Next Story

Profit over planet: capitalism's impact on climate crisis

Valuing profit and growth above all else, its effects on environment, needless to say, are disastrous.

By Abdul Rehman Nawaz/ALI ASAD SABIR |
Design by : Ibrahim Yahya
facebook whatsup linkded
PUBLISHED May 28, 2023

Climate change is a hot-button topic that affects everyone on the planet. From rising temperatures to extreme weather patterns, deforestation to floods, something needs to be done to prevent further destruction to our planet. But whom to blame? Can we blame Capitalism?

A World Bank study shows that climate change is already costing developing countries billions of dollars each year. The cost of climate change is expected to rise to $210 billion per year by 2050. Similarly, a report by Intergovernmental Panel on Climate Change shows that the industrial sector is responsible for 37% of global greenhouse gas emissions. This sector includes manufacturing, construction, and energy production. Multinational firms are the biggest emitters of greenhouse gases.

The economic system values that profit and growth above everything else, leading to constant consumption, production, and resource extraction. The effects are disastrous, with natural habitats being destroyed, resources depleted, and greenhouse gas emissions skyrocketing.

Multinational corporations are some of the biggest culprits when it comes to capitalism's impact on climate change. These companies prioritise profit over environmental sustainability, and their actions reflect this priority. For instance, oil and gas companies have been known to engage in practices such as fracking and offshore drilling, which release substantial amounts of methane and carbon dioxide into the atmosphere.

Design: Ibrahim Yahya

The impact of climate change caused by capitalism is not limited to the environment. It also has a significant impact on communities around the world, particularly those in developing countries. Climate change has led to food and water scarcity, increased poverty, and more frequent natural disasters. These impacts disproportionately affect marginalized communities who have little access to resources and lack the means to adapt to a changing climate.

Developing world bears the brunt

Despite the overwhelming evidence of capitalism's impact on climate change, many governments and corporations continue to prioritise profit over the environment. The Paris Agreement, which was signed by 196 countries in 2015, aims to limit global warming to well below 2 degrees Celsius. However, many of the world's largest emitters, including the United States and China, have failed to meet their commitments under the agreement.

The devastating impact of industrialisation and capitalism on the environment and society, especially in developing countries, cannot be ignored. Developed nations have been exploiting the cheap labor and lax environmental regulations of these countries, using them as dumping sites for their hazardous waste and electronic garbage. While they have benefited from increased profit margins, developing countries are left to grapple with the environmental and health hazards caused by this unethical practice.Developed countries and multinational corporations have a dirty secret: they dump their waste and pollutants on developing countries. Electronic waste or e-waste is often shipped to these countries, and can contain toxic materials like lead, mercury, and cadmium. The impact of this waste on the soil, water, and air can be devastating. Unfortunately, countries like Ghana, Nigeria, and India have become dumping grounds for this waste, and workers there are forced to dismantle the electronics without proper protection from these harmful materials.

The issue of e-waste

Multinational corporations such as Apple, Samsung, and Microsoft have been accused of contributing to this problem by failing to properly dispose of their e-waste. In 2018, a study by the Basel Action Network found that electronic waste from these companies was being illegally exported to developing countries, where it was often dumped in landfills or burned, releasing toxic fumes into the air.

Similarly, textile factories in developing countries such as Bangladesh, India, Pakistan, and Cambodia are contracted by multinational brands to produce clothing for the global market. However, these factories often release untreated wastewater into rivers and other bodies of water, contaminating the water supply and harming the health of local communities.

In 2013, the Rana Plaza factory collapse in Bangladesh killed over 1,100 people, mostly garment workers who were producing clothing for multinational corporations such as Walmart and Benetton. The building's collapse was caused by poor safety standards and overcrowding, which were driven by the demand for cheap clothing produced in developing countries.

The oil and gas industry could be another example, which often operates in developing countries with lax environmental regulations. Companies such as Chevron, ExxonMobil, and Shell have been accused of polluting water sources, releasing toxic fumes into the air, and causing soil contamination in countries such as Nigeria and Ecuador. In Nigeria, for example, oil spills have contaminated water sources and destroyed fishing communities, leading to food insecurity and health problems. In Ecuador, Chevron was found liable for causing widespread pollution in the Amazon rainforest, which has had devastating consequences for the health and livelihoods of Indigenous communities.

Design by : Ibrahim YahyaDesign by : Ibrahim Yahya

The case of Pakistan

According to the Pakistan Environmental Protection Agency (EPA), over 70,000 used vehicles were imported into Pakistan in 2017, from Japan and South Korea. These vehicles often do not meet the emission standards set by the Pakistani government, leading to increased air pollution and negative health impacts for the population. The EPA report also highlights that most of these vehicles are not properly maintained, leading to increased emissions and further environmental degradation. Similarly, international fashion brands such as Nike, Adidas, and H&M have also been accused of using suppliers in Pakistan that engage in forced and child labor.

Furthermore, Pakistan has become a dumping ground for electronic waste, with over 100,000 tons of e-waste imported into the country each year. This e-waste often contains hazardous materials such as lead, mercury, and cadmium, which can contaminate soil, water, and air.

People feel the impacts of climate change all over the world, but the most vulnerable populations tend to be those living in developing countries. These populations often have less access to resources and infrastructure to adapt to the changing climate and are more likely to suffer from the negative effects of extreme weather events, such as droughts, floods, and storms. Furthermore, these vulnerable populations are often not responsible for most of the greenhouse gas emissions that cause climate change. Developed countries, which have historically been responsible for most emissions, bear a significant responsibility for addressing the impacts of climate change.

Design by : Ibrahim YahyaDesign by : Ibrahim Yahya

Who should pay for climate change?

Deciding who should shoulder the costs of climate change has gained serious attention in academia. Wealthier nations must support poorer countries with money and technology since they are often the most vulnerable to its impacts. At the same time, developing nations should take action to reduce their emissions and adapt to the changing climate. Finding a fair balance between these responsibilities is crucial for a united global effort in tackling climate change head-on.

Climate change is a global problem, and everyone must do their part to address it. Developed countries have a responsibility to help developing countries, which are often the most vulnerable to the effects of climate change. However, developing countries also have a responsibility to take action to reduce their emissions and adapt to the changing climate.

Developed countries have historically been the biggest emitters of greenhouse gases, and they have benefited the most from economic growth that has come at the expense of the environment. It is therefore only fair that they should take the lead in addressing climate change. This includes providing financial and technological support to developing countries so that they can also reduce their emissions and adapt to the changing climate.

Capitalism can be held responsible for climate change due to its inherent focus on profit-driven growth and consumption. In a capitalist system, industries compete to maximize profits, often prioritizing short-term gains over long-term sustainability. This drive for endless economic expansion promotes resource extraction, overproduction, and excessive consumption, all of which contribute to greenhouse gas emissions and environmental degradation. Furthermore, capitalism's emphasis on individualism and free markets hinders collective action and regulation, impeding the implementation of effective climate policies. The relentless pursuit of profit, coupled with the lack of systemic checks and balances, makes capitalism a key driver of climate change.

Design by : Ibrahim YahyaDesign by : Ibrahim Yahya

Consumption and production

Furthermore, the global economic system is built on a model of consumption and production that relies heavily on fossil fuels and other unsustainable practices. This has led to the acceleration of climate change and its impacts on vulnerable populations.

Researchers are increasingly worried about capitalism's impact on climate change and the environment because the system is based on the exploitation of natural resources and the externalization of costs onto society and the environment. Capitalism prioritizes economic growth and profit over environmental and social concerns, leading to unsustainable practices such as overconsumption, the use of fossil fuels, and the destruction of natural habitats.

The negative impacts of capitalism on the environment are becoming increasingly apparent, with rising global temperatures, sea level rise, and extreme weather events such as droughts, floods, and storms. These impacts disproportionately affect vulnerable populations, such as those living in developing countries and low-income communities, who are often the least responsible for the emissions that cause climate change.

Campaigns against capitalism

Young people across the world are running mass campaigns against capitalism because they see it as a system that perpetuates inequality, injustice, and environmental destruction. They believe that capitalism prioritizes profit over the well-being of people and the planet and that it is incompatible with a sustainable and equitable future.

Moreover, young people are concerned about the future they will inherit and are demanding that their voices be heard in the decision-making processes that shape their lives. They see the urgency of the climate crisis and the need for bold action to address it, and they believe that capitalism is a barrier to the systemic change needed to create a just and sustainable society.

Capitalism, as it is currently structured, has contributed significantly to the climate crisis, and many argue that it cannot save the planet without significant changes. The system prioritizes economic growth and profit over environmental and social concerns, leading to unsustainable practices that accelerate climate change and its impacts.

However, there are ways in which capitalism could be restructured to address the climate crisis. Some argue that a new form of capitalism, sometimes referred to as "sustainable capitalism" or "stakeholder capitalism," could prioritize sustainability, social responsibility, and long-term value creation over short-term profit maximization.

This form of capitalism would require businesses to consider the impacts of their actions on the environment, society, and future generations, rather than just their shareholders. It would require investment in renewable energy, sustainable transportation, and energy-efficient buildings, and the adoption of circular economy principles to reduce waste and increase resource efficiency.

Design by : Ibrahim YahyaDesign by : Ibrahim Yahya

Furthermore, governments can play a significant role in shaping the market to incentivize sustainability, through regulations, taxes, and subsidies. They can also invest in infrastructure, research, and development to support the transition to a low-carbon economy and create green jobs. However, the transition to a sustainable form of capitalism would require significant changes to the current economic system and a collective commitment to addressing the climate crisis. It would require the participation of all stakeholders, including businesses, governments, civil society, and individuals.

In the face of mounting evidence linking capitalism to climate change, urgent steps need to be taken by governments and corporations to address this pressing global issue. The relentless pursuit of profit and unbridled consumption inherent in the capitalist system has contributed significantly to environmental degradation. To mitigate these impacts, a paradigm shift is needed, necessitating swift and decisive action.

Governments must spearhead the transition by investing in renewable energy sources, encouraging sustainable agricultural practices, and implementing stringent policies that incentivize businesses to prioritize environmental sustainability over maximizing profits. By embracing these measures, we can pave the way for a more sustainable and climate-resilient future.

Abdul Rehman Nawaz is a research assistant at the Institute of Development and Economics Alternatives (IDEAS). Ali Asad Sabir is a political economist and senior research assistant at IDEAS. All facts and information are the sole responsibility of the writer