Capitalism

Two recent communications from respected global organizations have underscored the long-term impacts of climate change – and the potential vast effects on business. Communiques from the World Bank and the United Nations both highlighted the complex, long-lasting and extraordinarily costly nature of the problem.

The creator of The Wire, David Simon, delivered an impromptu speech about the divide between rich and poor in America at the Festival of Dangerous Ideas in Sydney, and how capitalism has lost sight of its social compact. This is an edited extract.

In preparation for the upcoming North American Leaders Summit which will be held in Toluca, Mexico on February 19, U.S. Secretary of State John Kerry recently held a meeting with his Canadian and Mexican counterparts. Over the last number of years, not as much attention has been given to the trilateral relationship. Instead, the U.S. has essentially pursued a dual-bilateral approach with both Canada and Mexico on key issues including border and continental perimeter security, as well as regulatory and energy cooperation.

Once a year the world's political and business leaders flock to a small town in the Alps, where they drink champagne, chow down on fondue and chocolate covered strawberries, hit the ski slopes, bathe in hot tubs and exchange business cards as they congratulate themselves on the fine job they're doing running things. Oh, and while in Davos, Switzerland, they also participate in the World Economic Forum (WEF), which is underway this week and ends Saturday.

WASHINGTON — Coca-Cola has always been more focused on its economic bottom line than on global warming, but when the company lost a lucrative operating license in India because of a serious water shortage there in 2004, things began to change. Today, after a decade of increasing damage to Coke’s balance sheet as global droughts dried up the water needed to produce its soda, the company has embraced the idea of climate change as an economically disruptive force.

Most writings on climate are tedious or polemical. Windfall, journalist McKenzie Funk's fabulous new book on the business of climate change, is neither. Funk's reporting takes him all over the globe. We meet investors who are buying up land in Africa and water rights in Australia and the American West, and are wagering hundreds of millions of dollars that climate-related drought and food shortages will earn them a fortune.

In his new book, Windfall, journalist McKenzie Funk visits five continents to bring back stories of the movers and shakers at the forefront of the emerging business of global warming. He introduces us to land and water speculators, Greenland secessionists hoping to bankroll their cause with newly thawed mineral wealth, Israeli snow makers, Dutch seawall developers, wannabe geoengineers, private firefighters, mosquito scientists, and others who stand to benefit (at least in the short term) from climate change.

"Don't shoot the messenger." Richard Smith's message may be sobering, but it's based on information that suggests we've reached a tipping point when it comes to climate change. How can we reverse the effects of greenhouse gases changing our climate? Smith says we can't – at least not under a corporate capitalist framework. The logic of corporate capitalism simply won't allow the large-scale changes needed to reverse the disastrous effects global climate change will have on life on our planet.

This article is a lightly revised and updated version of the article originally published as "Beyond Growth or Beyond Capitalism?" in Real-World Economics Review, issue 53, June 26, 2010, pages 28-42.

The past couple of decades of globalization have been a disaster for planetary ecosystems, indigenous peoples, and most middle-class citizens, but a gravy train for big investors, investment bankers, and managers of transnational corporations.