Generation Market-Liberalism

By Beth Jean Evans

Over the past few years, there has been increasing media, political and public attention paid to the emission of greenhouse gases and their effect on the earth’s climate. Former US Vice President Al Gore’s documentary, "An Inconvenient Truth"—which laid bare the facts about global warming—quickly became one of the highest grossing documentaries in history, spurring public outcry and begging legislative reform. The typical political responses ensued: lofty promises and grandiose claims poised to ride the wave of public outrage, destined to rejoin the flat sea of political meaninglessness.

Given the near-unanimous scientific consensus on the significant role of anthropogenic emissions in climate change and the unprecedented levels of public concern being expressed by voters, why is little substantive progress being made to reduce green house gas emissions? Why is it that the international community remains seemingly unable to develop a climate change abatement agreement that countries are able and willing to comply with?

The 1995 Kyoto Protocol—the international community’s best effort at an all-encompassing emissions abatement regime—has had limited success, with some of the largest greenhouse gas emitting nations professing either de facto or de jure non-participation. The Clean Development Mechanism (CDM), laid out in Article 12 of the Kyoto Protocol, was hailed at its inception as the ‘key that unlocks the barrier’ (Repetto, Robert. "The Clean Development Mechanism: Institutional breakthrough of institutional nightmare?") to the ratification of Kyoto for its purported ability to end selfish squabbling between developed and developing nations. The CDM recognizes that in pursuit of a solution to climate change, the developed nations do not want to lose their economic competitiveness while developing nations refuse to sacrifice rapid development for the sake of environmental sustainability. Essentially, the CDM allows developed nations to fund ‘clean development’ projects in developing nations in lieu of reducing emissions at home. All emissions reductions achieved as a result of the projects are counted towards the investing nation’s own Kyoto requirements. In theory, developed nations get to take advantage of inexpensive abatement options in the developing world and in return, the developing world reaps the benefits of investment in its infrastructure. However, this has failed to achieve either the emission reductions or the developing world participation intended. The inadequacy of Kyoto and the CDM—which only the staunchest optimist will refute—is not a result of poor implementation or unrealistic timeframes, but rather is a result of an inherently and unavoidably flawed theoretical basis: market-liberalism.

In his article The Fate of Sustinable Development Under Neo-liberal Regimes in Developing Countries, Haque Shamsul argues that it is the vested interests of the dominant individuals, classes, and global institutions that facilitate the widespread adoption of market-liberal values, and not economic, social, or environmental rationality. In March 2007, Sir Nicholas Stern, the former chief economist of the World Bank, stated that climate change was, "the greatest and widest-ranging market failure ever seen" (Secretary General’s Address to the UNFCCC). If climate change is not naturally mitigated by the ‘invisible hand’ of market-liberalism, does it make sense to base a global warming abatement regime upon a conceptual model already proven to be an ineffective means of addressing the issue?

The CDM glaringly demonstrates the inadequacy of this approach. The desire for profit-maximization on the behalf of the investor nations propels project biases towards large-scale industrial gas reductions, which have few or none of the sustainable development benefits promised to the host nation. With no incentive to accept project investment, developing nations—especially those anticipating emissions caps in the next Kyoto commitment period—are becoming increasingly resistant to selling off their cheap abatement options to the gluttonous emission-moguls of the developed world.

The failures of Kyoto and the CDM are conspicuous manifestations of a broader trend in which market-liberalism is pitted against environmental sustainability in what seems increasingly to be a mutually exclusive relationship. The institutionalization and wide-spread acceptance of market-liberal economics, in which profit maximization is the fundamental aspiration, has historically been responsible for the destruction of the environment which regimes such as the CDM now purport to mitigate. This, when supported by evidence of repeated failures of such market-based endeavours, should indicate that if substantial results are to be achieved, the root of the problem, market-liberalism, cannot be used as the basis for the solution.