Capitalism and Climate Collapse

The claims that capitalism is the cause of climate change and that catastrophic climate collapse cannot be avoided under capitalism are as obvious to some people as they are nonsensical to others, but really they are neither. They are probably true, which implies that they are not nonsensical, but their (probable) truth is not obvious. They are not obvious, because these claims depend on four other claims that are themselves non-obvious: (1) capitalism requires economic growth; (2) economic growth requires energy growth; (3) energy growth requires extensive use of fossil fuels; and (4) extensive use of fossil fuels causes climate change and make catastrophic climate collapse unavoidable.

1 — capitalism requires economic growth

As Geoffrey Hodgson has pointed out in his analysis of the nature of capitalism, one of its key features is “a developed financial system with banking institutions, the widespread use of credit with property as collateral, and the selling of debt”.¹ Debt, indeed, plays a central role in capitalism. To a large extent, capitalism is funded by means of debt – it depends on debt-funded growth — but with debts come interest payments. If some household, company, or state borrows a sum of money \(x\), and needs to pay interests \(y\), then it can only do so if it expects to have \(x+y\) at some later date, or in other words, if it expects to have more money later than it has now. If it fails to gather \(x+y\) in time, it cannot pay what it owes to the financial industry (FIRE) and will go bankrupt. The problem is that this does not apply to a single economic actor, but to very many at the same time, and consequently, all of those together must have more money later than now, which can only be the case if the economy grows (i.e., if there is more money in the economy as a whole later than now). Without economic growth, debtors can no longer pay what they owe to the financial industry and go bankrupt.²

Obviously, the foregoing depends on interests \(y\) being greater than zero. If y=0, then all that a debtor has to repay is the original sum of their loan x, and therefore, if \(y=0\) in all cases, there is no need for an increase of the total sum of money in the economy. Or in other words, if there are no interests on loans (at all!), there is no need for economic growth. This is possible in principle, but only if finance would be a state-owned nonprofit social service, rather than a for-profit industry. And since “a developed financial system with banking institutions” and so forth is a defining feature of capitalism (as Hodgson pointed out), this would not be a capitalist economy.³

Hodgson’s analysis of capitalism isn’t the only one, of course. Perhaps, the most famous is Karl Marx’s Capital, and you don’t have to be a Marxist to accept Marx’s insight that is most relevant here. In chapter 4 of Capital, Marx distinguishes two kinds of commodity circulation described by two different formulas: \(C−M−C\) and \(M−C−M\), in which \(C\) stands for commodities or goods and \(M\) for money. \(C−M−C\) is the basic or traditional model in which one produces goods to sell some or all of them to make some money to buy other goods one needs. Historically, most economic activity by people has taken this form: you make something to sell, so you can buy the things that you don’t make yourself. Capitalism is – more or less – defined by the economic dominance of the second formula, \(M−C−M\), however. What distinguishes the traditional or “simple” commodity circulation from the circulation of money under capitalism is that “there [i.e., in the former] commodities are the starting point and end point [or goal], while here [i.e., in capitalism] money is the starting point and goal”.⁴ “The \(C−M−C\) circulation is fully completed as soon as the sale of a commodity brings in money that is subsequently removed [from the circulation] by the purchase of other commodities.”⁵ The goal (and endpoint) of the \(M−C−M\) circulation, on the other hand is not to obtain commodities (that one needs or wants), but money itself. “Its driving motive and determining purpose is, therefore, exchange value itself”.⁶ However, “one sum of money can be distinguished from another only by its amount”,⁷ and consequently, “\(M−C−M\)” is not an entirely accurate description of the capitalist commodity circulation. Specifically, the first \(C\) is not equal to the second. “The complete form of this process is \(M−C−M’\), where \(M’=M+\Delta M\), that is, equal to the originally advanced sum of money plus an increment”.⁸ Marx calls this increment “surplus value”, and it is this surplus value that is the capitalist’s goal.

Notice that Marx’s analysis doesn’t imply that under capitalism \(C−M−C\) is the only commodity circulation. In the contrary, for most people the traditional \(C−M−C\) (making something to make money to buy what you need) may better describe their economic activity. (Although in a capitalist economy that first \(C\) might represent mere labor for most people.) However, what distinguishes a capitalist economy from a non-capitalist economy is the economic dominance of the \(M−C−M’\) circulation. What drives the economy is not \(C−M−C\) (as in a traditional or pre-capitalist economy), but \(M−C−M’\). This is important, because \(M’=M+\Delta M\) and \(\Delta M\) is supposed to be a positive number, or in other words, \(M’ > M\). The point of the capitalist circulation is “surplus value”: it is to have more money after each cycle than before. Given that \(M−C−M’\) is economically dominant in a capitalist economy, this is only possible if the total amount of money in that economy grows. If it wouldn’t grow, then if for some people in the economy \(M’ > M\), this would imply that for others \(M’ < M\), or in other words, they are getting impoverished by the enrichment of the few, but that is possible only up to a point, and would lead to stagnation and collapse soon. Except on the short term, the only way that \(M'\) can be larger than \(M\) for a substantial number of economically significant agents is if \(\Sigma M' > \Sigma M\) (i.e., \(\Delta \Sigma M > 0\)), that is, if the total amount of money in the economy grows. That is economic growth.⁹ \(\Sigma M’ > \Sigma M\) is economic growth, and thus, without economic growth the capitalist \(M−C−M’\) circulation is impossible (except on the very short term). Without economic growth a capitalist economy collapses.

Critics of capitalism commonly assert that the capitalist aim for infinite growth is deeply problematic and/or aiming for the impossible. Often this is expressed by variants of the claim that “growth for the sake of growth is the ideology of the cancer cell”, variations of which first occurred in Edward Abbey’s The Monkey Wrench Gang (1975).¹⁰ The cancer analogy fails, however, and actually evinces a lack of understanding of the nature of capitalism and of economics.¹¹ In some sense, capitalism – like a cancer cell – aims for growth because it cannot do otherwise. Aiming for growth is its nature. But this doesn’t mean that capitalism aims for economic “growth for the sake of growth” – rather, it aims for growth for the sake of avoiding economic meltdown. Unlike a cancer cell, capitalism needs growth – it cannot function (or survive) without it. Furthermore, there is no a priori reason why infinite growth is impossible. (More about the latter in the next section.) The cancer analogy would make sense if growth would be \(M’ > M\) while \(\Sigma M’ = \Sigma M\), or in other words, growth within a context of a fixed total amount of money (i.e., the cancer grows relative to the host/patient). But while this analogy would make some sense, it would not be an analogy of economic growth, because that is an increase of \(\Sigma M\) (i.e., \(\Sigma M’ > \Sigma M\)). Economic growth is not like a growing tumor in a host/body of a relatively fixed size, but would be like the growth of that host/body itself, but that doesn’t work as an analogy, because unlike economies, most organisms cannot grow infinitely (and most organisms die, which is another major disanalogy).

On the other hand, while the cancer analogy is misleading as an analogy of economic growth, it is not a bad analogy to illustrate the necessity of growth. The reason for this is the corollary of the reason why it is misleading as an analogy of economic growth: in the analogy there is no growth (of the economy; or of the body of the host/patient in the analogy). In a body of fixed size, the cancer just keeps growing until it kills the patient. In an economy that cannot grow, its “cancer” analogues keep growing until they kill the economy. These analogues of the cancer cells are individual for-profit corporations and investors.¹² Recall that the \(M−C−M’\) cycle is economically dominant in a capitalist economy (by definition). That is, the dominant economic activity is aimed at increasing the amount of money held by individual corporations and the people investing in them. (And then increasing that again, ad infinitum.) This is just another way of saying that corporations and investors aim for profit. Hence, there is a dominance of \(M−C−M’\) cycles at the level of individual agents (or cells) in a context of fixed \(\Sigma M’ = \Sigma M\) (total money; the size of the economy as a whole).

If the cancer patient’s body would be growing faster than the cancer (and not by becoming morbidly obese!), the cancer wouldn’t be a problem, but this is impossible, of course. In case of economies this is possible, however – as long as the economy grows at least as fast the “cancers” (i.e., corporations and investors) within it, it’s perfectly healthy. The patient’s body doesn’t grow, and so the cancer slowly (or sometimes quickly) overwhelms the healthy cells and kills the patient. More or less the same happens in an economy that doesn’t grow. Like real cancer cells, the economic “cancers” are more or less programmed to grow themselves (i.e., to increase \(M’\) relative to \(M\)), but if the economy doesn’t grow, they can only do this by impoverishing others (other people and/or other corporations). This cannot go on forever, however – sooner or later bankruptcies and poverty undermine the possibility to make a profit, and the economy “dies”. (Perhaps, it is for this reason that in pre-capitalist societies (such as feudal societies) that don’t experience significant economic growth, the profit motive (i.e., the \(M−C−M’\) cycle) is (or was) generally frowned upon or even taboo. This was as much the case in feudal Europe as in China, for example.)

In response to sentiments like that expressed in Abbey’s analogy, there has been a fringe movement within economics since the 1970s advocating “degrowth”. It aims to reduce the size of mainly Western, industrialized economies to create more sustainable societies. Because of the climate crisis, this movement has become slightly less “fringe” in the last decades, leading to a significant increase in research on the idea of degrowth and the related but older idea of a steady-state economy, an economy that does not grow. The most important conclusion that has been drawn from that research is that “recession and depression are possible within capitalism; degrowth is probably not”.¹³ The adjective “probably” seems overly cautious here. Because of the debt-dependence of capitalist growth and because of the very nature of capitalism (i.e., the economic dominance of \(M−C−M’\) circulation), capitalism without economic growth is fundamentally impossible (except for short periods of crisis, of course).

2 — economic growth requires energy growth

Mainstream economists believe that economic growth can continue forever, because their models make three important assumptions. (1) They assume that resources are more or less unlimited, and that even if some resource runs out, thanks to human inventiveness an alternative will be found and growth can continue. (2) They mostly ignore pollution or treat it as a local effect that makes some resource unavailable (or overly expensive), requiring substitution of an alternative (or investment to make the local resource available again). And (3) they ignore the role of debt. These assumptions are defensible. Thus far we have always been able to find alternatives when a resource was depleted or became too expensive, and thus far pollution has always been a local problem with fairly limited economic effects. (Besides, sooner or later cleaning up pollution will become profitable, so the problem will solve itself.) And if the financial industry is treated like any other industry, then debt doesn’t seem to be a problem either, because it just concerns financial relations and obligations within industry as a whole. That these assumptions are defensible doesn’t mean that they are right, however. It is worth paying closer attention to the nature and sources of economic growth.

Above, I suggested that economic growth is something like an increase of the total amount of money in an economy – \(\Sigma M’ > \Sigma M\) or \(\Delta \Sigma M > 0\) – but this is not exactly correct.¹⁴ Economic growth is not really an increase of the amount of money itself, but is measured as an increase in the monetary value of production and consumption. More specifically, economic growth is an increase in the gross domestic product (GDP) of an area, usually a country, and GDP is the sum total of all final goods and services produced in that area measured by their market value. So, economic growth is an increase in production in terms of market value. This implies that there are two ways in which an economy can grow: increasing production and increasing market value (i.e., rising prices). Let’s look at the second first.

An increase of prices (i.e., market values) across the board is not economic growth, but inflation.¹⁵ For an economy to grow merely due to increasing prices, it must concern a few economically dominant commodities, and leave most other prices relatively unaffected. The economy of an oil-producing country can grow due to a rise of the oil price, for example. However, this dampens growth elsewhere, as oil-importing countries will have to pay more for their oil. Growth due to price increases is always regional or even local and can never be global. On a global level, increasing prices cannot lead to (global) economic growth. Furthermore, even regionally/locally economic growth due to market value increases tends to be rather ephemeral. Prices of commodities affect each other, so price increases of a single commodity or small number of commodities soon lead to other price increases. But there are also other kinds of economic interdependencies that have balancing or averaging effects. For these reasons, increasing market values do not really cause economic growth, but merely cause spatial and temporal disturbances and inequalities that average out on larger spatial scales and over longer times.

This leaves the other source of economic growth. If market values are constant, an economy can grow in two, and only two ways: either by making more people produce things or by making people produce more things per person. The former requires population growth or the entrance of previously non-working groups into the labor force. From an economic point of view (but probably not just from an economic point of view), one of the most important inventions of the 20th century was the washing machine because it allowed women to start working outside the house.¹⁶ Although this made an important contribution to economic growth in the second half of the 20th century, the second source of economic growth, an increase in “productivity”, is by far the most important.¹⁷

Productivity growth is an increase in the total market value of goods and services produced per producer or worker. Or to put it the other way around, it is producing the same amount of things measured by their market prices with fewer people. In the short term, productivity can increase and decrease for all kinds of reasons. If a product suddenly becomes fashionable and consumers are willing to pay more for it, then the market price of that product rises and its producers, therefore, become more “productive”. In the longer term there is really just one source of productivity growth: a substitution of energy for labor. If you own a shoe factory and you want to produce more shoes, then you can either hire more workers or buy some machines to do part of the work. However, running those machines requires energy, which is the main reason why productivity growth is really a substitution of energy for labor. And since economic growth depends on productivity growth, this implies that economic growth requires an increase in energy consumption (which in turn requires an increase in energy production, of course).

Almost all historic productivity growth has depended on cheap energy. We burned coal to allow workers to use machines to produce more, and when oil became cheaper, we switched to oil. While there have been and continue to be changes in the sources of energy, one thing has remained the same: to produce more with fewer workers, you need more energy as an input in the production process. Most of that energy comes from fossil fuels. An increasing but comparatively very small part comes from nuclear energy and other alternative sources, but fossil fuels – coal, oil, and gas – remain the dominant sources of energy.

Substituting energy for labor also frees up labor, which can then be used elsewhere. Hence, cheap energy made the growth of the tertiary/services sector possible. Without cheap energy there would have been no “post-industrial” society. The notion of a “post-industrial” society is a bit peculiar, by the way. The tertiary sector doesn’t make the food we eat, the clothes we wear, and the houses we live in. It merely helps in making those available and facilitates or streamlines various other aspects of production and distribution. It is, of course, possible for a country to completely stop manufacturing and primary production (agriculture, mining, fishing, etc.), but only by importing everything it needs. “Post-industrial” societies are as dependent on manufacturing industry (as well as primary production!) as any other society.

In the 20th century, most economic growth has been related to the shift from primary and secondary production to the tertiary/services sector, which now produces around three quarters of GDP in most advanced economies. However, this shift was only possible by a massive substitution of energy for labor (through automation) in the primary and secondary sectors. Because services are now such a big part of most economies,¹⁸ a country’s economic growth can entirely depend on the growth of this sector, while the primary and secondary sectors economically decline. (This doesn’t mean that they produce less; merely that their aggregate production becomes less valuable on the market.)

While most of the tertiary sector contributes to the economy by facilitating or streamlining aspects of production and distribution or by doing things for us (or for companies) that we’d otherwise have to do ourselves (or themselves), there’s a part of this sector that depends on an entirely different business model. The financial industry offers financial “services” such as insurances and loans, but it’s main source of income and the focus of all its activities is extraction. Contrary to the rest of the tertiary sector, it offers little in terms of facilitating or streamlining aspects of production and distribution. Rather, it makes money by extracting money from the rest of the economy wherever and in any way it can. This is a topic I (and many others) have written about before,¹⁹ so I won’t say much about it here, but it does have some implications that matter here (albeit more for the topic of the previous section than for this one). Because the financial industry mainly makes money by extracting it from the rest of the economy, this means that the rest of the economy needs to keep up with the growth of the financial sector to avoid de facto decline. This is another reason why under capitalism economic growth is necessary: to feed the hunger for money of the financial industry.²⁰

3 — energy growth requires fossil fuels

Economic growth depends on a substitution of energy for labor in the production process, but this is only economically feasible if energy is cheap.²¹ Hence, economic growth depends on the availability of cheap energy. Fossil fuels are extremely cheap, and are made even cheaper by means of government subsidies. According to the IMF, global fossil fuel subsidies amounted to 5.9 million US dollars in 2020 (6.8% of global GDP!), and are expected to rise further.²² Switching such subsidies to benefit alternative sources of energy would make those more competitive, but probably not competitive enough, and there are other problems and limitations as well.

To assess the economic potential of a source of energy, many factors need to be taken into account, and overly optimistic predictions of our potential to avoid climate breakdown tend to ignore some of these factors. The price of energy is partially determined by some of those other factors, but they do not just affect price. Many of the relevant factors are not independent from each other either, moreover.

Possibly the most important factor determining the economic potential of a source of energy is efficiency or EROI, which stands for Energy Return On Investment.²³ EROI is energy delivered divided by energy required for that delivery. For a type of power plant that has an EROI of 3, of every three power plants of that type, one is running just to produce the energy needed for those three plants to run. So, one third of the energy produced is used just to produce the total amount of energy, and the efficiency of the system is, thus, two thirds (i.e., the remainder). In other words, efficiency is 1 – EROI^-1.

An EROI of 3 or efficiency of 67% is usually considered to be sufficient for a source of energy to be economically feasible, but the higher the EROI, the more attractive that source of energy, because it means that you have to waste less energy to produce energy. The EROI of most fossil fuels has been in the range of 40 to 80 for most of the 20th century (with exceptions on both sides of this range), but has been decreasing and is expected to decrease further. Most alternative sources of energy – except hydropower – can not (yet) compete with that. Hydropower (i.e., dams) have an EROI of well over 100, but have other limitations. The EROI of wind and solar depends very much on technology, but even more on whether the necessity of storage/buffering is taken into account. Storage/buffering is needed because the wind doesn’t always blow and the sun doesn’t always shine.²⁴ If this is ignored, the EROI of photovoltaic cells and wind turbines tends to be between 6 and 20, although some manufacturers of wind turbines boast EROIs of 30 or more. If storage/buffering is taken into account, these EROIs should be divided roughly by 4, so, if we round up: 2~5. That is nowhere near the numbers for fossil fuels.²⁵

Nuclear power (fission) has an EROI of 5~15, but this might be increasing for smaller, modular plants that have been developed in the past decades. The efficiency of nuclear fusion is measured as \(Q\), but most mentions of \(Q\) are deceptive. The efficiency of of nuclear fusion plant should be measured by taking all energy required into account, but typically, \(Q\) divides energy produced by the energy that goes into the fusion reaction only, ignoring all the energy required to do that. Let’s denote the amount of energy produced by the fusion reaction \(E_P\), the amount of energy that goes directly into the core of the reactor and that brings about the fusion reaction \(E_R\), and the total amount of energy needed to run the fusion power plant \(E_T\). Then, \(Q\) is typically calculated as \(E_P / E_R\), while EROI is (more or less) defined as \(E_P / E_T\). The larger, the amount of energy needed to deliver energy into the reactor – or in other words, the larger \(E_T / E_R\) – the greater the discrepancy between \(Q\) and EROI. And obviously, if that discrepancy is particularly large, then the claim that break-even has been reached when \(Q = 1\) is really quite nonsensical.

Currently, the record efficiency for fusion is \(Q = 1.5\).²⁶ I don’t know \(E_T / E_R\) for that experimental fusion plant, but usually \(E_T / E_R\) is more than 100. Let’s say that it’s 100 exactly in this case, then this would mean that EROI is 0.015. The most advanced experimental fusion plant that is currently being built is ITER, which is expected to become fully operational in 2035 and hoped to reach \(Q > 10\). If it also somehow manages to bring down \(E_T / E_R\) to 50, then this would result in an EROI of 0.2 or a little bit more. If there somehow is a miraculous jump in fusion technology in the coming decade due to an unexpected revolutionary breakthrough resulting in \(Q = 25\), and another equally unexpected revolutionary breakthrough brings down \(E_T / E_R\) to 25 as well, then EROI is still only 1 (which still means that the plant uses as much energy as it produces), and this is surely a science fiction scenario. If we descend from cloud-cuckoo land to the real world, it is more plausible to expect that an economically interesting EROI of 3 or more might (perhaps) be reachable some time in the second half of the current century, if we somehow manage to avoid collapse before then.²⁷

A second factor (or collection of factors) that needs to be taken into account is the price, availability, and side effects of fuel in a somewhat loose sense of “fuel”. In case of solar and wind energy that “fuel” (i.e., sunlight and wind) is free, of course, but its availability is limited because there isn’t always sufficient sunlight or wind. The “fuel” of hydropower, water, is free as well, but is becoming less reliable due to droughts and other extreme weather. Uranium (for nuclear fusion) is relatively rare and expensive and mining it isn’t particularly environmentally friendly, but thorium might be an alternative, and breeder reactors could significantly reduce dependency on mining (and probably also fuel costs). Nuclear power, then, is likely to become cheaper and more environmentally friendly in this respect. Fossil fuels remain much cheaper, however, and available in abundance. (Peak oil was/is a myth.) It is worth repeating that this cheapness is largely due to fossil fuel subsidies, however. What makes fossil fuels more attractive than other fuels is primarily their availability. Wind and sunlight aren’t nearly as reliable as fossil fuels, which can be stored and transported relatively easily to be available anywhere and anytime to be converted in other kinds of energy.

A somewhat similar factor (or, again, collection of factors) is the price, availability, and side effects of the resources necessary to build infrastructure. Wind turbines require a lot of steel, for example, as well as glass or carbon fiber, copper, aluminum, concrete, and/or other materials. Making steel uses coal and a lot of energy and emits a lot of CO₂,²⁸ and this is not something that can be avoided – we cannot make steel without burning coal and emitting CO₂, although we might be able to capture some of those emissions at high costs. The currently most widely used technology for solar cells is cadmium telluride photovoltaics. To produce solar cells that use this technology, large amounts of the very rare metalloid tellurium are needed. If we’d want to produce about 10% of current total world energy production (i.e., 10% of ca. 160,000 Twh/year) by means of such solar cells, we would need approximately 3000 times the current yearly tellurium production, and 8.5 times the estimated total winnable supply.²⁹ This is obviously impossible, but fortunately, new technologies are being developed constantly. Unfortunately, however, those tend to rely on similarly rare and expensive resources. Nuclear infrastructure faces other problems. It uses vast amounts of concrete, steel, and other materials that are extremely environmentally unfriendly to produce. More or less the same is true for hydropower (i.e., dams). It is important to realize that all of this means that these alternative energy sources are not carbon-neutral. Procuring and/or producing the materials required for building energy infrastructure (wind turbines, solar cells, nuclear plants, dams, and so forth) unavoidably emits significant amounts of CO₂.

A key resource needed for energy infrastructure that is often overlooked is space or location. Geothermal energy only really works in specific locations (and can even be disastrous elsewhere), and the same is true for hydropower. (There are few suitable locations for major dams left.) Wind and solar are much more efficient in some locations than in other, and both require a lot of space. Nuclear energy needs vast amounts of water nearby for cooling and is better avoided in seismically active areas to avoid nuclear disasters. Fossil fuels really face none of these problems – or to a far lesser extent, at least. Fossil fuel plants can be small and can be built almost anywhere. Furthermore, they can be easily transported and used to power moving objects such as cars, ships, and airplanes.

A fourth factor that needs to be taken into account has to do with operation and maintenance costs. Running and maintaining a nuclear power plant is extremely expensive due to extensive safety measures. Running solar cells or wind turbines, on the other hand, is free, but maintenance isn’t. Hydropower requires much more oversight than wind and solar, but is also cheap to run (and usually also to maintain). Running fossil fuel plants is (obviously) more expensive than wind or solar, but not nearly as expensive as nuclear.

Lastly, there are various risks and side effects that are sometimes overlooked or ignored, and sometimes exaggerated. The waste problem of nuclear power isn’t nearly as serious as it is often made to be. Nuclear waste is dangerous, of course, but not as dangerous as some people seem to believe it is, and it can be stored safely underground. The risk of major nuclear disaster is also quite small in normal circumstances. Modern nuclear reactors are built such that a meltdown would be contained in the reactor vat, at least, as long as it keeps being cooled. Safety does become a major concern, however, if long term maintenance and oversight cannot be guaranteed. As long as there are qualified people present to cool and maintain a reactor and to decommission it if needed, the risk of a serious accident is very small. But if due to war and/or natural disasters a nuclear reactor is left unattended for a very long time, … well, then bad things are likely to happen. This is a kind of risk that tends to be ignored, but what it implies is that if we build very many nuclear reactors, a collapse of civilization would lead to widespread nuclear disaster and the extinction of many species (including, possibly, ourselves). Nuclear power is safe only if long-term qualified oversight and maintenance (and ultimately, decommissioning) can be guaranteed. If there is a significant chance that due to (climate-change related) disaster or societal collapse this cannot be guaranteed in some area (or even globally!) then nuclear power would create an unacceptably high risk in that area. (The reason that this kind of risk tends to be ignored is that people in power do not want to consider the possibility of collapse, or even of significant change of the status quo.)

The assessment in the previous paragraph might change a bit if we change the scale. If we’d want to make nuclear energy our main source of energy, then we would need to build between 15 and 30 thousand new nuclear power plants (in addition to the approximately 400 that are running now). If we would want to switch from fossil fuels to nuclear power in 10 years, then we’d need to finish four new nuclear plants per day for the coming decade.³⁰ That’s obviously impossible, but let’s assume that we do something like that anyway and then reassess the issues mentioned above. Managing the nuclear waste of the small number of nuclear power plants we have right now has already proven to be difficult, even if it hasn’t been a serious problem and isn’t likely to become one. However, if we’d increase the number of nuclear power plants 50-fold or even more, we’d also have 50 times as much waste, and there is no way we can handle that. Furthermore, we can also expect a 50-fold increase in nuclear accidents. Until now, we had roughly one serious accident per decade (with Chernobyl, Three Mile Island, and Fukushima being the worst). With 50 times as many nuclear power plants, that would change into 5 serious accidents per year. They might not all be Chernobyl/Fukushima-level bad, but if the frequency of such major accidents doesn’t change, about half of them will be, so that means that we’ll add 2 or 3 uninhabitable regions every year, and then have to replace the nuclear power plants with new ones as well (in addition to decommissioning the old ones).

Negative side effects of other alternative sources of energy tend to be rather minor compared to those of nuclear power. Wind turbines kill a lot of birds, but not nearly as many as pollution and house cats, and moreover, it appears that birds avoid wind turbines if one of the blades is painted black. Hydropower has much more significant side effects: changing and destroying ecosystems in the area of the dam and downstream. Furthermore, large dams face a somewhat similar problem as nuclear power plants: if unmaintained, they will eventually fail. The effects of catastrophic dam failure are much more local than those of major nuclear accidents, however. They might wipe out a city, but not make a whole area uninhabitable for centuries or more. Drilling for geothermal power may disturb rock layers causing earthquakes, subsidence, or tectonic uplift, but can also release pollutants including greenhouse gases into the atmosphere.

In wrapping up this section, let’s briefly review the main alternatives for fossil fuels. Nuclear power has an EROI that is high enough, but is extremely expensive. Moreover, a significant expansion of nuclear power (that is, significant enough to produce a two-digit percentage of global energy demand) would create unacceptable risks and an unmanageable waste problem. The EROI of hydropower is very high, but there are almost no suitable locations for dams left, and because of that, hydropower can never produce more than a few percent of global energy demand. Wind and solar can both be significantly expanded. Both can probably produce a low two-digit percentage of global energy demand if there are sufficient resources available to produce the wind turbines and solar cells needed, if there are sufficient suitable locations for those, and if their EROIs can be improved. Those are all big “if”s, and moreover, even if those “if”s realize, they still only contribute low two-digit percentages at most. Other alternative sources of energy are negligible. Let’s be outrageously optimistic and say that we can increase nuclear power from the current 4% of global energy production to 10% without causing major problems or unacceptable risks, and that wind and solar can produce 15% each (rather than the 3% or so they now produce together). Add another 7% for hydropower and 1% for various other alternative sources of energy and we have a total of 10+15+15+7+1 = 48%, less than half of the amount of energy we are producing now, and energy demand is continuously rising further. Of course, a lot of the energy we produce is wasted, so efficiency gains might help a bit, but there is no way we can produce anywhere near sufficient energy without relying on fossil fuels. And in the near future, without the technological advances and investments necessary to make alternative sources of energy a bigger part of the mix, at least 80% of global energy demand will have to be met by burning fossil fuels. In the longer run, the only way to approach carbon-neutrality would be to cut energy demand in half at least and prevent it from growing.

4 — fossil fuels imply disaster

The claim that burning large amounts of fossil fuels – large enough to support the economic growth that capitalism depends on – implies disaster is a somewhat sloganesque summary of three more detailed sub-claims:

burning fossil fuels produces carbon emissions, except if carbon is captured (at the source) and stored;
carbon emissions increase atmospheric carbon, except if carbon is captured (directly from the atmosphere) and stored;
a significant increase in atmospheric carbon leads to catastrophic climate change.

None of these sub-claims is controversial. Of course, there are people who deny the third under the influence of fossil-fuel-industry-funded misinformation or other delusions, but virtually no one who is reasonably informed about climate science and related matters denies this. The uncertainty lies mainly in how much warming atmospheric carbon will produce and how catastrophic the effects thereof are, but the somewhat conservative “consensus” view produced by the IPCC suggests that 2°C will already be disastrous (albeit not yet apocalyptic), that it is virtually certain that we will reach this level of warming in the coming decades. 3°C is approaching apocalyptic levels, and 6°C will probably make Earth uninhabitable for humans.

As far as I know, no one denies the first two sub-claims, so these are even less controversial than the third. Consequently, the only thing that needs to be established to support the claim that burning fossil fuels implies disaster is that the two exception clauses do not work, or are insufficient to prevent catastrophe, at least.

It should be noticed that the two exceptions refer to different approaches or processes. The first aims to avoid that CO₂ and/or other greenhouse gasses are released into the atmosphere at the point where they are produced. Instead, the CO₂ is captured and stored in some form. So, for example, rather than releasing CO₂ into the atmosphere, a coal power plant filters CO₂ out of its emissions and stores it. This is called carbon capture and storage (CCS). While CCS prevents carbon from getting into the atmosphere, the second exception refers to processes that remove CO₂ and/or other greenhouse gases from the atmosphere. This is (usually) called carbon dioxide removal (CDR).

CCS is technically possible, but very expensive, and quite leaky – that is, it doesn’t filter out all CO₂. Furthermore, storing carbon comes with further complications and expenses. At present, research efforts are focuses on the “capture” aspect, and mostly with the aim of converting the captured CO₂ into fuel that can be burned elsewhere. This doesn’t help, of course, because then the captured carbon ends up in the atmosphere anyway, unless it is captured again. However, this appears to be the only way to make carbon capture economically feasible. Capture is difficult and exceedingly expensive, so that expense must be covered somehow. Perhaps, a massive government subsidy program could do that, but lacking this, selling the carbon as fuel is the only option. Further increasing the expenses by storing the carbon (under ground or in some other form) is a financial impossibility, but even if it weren’t, there are too many carbon-emitting processes for which carbon capture is not a realistic option. In other words, for technical and financial reasons, CCS will never reduce carbon emissions to zero – most likely, CCS will not even be able to halve emissions.³¹

This leaves the second exception: CDR. There are several more or less “natural” methods to remove carbon from the atmosphere, such as reforestation, enhanced weathering, and ocean fertilization. However, none of these can be anywhere near sufficient, and they all have side effects that may be problematic. Reforestation is a good idea, for example, but we cannot significantly reduce farmland if we want to feed the global population. Hence, for CDR to have any kind of significant effect on atmospheric carbon levels, we need some technological means: direct air carbon capture and storage (DACCS, or just DAC for short).

Like CCS, DAC is technologically possible, and like CCS, it is expensive and inefficient. Furthermore, DAC cannot play a significant role without breaking the laws of thermodynamics. The reason for that is that the amount of energy needed to remove a certain amount of CO₂ from the atmosphere is necessarily larger than the amount of energy produced in the process that released that amount of CO₂ in the first place.³² As an example, let’s assume that you have a small diesel power generator to provide electricity for your house. You also have a miniature carbon capture machine that captures an amount of CO₂ from the atmosphere equal to what your diesel generator produces. And you have solar cells on your roof to provide the electricity for that carbon capture machine. Now, because of the laws of thermodynamics, the amount of electricity produced by those solar cells on your roof (to run the carbon capture machine) is larger than the amount of electricity produced by the diesel generator (to provide electricity in your house). Then, why did you even need that diesel generator in the first place?

This is exactly the problem with DAC. Let’s imagine that we have 100 million working carbon capture machines in a few decades from now. Where is the energy to run those machines coming from? The total amount of energy those 100 million machines need to run is larger than the total amount of energy produced in the processes that lead to those CO₂ emissions. Obviously, we cannot just build more coal plants to run our carbon capture machines, because then we would need even more carbon capture machines to capture the CO₂ emitted by those extra coal plants. And so forth. But if we run our carbon capture machines on alternative energy sources such as solar and nuclear power, then our total alternative energy production would have to be larger than the total energy production by means of fossil fuels. Since we cannot even produce the same amount of energy that we are producing by means of fossil fuels by alternative means (see previous section), more is certainly out of the question.

At best, CCS and DAC can counteract some residual emissions – that is, carbon emissions that are more or less unavoidable at the current state of technology – but they cannot possibly avoid or negate the carbon emissions required by capitalism. Recall that we can at most satisfy about half the current global energy demand with more or less carbon-neutral means (see previous section). To offset the the carbon emissions of the other half, we’d need more than twice as much carbon-neutral energy production capacity than what is (optimistically!) possible. Provided that the costs could be significantly reduced, CSS and DAC would be extremely helpful in a situation of abundant alternative energy, but such a situation will not be, and cannot be reached. In circumstances of alternative-energy scarcity, on the other hand, when there isn’t even enough carbon-neutral energy available to meet other demand, there just won’t be any alternative energy available for carbon capture. Hence, carbon capture and storage is a pipe dream built on an implicit assumption of infinite carbon-neutral energy. The only way to avoid carbon-emission-driven climate disaster is to very significantly (and very quickly) reduce carbon emissions, but that is something a capitalist world cannot do.

conclusion

Capitalism is a death cult.³³ Catastrophic climate collapse cannot be avoided under capitalism because capitalism requires economic growth, economic growth requires energy growth, energy growth requires extensive burning of fossil fuels, and extensive burning of fossil fuels causes catastrophic climate collapse.

So, then what?

Socialism is not an alternative, as socialism is typically as promethean as capitalism – that is, most forms of socialism assume or demand continuous economic growth as well. Since (the requirement of) economic growth is the problem, any political ideology or system that depends on, or demands economic growth will lead to the same end result: climate apocalypse. Saitō Kōhei has suggested “degrowth communism”, which might work if it would be sufficiently clear what exactly that entails and how it could be established.³⁴ It is especially the latter that is a problem – we can all dream of more or less utopian alternatives for capitalism that solve or avoid climate collapse,³⁵ but if there is no feasible path to establish such an alternative it is nothing but an utopian dream.

So, then what?

I don’t know. I don’t believe that capitalism will be terminated voluntarily and peacefully, and I don’t believe that it will terminated in a successful revolution of some kind either. More likely it will slowly develop into some kind of neo-fascism, a development that is already underway. But because neo-fascism is essentially a mixture of neo-liberal capitalism and fascism, while that would change some things, it wouldn’t significantly affect the dependency on economic growth. (Unless the global elite in a neo-fascist world somehow manage to monopolize green energy for their own use and to deny any significant kind of energy use by the masses. Or in other words, techno-utopia for the elite and back to the Middle Ages (or the Stone Age?) for the rest of us.) The most likely scenario is – unfortunately – that capitalism and/or its neo-fascist descendants (or variants) are eventually destroyed by their own lust for infinite energy. What will end capitalism (and/or neo-fascism) is climate-collapse-driven societal collapse. “It is easier to imagine the end of the world than to imagine the end of capitalism”, wrote Fredric Jameson famously.³⁶ Indeed, but the reason for this is that the end of the world – of this world, at least – appears to be the only thing that can bring about the end of capitalism (but also because the end of this world will bring about the end of capitalism).

Capitalism will go down. The question is whether it is (still) possible to prevent it from taking human civilization (or even humanity itself) with it.

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Notes

Geoffrey Hodgson (2015). Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press), p. 259.
Part of this paragraph as well as a few other paragraphs sprinkled throughout this article have been copied (and lightly edited) from my A Buddha Land in This World: Philosophy, Utopia, and Radical Buddhism (Punctum, 2022), chapter 15.
It might not be full-fledged socialism either, as that might require more than just the nationalization/socialization of the financial industry, although definitions of “socialism” differ. Hodgson himself favors a definition that would require virtually the whole economy to be state-owned and/or -controlled and argues against the feasibility of a system that is simultaneously democratic, benign, and “socialist” in this sense. See: Geoffrey Hodgson (2019), Is Socialism Feasible? Towards an Alternative Future (Cheltenham: Edward Elgar).
Dort bildet die Ware, hier das Geld den Ausgangspunkt und Schlußpunkt der Bewegung. — MEW23: 163.
Der Kreislauf W−G−W is vollständig zurückgelegt, sobald der Verkauf einer Ware Geld bringt, welches der Kauf andrer Ware wieder entzieht. — MEW23: 164.
Sein treibendes Motiv und bestimmender Zweck ist daher der Tauschwert selbst. — Ibid.
Eine Geldsumme kann sich von der andren Geldsumme überhaupt nur durch ihre Größe unterscheiden. — MEW23: 165.
Die vollständige Form dieses Prozesses ist daher G−W−G′, who G′=G+ΔG, d.h. gleich der ursprünglich vorgeschossenen Geldsumme plus einem Inkrement. — Ibid.
This is not exactly correct as economic growth is not so much an increase of the amount of money ΔΣM, but is measured as an increase in the monetary value of production and consumption. More about this in the next section.
Edward Abbey (1975), The Monkey Wrench Gang (Philadelphia: Lippincott Williams & Wilkins).
Also, it is rather doubtful whether it even makes sense to say that a cancer cell can have an ideology.
This is not a slur and this doesn’t mean that these are necessarily like cancer in a healthy economy either. They are merely analogous to cancer cells in this analogy of a situation without a growing economy.
Giorgos Kallis, Vasilis Kostakis, Steffen Lange, Barbara Muraca, Susan Paulson, & Matthias Schmelzer (2018). “Research on Degrowth”, Annual Review of Environment and Resources 43: 291–316, p. 300.
As far as I know, Marx never suggested anything like this either. I merely appended it to Marx’s important insight that the M−C−Mʹ cycle is a defining feature of a capitalist economy.
This is a bit off topic, but inflation isn’t nearly as bad as it is often held to be. As long as it’s not hyperinflation and real wages don’t fall behind, inflation isn’t a problem for most of the economy. Inflation is bad for the financial industry, however, because when prices rise, old loans (at old prices levels) become worth less. Lending money – which is one of the main sources of income for the financial industry – becomes more risky and less profitable at higher levels of inflation. It is for this reason that the financial industry claims that inflation is bad for the economy (while it is really just bad for them), and since most economic experts consulted by the mass media and governments are (or sometimes were) on the payroll of the financial industry, that industry is very efficient in making everyone believe its propaganda.
Ha-Joon Chang (2010), 23 Things They Don’t Tell You About Capitalism (London: Penguin).
Not in the least because there aren’t many options left to force more people into the labor force, aside from child labor and/or abolishing pensions, which might be unpopular policies in some countries, while they are already common practice in others.
In 78% of countries, the tertiary/services sector produces more than half of GDP.
See Rent, Debt, and Power, or chapter 15 of my A Buddha Land in This World.
However, because rent extraction by the financial industry tends to grow exponentially, sooner or later the rest of the economy cannot keep anymore and some kind of crisis follows. — See references in previous note as well as: Michael Hudson (2015), Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (Petrolia: Counterpunch Books). Steve Keen (2017), Can We Avoid Another Financial Crisis? (Cambridge: Polity). Richard Vague (2019), A Brief History of Doom: Two Hundred Years of Financial Crises (Philadelphia: University of Pennsylvania Press).
Or cheaper than labor, at least.
Ian Parry, Simon Black, & Nate Vernon (2021), Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies, IMF Working Paper WP/21/236 (International Monetary Fund).
On EROI and its economic significance, see: Charles Hall & Kent Klitgaard (2018), Energy and the Wealth of Nations: An Introduction to Biophysical Economics, Second Edition (Berlin: Springer).
Well, technically the sun always shines, of course, but the sunlight doesn’t always reach the solar cells, either because it is night, or because of clouds.
For an overview of the EROIs of different energy sources, see: Charles Hall, Jessica Lambert, & Stephen Balogh (2014), “EROI of Different Fuels and the Implications for Society”, Energy Policy 64: 141–152.
Achieved by the National Ignition Facility reactor in the US in December 2022.
And if there are no fundamental obstacles that we do not know about yet.
Currently iron and steel production contributes about 7% to global CO₂ emissions.
See: this source
Requiring lots of concrete leading to quite significant CO₂ emissions.
Actually, half already seems outrageously optimistic.
Technically this isn’t entirely correct as the amount of energy remains constant from a physical point of view, it is correct if we’re talking about the kinds of usable energy that we ordinarily refer to with the word “energy” (i.e., when we are not (pretending to be) physicists).
A “death cult” or “destructive cult” is a religious group that causes (or is liable to cause) death and/or injury among its members or the general public. The cult-like character of capitalism is (or should be) obvious to any rational observer.
Saito Kohei (2023), Marx in the Anthropocene: Towards the Idea of Degrowth Communism (Cambridge: Cambridge University Press).
As I did in The Lesser Dystopia, for example, although that article is concerned with mitigation more than avoidance, as it is too late for avoidance.
Fredric Jameson (2003). “Future City,” New Left Review 21: 65–79.