (e.g. G7 countries) that spearhead initiatives which appear ‘globally than locally beneficial’ (e.g. Endorsement of the Tobin Tax). The worst case scenario is that they are likely solving the wrong problem. For instance in the UK, oil dependency is misrepresented (however intentional or not) by energy experts and political authorities wherein the topic for domestic consumption eats more than half the time during public discussions when in fact, domestic consumption only accounts for 30% of the aggregate consumption (Mobbs, 2005, p. 1). As made implicit, the global financial crisis of late is another serious trouble that has garnered more than enough attention (e.g. initiatives for Basel III, Solvency II) wherein the effectiveness depends on the matter of implementation or adoption. The crisis was due to an unhealthy financialisation in major international markets wherein financial institutions became submissive to too many risks and thereby, creating ineffective demand (Mueller & Passadakis, 2009). Similar to the environmental crisis, the economic problem hits third world nations at its worst. Yet unlike it, it is the main concern attended to by most capitalistic nations. III. The Green New Deal Rogers (2010) incites the fact that green capitalism have garnered considerable thought from prominent elites in society, from politicians such as US President Barack Obama to business tycoons like Sam Walton (Wal-Mart). From her point of view, green capitalism sells more capitalists into patronizing the principle and eventually implementing it into practice. Politicians, who may not effectively serve as horse’s mouths when it comes to discussing about the actual market forces, are neck-gripped by commercial elites because the former are feeding the government. The principles of green capitalism are the exact parameters to the policies stipulated in the Green New Deal. The Green New Deal aims to enhance the domestic and global financial system by making businesses green, that is, by providing green jobs (Leonard, 2010, p. 39). This will reduce fossil fuel use, thereby decreasing the presence of carbon in the atmosphere, therefore, reaching the bottom line which is protecting the environment. As the cliché goes, it is hitting three birds with one stone. It hopes to reduce the effects of capitalism upon the environment without technically compromising economic activity. The question however is if it is even possible or that if it does not write off the presumed gains to the environment when in the first place, such policies are not even legally binding in spite of the fact that it requires government intervention. Only that, this political intervention is limited in the financing (borrowing) stage. IV. Green Capitalism: Begging the Question The rise of green capitalism can have signalled two events which it tries to conceal. These are the following: 1. The rich-poor gap has widened as evident in the growing number of centralization, deregulation, and privatisation. In order to cover this ugly fact, green capitalism ensued. 2. Ecological degradation became very salient a topic for debate and which can never be solved in ways of mitigation or reduction but by direct prevention. A. Economic Instinct The case for Agricultural Powerhouse Monsanto presents a practical example (Duvall, 2008). The company focuses on energy efficiency, technological innovations for agribusiness and at the same time, on the environment. Indeed the company’s own technological innovations significantly aided its operations in terms of reducing energy usage. As a result of its operating efficiency, it was able to invest in a new $21 million data center. This new center is home to the company’s another R&D department and the provision customer value. It basically allowed the company to double its operational space, hence capacity (Duvall, 2008). Again, this is begging the question. Rogers (2010) puts forward a simple train of thought based on the capitalistic nature of man which is to maximize profit while minimizing costs as much as possible. Of course, when a firm reduces its waste production, it is reducing its spending for waste management, and when spending is reduced, there is an increase of capitalization. Because it is definitely not a business instinct to simply hoard gained capital, this capital should be profitably disposed of in the case called capital investment. In this business stage, there is increase of production and when production has doubled, it is doubling its “minimal” waste production. From the same case study, Duvall reports (2008): “Data centers typically consume 15 times more energy per square foot than a typical office building. In the U.S., data centers consume an estimated 20 billion to 30 billion kilowatt hours of electricity (about the same as the entire state of Utah) and the number of installed servers is forecasted to increase as much as 50 percent over the next three to four years...” The capitalists remain to be sole beneficiaries to the essence of natural capitalism. It is entirely one-sided and that it displaces environment as the first priority. It is still the capital that matters. The practice allows them to reduce costs and develop better managerial skills, not to mention, their manipulative nature. They incur no major losses at all. Additionally, it should not be a strange concept in commercial trade. It is mere instinct. However they should not forget that instinct are naturally disastrous. While they are disposed to think they are contributing to environmental peace, the opposite actually goes. B. Economic Guise The melting of ice caps in the north and south poles is a prima facie evidence to the harmful quantity of carbon gases present in the atmosphere. Carbon presence in the atmosphere runs forever if it goes unresolved. Global warming was the avoidable consequence to the capitalistic character of man. People all over the world feel it especially those that only have limited means to counterattack it. Based on the world’s consumption of oil, there is no arguing the point that capitalism is the main destroyer of the planet, and not the offshoot of a wrong education (Beattie, n.d.). If it ever was, then it can be concluded that capitalism is not based on the instinct of man. Recall that people perceive that they make rational decisions based on complete information as the concept of capitalism applies. Another point to consider is the fact that climate change is already at its worse. Green capitalism does not eliminate the existence of carbon in the atmosphere and that devastated millions of lives around the world slowly and instantly. It only tries to reduce it and in fact, adding up to it little by little for the next generation to suffer. As Ingulli and Halbert (2008) point out: “Pollution prevention works; pollution control does not. Only where production technology has been changed to eliminate the pollutant has the environment been substantially improved. Where it remains unchanged, where an attempt is made to trap the pollutant in an appended control device- the automobile’s catalytic converter or the power plant’s scrubber-- environmental improvement is modest or nil.” Green capitalism is highly topical among environmentalists, capitalists, and ideologists alike despite the fact that major pollutants are already performing it. There is a growing irony however. Take the cases for Ford Motor Company and WMX Waste Management Technologies as the picture. Ford Motor Corp. is religious to its social responsibility of producing environment-friendly cars (hybrid cars). In a 1999 poll conducted by Green Guide to Cars and Truck, Ford Motor Corp was enlisted as one of the worst automakers in the world where out of its ten, it produced five out of ten worst cars (Green, 1999). Until today, at least one of Ford cars never fails to be on the list. The case for WMX Waste Management Technologies somehow holds the biggest irony when it was sued by local residents in Latin American communities for civil rights violations and poisoning people and the environment (Green, 1999). This cost the company US $145 million dollars. With these facts alone, it is only reasonable to assume that because capitalism is intuitive, major corporations may not be able to implement it the way they hope to that is if they actually hope to. Therefore, there are still negative tendencies in the practice of green capitalism in spite of its purpose. The environmentalists’ proponents of green capitalism are not environmentalists in the truest sense of word. If they ever call themselves as such, then they are the same people who contribute to earth’s destruction in order to solicit more funds for personal interests. Friedman for example, proposes what he labelled as Geo-Greenism — a strategy which is built around the idea that America should be more productive, healthy, secure, and innovative where possible (Friedman, 2007). Thomas Friedman, is an epitome of capitalistic greens who believe that the world is naught without capitalism and that other forms of economic systems will always fail in practice which is not always true (e.g. communism in China). Plus, they are blind to the fact that a market economy highlighted the causes of climate change and it can’t be the solution unless it completely abolishes itself. The problem lies in the economic system per se -- not in the worsening condition of the environment that green capitalism purports to address. The greening of capitalism is not the appropriate measure because it is not even the immediate solution, assuming that the proponents value the real solution. Aside from the bilateral while unbalanced effects it yields to the market and society, it may not be necessarily a move against environmental destruction nor a social responsibility of corporations (Rogers, 2010). On another perspective, although green capitalism may not entirely eliminate harmful effects on the ecological sphere, it may also pose secondary effects to civilization. A case study presented by Horton (2004) suggests that ecotourism, which is a very good example of green capitalism in practice, is not sustainable as it aims to be nor does it provide long-term benefits to local residents. As a matter of fact, it is just the opposite. In other words, it forgoes long-term benefits for short-term profits. Horton explains that while green capitalism may reduce capitalistic impacts upon nature in the form of ecotourism or that it provides direct and indirect green employments to local residents, it produces peripheral effects on the human culture such as the increase of casual drug misuse and prostitution. More so, they create a different harmful mentality against their own native culture. These fallouts cannot be contained easily such that they will eventually become a long-term struggle to a community should it continue to permeate in the economy (Horton, 2004). In a market economy where public goods may be privatized especially land where production is completely possible and profitable, only the wealthy gains access to a wide variety of such natural resources. There is only one result to this -- increase in the gap between the wealthy few and the working class due to centralization, privatisation, and financialisation. To quote one of Friedman’s (2007) arguments: “Clean-tech plays to Americas strength because making things like locomotives lighter and smarter takes a lot of knowledge — not cheap labor. Thats why embedding clean-tech into everything we design and manufacture is a way to revive America as a manufacturing power.” Friedman’s point with regard to employing clean technology does not directly equate to expensive labor due to the fact that outsourcing labor where it is cheap is already a common business practice in the 21st century. Although this may be possible for large corporations, it may not be entirely be applicable to third world nations. Green capitalism centers on the idea that because fossil fuels and largely, natural resources are limited, it is only intuitive for capitalists to “do more with less” (Rogers 2010). This is an incontestable truth. From perspective of business and limited resources, capitalists will be provided more avenue to transform these resources into conventional profit-making inputs (e.g. ecotourism) (Bohm & Dabhi, 2009, p. 260). They will instinctively generate profits from new forms of ecological structures. The bottom line: wealth returns to its pseudo-owner which are the deep-pocketed corporate aristocrats. V. Challenges of Carbon Trading The concept of REDD (reducing emissions from deforestation and degradation) is rosy. It requires participating nations such as in the Kyoto Protocol, to reduce their carbon gas emissions below a specified level (Laurance, 2008, p. 286). Like the Global Green New Deal, REDD is a global policy, and do not legally bind participating nations. The effectiveness of REDD however depends on the massive production of biofuels which will typically increase land prices (Laurance, 2008, p. 287). This is where the government should intervene. When land is taxed high enough, production of biofuels from certain crops may not be as expensive as they can get. REDD will remain a challenge for developing nations however in that it will have to establish its carbon emissions rate from logging and forest degradation and which will technically require historical data (Laurance, 2008, p. 287). Basically, this international involvement will require technical and financial support where the US did little effort for (Laurance, 2008, p. 287). On another perspective, the problem about protecting biodiversity is another side of the story. REDD does not provide the assurance to protect the floral and faunal spheres especially in developing nations which are hot spots of biodiversities. For the above-mentioned points, carbon trading may not work practically. VI. Conclusion Ending environmental incineration without sacrificing economic development is what green capitalism purports to be. Its aims to establish that what is fundamental and progressive can coexist -- congenially. However, green capitalism, by context alone, may not produce natural impacts. Green capitalism is paradoxical in and in itself. The other expends something that the other preserves. The bottom line is that green capitalism is still capitalism in play. Capitalism only has one consequence that may be derived into two. First, the rich will continue to enrich themselves through monopolization in order to reduce competition (centralization). Second, the numerous poor continues to crawl in the dark and live in subsistence with low wages. Majority of the world’s wealth will be centralized to a few political and commercial elites; and their number will be even more inversely proportional to their power. For this reason, they will even gain greater access to public goods. Capitalism promotes freedom. Although like any other economic ideologies, it is highly penetrable by human nature, capitalism is the most vulnerable. A clear offshoot is green capitalism that may not be an opposition to anything, but is a weapon in maintaining economic sustainability, and not ecological sustainability. Man has an innate mentality that the world and all that there is in it will have to conform to his will instead of him conforming to nature’s sphere. If green capitalism continues, chances are, people in every corners of the earth will only experience storms and droughts as the seasons. Word count = 2990 References Bartlett, A., 1998. Forgotten fundamentals of energy crisis. [online] Available at: http://www.npg.org/forum_series/ForgottenFundamentalsEnergyCrisisApril1998(web).pdf [Accessed 20 Jan. 2011]. Beattie, A., n.d. Save the earth: become a capitalist. [online] Available at: http://www.investopedia.com/articles/economics/09/save-earth-become-capitalist.asp [Accessed 21 Jan. 2011]. 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