ISBN 978-0-8090-3469-7. “The Way Out – Kick-starting Capitalism to Save our Economic Ass” by L. Hunter Lovins and Boyd Cohen was published by Hill & Wang in 2012 (from the original published as “Climate Capitalism: Capitalism in the Age of Climate Change” 2011). Of course we are familiar with the name ‘Lovins’ from the Rocky Mountain Institute’s Amory B. Lovins. These former partners (they divorced in 1999) have written seven books together and although this doesn’t feature Amory as co-author, it could well have been written by him based upon its style and content. Boyd is a new name – he is a “former professor of sustainable entrepreneurship”. What we have here is a near breathless intro the something the authors dub “Climate Capitalism”.
This is essentially a follow up to “Natural Capitalism: The Next Industrial Revolution” and is in a similar vain to Jeremy Rifkin’s “The Third Industrial Revolution” and Amory Lovins “The Oil Endgame“. In “Climate Capitalism” we get a full-on set of market-led initiatives that supply a holistic set of solutions to multiple problems. If we can cut our dependency of carbon as an energy source then we can solve climate change, peak oil, our economic ills and energy security in one fell swoop. This is not a book that minces it words and it comes out with all fists flying:
“It is time for capitalists to reread “The Wealth of Nations” and to free our energy markets from corporate socialism such as perverse subsidies that makes energy look cheaper than it really is to us…”
Oh yes, we love this sort of talk. This is a book that talks to us. It is, however a book that rather shouts at us from the other-side of the Atlantic. It is written for a North American audience so the rhetoric does wave the flag for the American way of life – but that is not a bad thing in itself. After all it is the USA that has traditionally dragged its feet on climate action. It is the hardcore seat of global climate change denial. So they do need these sort of books written for them in language they will understand – and that language is ‘money’, their God the market:
“Markets make very good servants, but they’re not good masters, and they’re a lousy religion. There’s also an important role for communities of faith in reminding us that markets aren’t God, and that there are important questions to answer about what it means to be human, and why we are on this planet. The goal isn’t “He who dies with the most toys wins.” “
Hear, hear to that. Cohen & Lovins go onto describe the “myriad of barriers that keep markets from functioning as they should“. Readers of the works of Ha-Joon Chang or Joseph Stiglitz will be in familiar territory here. And like Chomsky they make the re-study of what Adam Smith really thought a corner piece of their case:
“…academics who have revisited Adam Smith’s work have found that judging him from what he was writing shortly before he died, Smith may have been the father of not just markets but of sustainability.”
The Adam Smith Institute would turn purple at the very suggestion no doubt. The authors argue that we are in an era of “cheater capitalism” where we no longer see the true cost of fossil fuels:
“Such transparency, such truth in pricing, is an inherent requirement of a truly free market, and is wholly absent now.”
But there is hope argue the authors. That hope is the business community who must overcome “the efforts by the incumbent industries to remain dependent on the technologies of the last century..” Such music to our ears. But it isn’t all greed-is-good macho posturing – there is a serious point: we must do the right thing or die trying. We read here President Nasheed of the Maldives quoted as saying
“We know that the Maldives becoming carbon neutral is not going to de-carbonize the world and stop us from annihilation. We know that. But at least we could die knowing we’ve done the right thing.”
I think I will have that on my tombstone. The point is that “doing the right thing” is the “right thing” in so many ways. Climate Capitalism isn’t charity – it is simple common-sense, it is good business
“Capitalism, business and indeed naked greed are some of the most powerful motivations for solving the problem of climate change – so let’s unleash them through Climate Capitalism and visionary business models.”
So, who has that vision? This book is jam-packed with examples from beginning to end. Even the Transition Towns movement gets an honorary look-in here and there proving that there is certainly room in the Climate Capitalism model for small scale grass roots initiatives too. The more the merrier.
As mentioned, this is not a book to mince its words. Some of the strongest criticisms comes when describing the use of Nuclear Power as a cure-all and the failure of politics at climate talks:
“…the fallout from the failure in Copenhagen and the cowardice by Democrats in the U.S. Senate and by the Obama administration on climate change.. [led to a US carbon exchange being forced] to lay off half it staff. [It subsequently closed.] The institution that had proven that carbon markets work was destroyed by political incompetence and self-interest. Pathetic.”
Pathetic indeed. And this on Nuclear power:
“Perhaps most disturbing is that nuclear power, because it is so dangerous, requires a technologicial priesthood to keep it running safely. This threatens basic democratic principles.”
I can’t say I would go THAT far. If you start talking in theological terms then you stray close to the anti-science crowd and their denialism. There are problems here. Nuclear is perpetuated by state-capitalist socialism – something the authors quickly address:
“This is not Climate Capitalism; it is socialism for some very wealthy companies who won’t put their own money where their fast talk is, so they want yours.”
Nuclear is low-carbon BUT it represents an outdated fascination with BIG centralised solutions, operated by real men, doing awesome-cool ‘stuff’ with dangerous machines. But we get the point about “socialism” rammed home again and again:
“If that money had been spent on improving and creating public transit infrastructure, more than twice as many jobs would have been created than by putting money into fuel for cars. This is no Climate Capitalism, it is socialism for drivers, oil companies and fossil shareholders.”
OK, we get the picture… This book is certainly NOT beyond criticism. It certainly walks the talk but when I described it earlier as “breathless” I meant it. The authors are very, very excited about the prospects of Climate capitalism – so much so that they talk-up even the smallest victory like these are enormous landmarks. Some examples are clearly exaggerated and some require a critical eye. It certainly is worth counter-balancing some of this excessive enthusiasm with some of the talking points from “The Burning Question” by Mike Berners-Lee and Duncan Clark. Although we criticised “The Burning Question” for being too pessimistic it remains a powerful antidote to anyone who thinks solving climate change in an infinitely expanding economy is going to be simple. Berners-Lee and Clark made the point that there has to be an over-riding carbon cap upon emissions to give an indicator to the market. Essentially carbon must have a price and in this point they are in agreement with Cohen and Lovins (nothing controversial about that). However Cohen and Lovins strain credibility when they take small isolated examples and extrapolate these out as if they are significant globally. Indeed it is a Global perspective that seems lacking. It is all a little parochial.
The most parochial aspect is how they demonstrate how cheap it is for Americans to save money by saving energy. However, the USA is one of the most wasteful nations on Earth. They have an awful lot of low-hanging fruit in their economy where as the Europeans and South-East Asian now have less opportunity. They are starting from different places. America can make massive strides simply by catching up with the rest of the developed world.
“Even the lowest ROI energy efficiency investments, such as increasing wall or attic insulation, bring twice the return as that on a thirty-year bond.”
But that won’t be enough. If every developing nation caught up with the living standards of the average European then we still would not have enough resources to go around in a sustainable fashion. For example the authors quote the sale of used Laptop computers on eBay as saving 69,000 tons of greenhouse gasses in 2007. Unfortunately the Jevons paradox bites back. People saving money off laptops will simply take their spare cash and go out and buy an SUV. To be fair the authors do recognise the concept of “leakage” later in the book when describing carbon markets and offsets. It just proves that arguments about carbon savings can be complicated and lead to simplistic analysis and inappropriate guidance on policy.
[If I have one more teeny-tiny criticism it may be that I don’t think these authors truly understand the technology. They don’t really need to but I would prefer it if they did not mislead the public into believing that it is the “heat energy of the sun” that drives photovoltaics. It’s a bit like saying that it is the smell of the breeze that powers a wind turbine. Seriously – it makes you wonder what other short-cuts they may have taken in supplying basic facts.]
This aside this book is two loaded barrels into the face of the lazy incumbent capitalists who seek nothing but rents on a dying fossil fuel hegemony.
“In his introduction to the film “An Inconvenient Truth“, Al Gore called climate change “a moral issue”. But at heart it is neither a moral nor an environmental issue. It is a crisis of capitalism.”
…and isn’t that the rub? It has been my argument for over eight years now: climate change is NOT an environmental issue and it won’t be solved by environmentalists. The upcoming post-carbon economy is not some life-style choice for the greens. It is enivitable for all of us and we shall lead, follow, or get out of the way. Which path shall Capitalism choose? Modern “State-Capitalism” is an utter failure. What we need are free markets powered by true-costs. We are done with this socialism-for-the-rich through Government ordained rent-seeking. Solving climate change is the way out of our economic crisis.
Take a company like DuPont who by 2007 were saving the company $2.2billion a year. That was at a time when the company’s profits were exactly $2.2billion a year. Why does building shareholder value require the asset stripping of our grandchildren’s resources? What’s the point of following an unsustainable model when a sustainable one is even more profitable? Well we have to hand it to George Monbiot for nailing this one: burning carbon is macho-economics. These authors agree writing
“…in practice, utilities still very much want to build more power plants. There is something less “manly” about efficiency that some utility executives find distasteful.”
People in power like macho economics so they slash and burn. That was how their ancestors got rich. What needs to change? People just need to change their minds – and this book gives them the ammunition.
“A 2003 study of the impact of energy efficiency and renewables in Oregon found that conserving 1 megawatt of energy has the following impacts upon the state’s economy:
- An increase of $2,230,572 in annual income
- An increase of $684,536 in wage income
- An increase of $125,882 in business income
- Creation of twenty-two new jobs in Oregon”
Compare those numbers to the excess costs of fracking. The need for energy efficiency and renewables seem to be an utter no-brainer. When Governor Crist wanted to know how much it would cost to implement aggressive measures to reduce Florida’s carbon footprint he found that it would add $28billion to his local economy between now and 2025. So why do we think otherwise and especially so in the USA? The authors quote Thomas Friedman:
“It is like Sputnik went up and we think it is a shooting star. Instead of a strategic response, too many of our politicians are still trapped in their own dumb-as-we-wanna-be bubble, where we are always No. 1, and where the U.S. Chamber of Commerce, having sold its soul to the old coal and oil industries uses it influence to prevent Congress from passing legislation to really spur renewables.”
Yeah! The dumb-as-they-wanna-be crowd has reached Britain in the arguments around fracking. The £-signs are in the eyes of the politicians as the only way to get rich quick without really trying. Then there are the Corporations why lobby Government to stop meaningful change:
“The time has come for U.S. carmakers to spend more money on innovation and less on litigation.”
Zing! This book is a damning indictment of US Government policy and, by extension, all those white English speaking Governments attempting to be more right-wing and neo-liberal than America. This book really has it all and I could go on and on singing its praises.
As you can tell we recommend this and its ilk for the message they send straight into the heart of the fossil fuel incumbency. Low carbon is not a lifestyle choice. Post-carbon is a business opportunity and the early adopters will be well rewarded. The true post-carbon entrepreneurs will reap the profits and lead the world. The risk for the USA is that this might not mean them. At this rate it is very likely to be China and Europe.
This is a work from a peculiarly North American perspective but this is not always a bad thing. Whereas they have the sort of opportunities that we no longer have it is important that we all realise that this is an opportunity for everyone to get ahead and solve our economic problems. The problem has been that our western economies have become burdened with risk and over-financialisation. We now only know how to make money through rent-seeking. We either slash and burn or we print money.
There is a better way. We can build an economy that is based on solar energy. This is an economy unlike today. It will be far more democratic, far more distributed, the means of production will be owned by the communities that consume the fruit of their labours. Yet it doesn’t require any allegiance to some dead philosophy that pitches capitalism versus some alternative. Capitalism can solve the problems we face. But it won’t be the capitalism we have today. It will be a reinvention of what we have. Something less corrupted by the state. A return to a true free market – one that recognises that the market is a tool moderated by elected Government officials for the public good. It is not a private boys club devoted to the enrichment of an elite at the expense of everyone else living and yet-to-be born. What we need is the language to explain that it is not in the interest of the fossil fuel incumbency to retain these powers. All we lack is a roadmap… But this book gives us the vision. It really is all HERE. Bring it on.