Just a few weeks ago, the idea that governments around the world would voluntarily implement measures that were almost guaranteed to bring about a recession would have seemed preposterous.
Nonetheless, that is what happened when dozens of governments imposed nationwide lockdown. Across the globe, countries’ GDP is collapsing because of active choices their governments made. These unique circumstances have allowed for radical economic ideas to be put to the test in the real world in ways that would normally be impossible.
Extinction Rebellion, for instance, repeatedly attacks our “consumer-focused lifestyle” and has called for a considerable reduction in consumption for the sake of the environment. Now, we can see what happens when their demands are realised.
The results are not especially positive, to say the least. For the target of net-zero carbon emissions to be reached by 2050, we would need a 5 per cent drop in emissions per year. Forecasts predict that that will happen this year, thanks to lockdown. But that’s not enough.
For the target to be reached, that 5 per cent drop would have to be compounded year on year. We would have to see a further 5 per cent drop next year, and so on. In other words, the only way to stand a chance of achieving the target would be to remain in lockdown indefinitely and even then, it seems unattainable.
Even putting aside the detrimental effect of a lack of innovation and entrepreneurship opportunities on environmental progress, lockdowns are incredibly harmful. The World Bank estimates that 40-60 million people will slip into extreme poverty as a result of this pandemic. Clearly, these levels of reductions in emissions are unsustainable.
For better or worse, advocates of anti-growth environmental economics have seen their demands made real. It is nothing less than disastrous. We have made negligible progress towards achieving their goals, at the staggering cost of leaving the lives of tens of millions in ruin. The argument that bringing capitalism to a grinding halt would save the environment is dead.
Ever since Margaret Thatcher became the first world leader to speak out on climate change, protecting the environment has been capitalism’s last true challenge. The eradication of poverty seems an inevitability when 128,000 people escaped extreme poverty each day between 1990 and 2015.
Post-war capitalism has led to the greatest victories against poverty in mankind’s history, a trend that was subsequently replicated when communism faded away after the cold war. The concept of welfare? Capitalism absorbed that with ease. It seems that if we can tackle environmental issues, on top of all that, this humble economic system might just have solved all the world’s problems.
It is therefore crucial that we take advantage of all the greatest strengths of capitalism in order to achieve this goal. In particular, we must emphasise the pivotal roles of individuals and profit-making companies in saving the environment. Few things demonstrate that point better than Heathrow Airport.
The expansion of Heathrow has been delayed yet again, thanks in large part to the work of two groups: individuals who live nearby and environmental campaign organisations. Together, they successfully argued that the government could not expand Heathrow without harming the environment on a local and national level.
This is both true and false. The government’s proposals might well fail to protect the environment. In fact, the courts found that to be the case. Expansion, on the other hand, might not.
Technological progress suggests that hydrogen-powered planes might soon revolutionise the aviation industry. Meanwhile, Solar Impulse 2 has already completed an around-the-world flight powered entirely by solar energy. The air travel industry, despite its reputation, might be on the cusp of an internal environmentally-friendly revolution.
This progress should be put to good use when it comes to changes that may have negative environmental side-effects, such as the Heathrow expansion. Why not offer discounted rates, superior rights or even exclusive access to the new terminal to air travel companies which specialise in green technology?
This would not hurt pre-existing companies operating within other terminals but would allow a competitive advantage to those who rushed to take advantage of the offer by cleaning up their environmental act.
The key point here is that technological advancements are achieved only by embracing capitalism through free and fair markets, not opposing growth. Business is a global concept and climate change is a global problem. The former is the solution to the latter.