Natural capital: the strained relationship between capitalism and the environment

Capitalism has been the driving force of our society for over 200 years. It’s the system which has presided over innovation and progress, and looks set to do so for the foreseeable future. But capitalism has also driven a century of environmental destruction on a scale unimaginable to our ancestors.

Huge swathes of ancient forest cleared for cattle, plantations and roads. Industrial scale pollution pumped into the ocean and the air. Untold species of animal and plant hunted or driven to the brink of extinction, and often lost forever. And why? It’s simple: growth.

The march of progress

Don’t get it twisted – growth isn’t a dirty word. It’s how we continue to see new technological innovations and higher living standards year after year. Simple maths means that some level of growth is needed to cater for a rising population.

Growth is the reason that new jobs are created. It’s the reason people from diverse backgrounds globally live easier lives than many of their ancestors did. It seems critical to our continued wellbeing.

You could be forgiven for thinking that growth is the most important mechanism pushing progress forward. However, within capitalism, growth is welded to an altogether more sinister motivation. Within capitalism, profit is king.

Why do ranchers and farmers slash and burn the Amazon? Why do poachers hound rhinos and elephants? Why do mining companies raze large tracts of land for coal?

It’s not about good or evil. It’s a natural outcome of making profit the primary motivator of economic activity. Money makes the world go round – but it’s also helping to destroy it.

Capitalism commoditises the precious ecosystems which make our existence possible and underpin our civilisation – the value of nature is determined by how we (humans) can use it.

And companies, and the individuals which comprise them, have no choice. In a free market, any business which gains a competitive advantage by shirking its environmental responsibilities will survive. A poacher sees an endangered rhino as a vital source of income. Morals become a liability; companies adding overheads by treating their employees and the environment with respect will be less profitable.

Can capitalism save the world?

On the face of it, no. But it’s never that simple. How else could you explain the drive to net zero, the turn away from fossil fuels, the regulations from governments globally?

The iron laws of supply and demand are subject to altogether less rigorous forces, which most people intuitively understand – our thoughts, feelings and beliefs matter. The oil majors are backing renewables because demand for oil is set to drop. Essentially, the governments under pressure to ban new petrol cars, to put new legislation in place mandating net zero by 2050, are creating a world where nobody needs as much oil. And so, oil becomes less profitable. Emissions become a direct cost.

There’s still much uncertainty on how far governments will push for the new net zero goals.

But one thing is for sure: the route to a low carbon future relies on governments weighting the dice. Through tax breaks and subsidies, through funding innovation, the world must make environmentally sound actions the only sensible course of action for a moneymaking business.

The boards of the oil majors are not daisy-chain-wearing hippies. Nor are the titans of industry, in chemicals, automotive, aviation and more. They do believe in money, however.

Pressure from consumers will go a long way in alleviating a climate disaster at the end of the century. So too, will government regulation. In the long term, though, we’ll have to chart a different, more sustainable course of action. Our resources are finite, yet capitalist profits must always increase. When our resources start to run thin, markets will collapse.

Equilibrium: finding a balance

Can you imagine what the world will be like in 2100? What do you see? Glittering towers looming over silently gliding electric cars? Flocks of birds lazily cruising over hydroponic, solar-powered farms? A world where technology has completed our mastery over the planet and provided happiness and stability for all?

It’s cute. And we can dream. But blind optimism is not what we need right now. Technological progress will doubtless solve many of our pressing problems, from clean energy to hunger.

But what about the problems which are built into our society? Inequality. The growing power of multinational corporations. A disregard for the diversity of nature.

The world in 2100, unless we are careful, could be a world of extremes. Millions of climate refugees flee the dust-bowls of India and the Middle East, rendered uninhabitable by heat and droughts. Huge storms batter the overcrowded US East Coast, as rising sea levels swamp crumbling flood defences. Already, the biomass of livestock outweighs natural fauna. We could be looking at a future where the only species that survive are the ones that are useful to us – or the ones which learn to live alongside us.

Key to a sustainable future will be learning to live at a slower pace. The populations of countries like Japan will drop through demographic pressures alone. As countries such as India and China see similar changes in the coming century, it will undoubtedly impact growth – and profit. It also offers a golden opportunity to establish a sustainable rhythm for the centuries ahead.

With advances in AI, managing large scale economies will become possible. Without the blind chaos of capitalism, humanity can work towards a common goal of equilibrium, where the global population remains broadly stable and humans are freed from menial work. Growth could be slowed, and nature regenerated.

Without the pressures of consumerism, and with a guarantee that basic needs will be satisfied, it becomes easier for people to focus on what’s really important to them – family, nature, creativity.

There may be teething problems. It may be hard. But compared to the continued ravages of centuries-long insatiable profit, we don’t have a choice.

*Luke gave EarthRights written permission to feature his photograph of Toronto Skyline (at the top).