This Changes Everything: Capitalism Versus The Climate by Naomi Klein

The first thing to say about Naomi Klein’s climate change book, ‘This Changes Everything’, is actually that it doesn’t change anything at all. The cast of villains, variously self-interested, venal, corrupt, naive or weak, is entirely familiar from her earlier work, starting with No Logo: capitalism; capitalists in general; capitalists in particular (Richard Branson); NGOs in the pocket of capitalists (the Environmental Defense Fund); international organisations controlled by capitalists (the WTO); and Governments subverted by capitalists (not Bolivia or Ecuador, but pretty well everyone else). The heroes, universally idealistic, altruistic, articulate and courageous, are local campaigners, local campaigners linked together in networks, local campaigners who take control of local economies, and those who support local campaigners. Klein lets the cat out of the bag herself, when she says (Pgs 58-9) ‘I was propelled into a deeper engagement with (climate change) partly because I realized it could be a catalyst for forms of social and economic justice in which I already believed’.

So, reading this book is like slipping on a well-worn overcoat. Whether the coat is comfortable as well as well-worn probably depends on whether you are a capitalist or a local campaigner, or whether your instincts lie with one group or another. Let’s find out.

Bad Timing

The book consists of three parts. Part one, ‘Bad Timing’, jumps around a bit, but lays out the core of the argument: on the one hand, that damage to the climate is rooted in a combination of free-market fundamentalism (Pg 64) and a historic abuse of nature, dating back ideologically to Francis Bacon in 1623, and described as ‘extractivism’; on the other, that redemption is to be found in environmentally sensitive localism. Rapacious companies are in the firing line here, as well as free-market think-tanks, like the Heartland Institute, the Cato Institute or the Heritage Foundation. Free market ideology ‘suffocates the potential for climate action’ (Pg 120). Off-shoring and climate change go together, in a noxious marriage of ‘cheap labour and dirty energy’ (Pg 80). The WTOWorld Trade Organization is an ‘outrage’ (Pg 69), for example making it impossible for Governments to subsidise the re-tooling of old industrial plants to create new green industries: a ruling is cited which is said to have stopped Ontario’s green energy plan in its tracks, because local content requirements were deemed illegal. On the other hand, renewables have boomed when local movements have recaptured control of key sectors, as the voters of Hamburg are said to have done in 2013, when electricity, gas and heating grids were taken into city ownership.

Magical Thinking

Part two, ‘Magical Thinking’, takes aim at very specific targets. First, Klein attacks environmental NGOs who take money from business, aim to form partnerships with them, and generally seek to work within the system. Second, she dismisses the idea that businesses can solve the climate problem, even when they claim to be doing that very thing. Third, she sets out to demolish the case for geoengineering, arguing along the way that its most vociferous proponents are likely to make large amounts of money if their plans are realised.

As far as NGOs are concerned, many take money from fossil fuel interests: the Nature Conservancy in the US, Conservation International, the Conservation Fund, the World Wildlife Fund, even the World Resources Institute, are all said to be examples. The Nature Conservancy even drilled for oil and gas in their own reserve, endangering in the process the very birds the reserve was designed to protect, the last living Attwater’s Prairie Chickens. Other NGOs, or Foundations like the Ford Foundation, invest their endowments or reserves in fossil fuel companies. Klein concludes (Pg 198) that ‘in North America and Europe, it’s virtually impossible to do public interest work of any scale . . . without taking money of questionable origin . . .’.

Klein argues that the financial relationship subverts NGOs. For example, she says, they agree to favour market-led solutions to climate change, like carbon trading, when they should be arguing for full-blown regulation: ‘rather than . . . (treating) greenhouse gases as dangerous pollutants demanding clear, enforceable regulations that would restrict emissions  . . . these groups have pushed convoluted market-based schemes that have treated greenhouse gases as late-capitalist abstractions to be traded, handled, speculated upon, and moved around the globe like currency or subprime debt’ (Pg 199). The Environmental Defense Fund comes in for especially virulent criticism of its business-friendly approach, seeking cost savings for business, and new markets, in ‘going green’. Recently, Klein says, it has worked to legitimise fracking.  Here’s the thing, Klein says:

‘global warming was not defined as a crisis being fuelled by over-consumption, or by high emissions industrial agriculture, or by car culture, or by a trade system that insists that vast geographical distances do not matter – root causes that would have demanded changes in how we live, work, eat and shop. Instead, climate change was presented as a narrow, technical problem with no end of profitable solutions within the market system . . .’ (Pg 210).

Ouch.

Turning to business interest in the environment, the idea that green billionaires might save us, Klein dedicates a chapter, 25 pages, to demolishing the reputation of one green billionaire in particular, Richard Branson. She chooses the founder of Virgin not only because he had a personal epiphany on the importance of tackling climate change, but also because he pledged $US 3bn to develop biofuels and other technologies, money generated by his transport companies. He also set up the Virgin Earth (carbon sequestration) Challenge, and the Carbon War Room, designed to broker new cross-sector partnerships. All these sound like good ideas, but Klein is downbeat: technological quick fixes are unlikely to be found, and haven’t been; the money has not actually been spent; and, furthermore, Virgin’s carbon emissions have rocketed as the business has expanded, for example with new low cost airlines in Australia and the US. ‘Post-market crash’, she concludes, ‘and amidst ever more sinister levels of inequality, most of us have come to realise that the oligarchs who were minted by the era of deregulation and mass privatization are not, in fact, going to use their vast wealth to save the world on our behalf’ (Pg 255).

If silver bullets are not available to curb aviation and other transport emissions, nor are they the right answer in terms of geo-engineering – blocking out the sun, seeding clouds to reflect more sunlight, or fertilising the oceans to absorb more carbon. Apart from the technical problems, the geo-politics would be likely to be horrific, especially if some regions, like North America and Europe, benefit at the cost of others, inevitably Africa. Also, what happens if the technology fails or is switched off? No, Klein concludes, this is a ‘hackneyed cultural narrative’ (Pg 289) we should reject.

Starting Anyway

What’s left? We come to Part Three, ‘Starting Anyway’, with the ‘new climate warriors’ (Pg 293) and the idea of ‘Blockadia’, a ‘movement of many movements’ (Pg 290), a ‘roving transnational conflict zone’ (Pg 294), based on resistance and citizen action. The cases range from the Skouries forest near Ierissos in Greece (gold mining), to Pungesti in Romania (shale gas), Elsipogtog in Canada (fracking), Inner Mongolia, New South Wales in Australia, the Niger Delta, sites across North America linked to tar sands and the Keystone XL Pipeline, and of course the Gulf of Mexico, site of BP’s Deepwater Horizon oil spill. This is about communities organising, often in what large Governments and companies consider ‘sacrifice zones’ (Pg 310). It is about local movements linking up and making common cause. And it is a story of collusion between companies and Governments, leading to weak regulation, poor accountability and the use of state violence to suppress peaceful protest. Extractive companies work hand-in-hand with Government. They use trade law and investment dispute procedures to subvert local autonomy. They undermine democracy, leaving it ‘fossilised’ (Pg 360). ‘The collusion between corporations and the state has been . . . boorishly defiant’ (Pg 363).

Towards the end of the book, Klein is optimistic that the protestors are beginning to gain traction, for example embedding the precautionary principle more firmly, and encouraging divestment of fossil fuel holdings, for example by Foundations and Universities. They succeed by organising, as she demonstrates in stories from indigenous communities in Canada and the US, by using the law.

In addition, however, Klein talks about ‘the moral imperative of economic alternatives’ (Pg 384) and about the need not just to divest, but reinvest, for example in the green economy. ‘Blockadia’, Klein says, ‘is neither a movement of negation . . . nor solely of protection . . . Increasingly, it is also a constructive movement, actively building an alternative economy based on very different principles and values’ (Pg 405). People have the ‘right to regenerate’, to ‘move from extraction to renewal’ (Pg 419). This distinguishes Blockadia from some earlier social movements: it cannot drop out and disengage from society.

Nevertheless, and here we come to whatever the written equivalent of a peroration might be, the climate movement needs to learn from and ally with other social movements, including anti-slavery, anti-colonialism, feminism, racial discrimination, minority rights . . . ‘So climate change does not need some shiny new movement that will magically succeed where others have failed. Rather . . . climate change can be the force – the grand push – that will bring together all of these still living movements. A rushing river, fed by countless streams, gathering collective force to finally reach the sea’ (Pg 459). Pity about the split infinitive.

Three propositions

I guess I can forgive the odd grammatical solecism. Naomi Klein is well-travelled and well-informed. She paints a vivid picture and she writes with verve. I’m sure she is right that ordinary people need to be alert to the risk of climate change and to the need for faster action – and that they need to make their voices heard. But is she right in her core proposition, to quote the sub-title of the book, that this is about ‘capitalism versus the climate’? Is this really a collision of world views?

It seems to me that in order to accept Naomi Klein’s thesis, it is necessary to agree three propositions: first, that business just does not care about people or the planet; second, that business does not respond to regulations or incentives; and third, that Government is so weak and/or so thoroughly corrupted as to be unable to make rules and set incentives. Let’s take those one at a time. We will need to come back at the end to the implications for NGOs and for civil society and social movements.

Does business care?

First, business just does not care about people or the planet. What is ‘business’ anyway? Shareholders? Managers? Employees? All of the above? And not just extractives, presumably, a fairly disparate group in its own right, but all business, at all scales, in all sectors. Perhaps I have led too sheltered a life, but in my experience, quite a lot of stakeholders, in quite a lot of businesses, and in quite a lot of places, not only express concern for people and the environment, but also act on their convictions. Sometimes this is for reasons of self-interest, because companies need local support, a so-called ‘licence to operate’. Sometimes they are pushed by public pressure. Sometimes, though, it is because individuals do care about the external impact of their work.

If you doubt this, look at the wealth of evidence on business contributions to poverty reduction: companies like Unilever, SAB Miller, even extractives like Anglo American. On the environmental side, we might cite retailers like Marks and Spencers or IKEA, even Walmart on renewable energy; travel companies like TUI; and, again, even those in the extractive sector, like RTZ. By the way, I think the Carbon War Room is an interesting attempt to grapple with coordination failures in sectors such as power generation, buildings and shipping.

Many respected academics work or have worked on the topic. As I wrote in a piece on this topic in 2013 ‘there has been influential work by people like C.K. Prahalad (the Fortune at the Bottom of the Pyramid), Jane Nelson, Michael Porter (‘Creating Shared Value’) and Klaus Schwab (‘Corporate Global Citizenship’). Apart from the World Economic Forum, which has had many programmes on this topic, organisations like the Prince of Wales’ Business Leaders’ Forum, now the International Business Leaders’ Forum, or Business Fights Poverty have been sources of inspiration and innovation over many years’. There has also been a large investment in qualitative and quantitative measurement of the impact of business innovation on poverty: see, for example, this brief, produced by Caroline Ashley for theBusiness Innovation Facility, distinguishing between livelihood assessments, value chain mapping, economic modelling and indicator-based tracking. In terms of monitoring the work of individual companies useful approaches include the Global Reporting Initiative, the Global Impact Investing Rating System and Impact Reporting and Investment Standards. Fair trade provides a complementary and comprehensive approach to certification – with the Fairtrade Foundation certifying products from over 500 companies in the UK.'

Of course, it is important to be realistic, even sceptical. Not even these companies are doing enough, and many others are doing less. Only recently, the UN Global Compact, described as a ‘strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption’ announced that it had had to expel 654 companies in 2014 for not complying with their reporting rules. That was less than 10% of its membership, however, and overall numbers are still growing.

Naomi Klein’s on-the-ground case studies are not made up. Still, my judgement directs me to be somewhat more optimistic overall than she is. More important, perhaps, it also tells me that Klein needs to be more systematic and analytical in analysing this issue. Conviction gets you only so far, and the same is true of anecdote. Furthermore, there is an interesting follow-up question: how can companies be persuaded to do better with respect to corporate citizenship and social responsibility? Resistance may or may not be part of the answer, but there is certainly a role also for exhortation, persuasion and leadership. Naomi Klein should think more about how to make friends and influence people. I recommend Jonathan Haidt’s ‘The Righteous Mind’: she can read my summary and an application to climate change here. Or try my piece on How to Win the Argument on Climate Change.

Does regulation work?

Turning to the second question, can we say anything about whether business responds to regulation and incentives? Again, Naomi Klein’s case studies are not made up, and it is clearly the case that some businesses cut corners on safety and ride roughshod over local interests. However, sometimes the state fights back: Deepwater Horizon has already cost BP $US 42 bn, with perhaps another $US 13 bn to come. Will this not change their behaviour in the future, and that of others?

More generally, from a climate perspective, the evidence base should include an analysis of such questions as:

• Has carbon trading worked to reduce emissions? Or will it work better in the future?
• Have green energy levies and feed-in tariffs boosted renewables?
• Have emissions standards improved the fuel efficiency of vehicles?
• Have standards and labelling improved the efficiency of domestic appliances?
• Has public investment in areas like rapid transit, better urban design, or retro-fitting of buildings to improve insulation created new and sustainable jobs?
• Have Government-led programmes of industrial energy efficiency had an impact?

Nobody pretends that policy design is easy. You would have to be braver than I to stand up and say that the European Emissions Trading Scheme has been a great success so far. However, consider this, from UNEP’s Emissions Gap Report 2014:

‘The good news is that countries are already widely applying policies that are overcoming barriers, reducing greenhouse gas emissions and promoting sustainable development. About half the countries in the world have national policies for promoting more efficient heating and/or cooling in buildings, and about half are working on raising the efficiency of appliances and lighting. About 30 per cent of countries have programmes for sustainable waste management and sustainable forestry. . . Already 144 countries have set renewable energy targets.’

More to do, but a good start. See also the GLOBE inventory for an uptodate inventory of climate-related legislation. And, by the way, it is by no means clear that the WTOWorld Trade Organization is the enemy of action on climate change. In an analysis with Friends of the Earth in 2009, the Centre for International Environmental Law concluded that ‘WTO rules do not stand in the way of properly designed climate policies’.

This is not the place to carry out a comprehensive evaluation of climate policy around the world. However, I think Naomi Klein has work to do on the effectiveness of regulation before dismissing the potential. When she does get around to it, my guess is that she will end up with three conclusions. First, that well-designed and well-implemented regulation does influence company behaviour. Second, that policy design is highly complex from a technical perspective (and we will come shortly to the politics). And, third, that many jurisdictions lack the technical skill to design and implement high quality rules. The last point is really important. Perhaps a key conclusion from Naomi Klein’s book, one that you will not find in its 466 pages, is that Governments need to spend much more researching regulation and training people how to do it well.

Is Government complicit?

The third question is whether Government is so weak and/or so thoroughly corrupted as to be unable to set incentives. Naomi Klein is certainly not alone in being pessimistic. Writing in the Financial Times, Jeff Sachs  has recently said that

‘The real climate fight. . . .  is not about ideology but between oil companies like ExxonMobil, Chevron, and Koch Industries, and the general public. The oil groups will suffer massive capital losses when climate controls are finally instituted. Perhaps even libertarians can appreciate that the real battle is therefore over money, lots of it, and the corruption of government by that big money. . . At the end of the day, we have a classic story of political economy. There is a very concentrated but very weighty interest group with an interest in finding and pumping oil, and then there is the rest of humanity, with an interest in a rapid transition to a low-carbon future. The interest group owns Congress and much of the airwaves; it moves election results in Australia and Canada, two other carbon economies; it drives politics in the Middle East and Russia.’

This is a challenge, and plays strongly to disillusion with and disengagement from mainstream politics: we can’t trust politicians, so of course we must resort to extra-parliamentary protest. That is a view held in Europe as much as it is in North America, but it rather begs the question about the potential for climate-friendly politics. Maybe Klein and Sachs are unduly pessimistic?

In a recent piece, ‘Winning the Argument on Climate Change’, I put forward a five-point plan:

1. Find a simple way to tell the story

2. Create a positive message on the transformational benefits of taking action

3. Craft a policy package which aids transition and helps losers

4. Build a leadership group that will deliver a long-term consensus

5. Focus relentlessly on implementation

I expect Naomi Klein will say that is hopelessly naïve, but history is on my side, not hers. Leaders do make a difference, and so do parliaments. Policy packages can help craft political consensus. And public support can be cemented when change can be seen on the ground. That can even be true in North America, by the way. Has Klein read Doris Kearns Goodwin on Teddy Roosevelt and Howard Taft?  Or Robert Caro on Kennedy and LBJ?

Conclusion

Let me be clear. Naomi Klein is right to worry about climate change. She is right that popular engagement is required to drive and embed change. She is right that constant vigilance is required to protect gains. She is right to be sceptical about geo-engineering. She is right that environmental and sustainable development issues are intimately linked in frameworks of social justice (as they are in the post-2015 sustainable development proposals). She is wrong, I think, to turn this into a life-and-death battle about the private sector.

What are the implications? Popular protest and campaigning is legitimate and necessary. However, I am more sympathetic than Naomi Klein to the possibilities of redemption associated with better regulation and better business behaviour. That means I applaud campaigners who target lawmakers and Governments as well as businesses. I admire NGOs who enter into dialogue with and manage to influence business (and of course I think they should be explicit about values and transparent about funding). It is important for think-tanks to help frame political narratives and help counter interest-groups and lobbyists.

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