Although many environmentalists say that socialism must be introduced to solve environmental problems, the environmental record of socialist counties has been very poor indeed. Other environmentalists blame capitalism for degrading the environment and call for it to be replaced without specifying what is to replace it.
Green capitalists, on the other hand, say that where capitalism has degraded the environment it is because natural resources such as the atmosphere and the oceans have not been costed. It is the tragedy of the commons that people are motivated to overuse resources that add value but cost nothing. They further say that if externalities are properly costed, people will have an incentive to use them efficiently and sparingly. They support the notion of internalizing these externalities, with many of them calling for carbon taxes and carbon trading so that the pollution costs enter the prices of products, leading people to turn to less polluting alternatives. Green capitalists argue that firms that use fewer resources such as energy, raw materials or water, find this is good for profits as well as the planet.
They further point out that if society through its governments sets targets, capitalist entrepreneurs will come up with cost effective ways of achieving them. But it’s not just governments that are doing this. Surveys report that consumers show more brand loyalty and willingness to pay higher prices for products perceived to be sustainable. This is especially true among Millennials and Generation Z, who currently make up 48% of the global marketplace and have not yet hit their peak spending levels. Firms that want to capture a chunk of that market have a financial interest in producing sustainably.
Entrepreneurs in search of profits are already making renewable energy sources more efficient, and are bringing its costs down. Renewables are technologies, not fuels, and technologies develop and improve, whereas fossil fuels remain as constants. And given the ability to produce more and more electricity from renewables, the development and spread of electric vehicles is offering a green revolution in transport. People need not travel less, but just to travel clean.
Environmentalists assume that if animal husbandry is bad for the environment, people must learn to eat less meat, but the green capitalist’s answer is to produce meat from non-animal sources such as cultured (lab-grown) meats. Capitalists are also applying GM and CRISPR technologies to enable more food to be produced on less land, leaving land free for reforestation, and thereby increasing the world’s tree cover.
The capitalist’s answer to the overfishing of the world’s seas is to insert the discipline of markets into what has been a common resource. Iceland and New Zealand now assign tradable quotas to fishing boats so that they have a commercial interest in sustaining stocks. If a boat hauls in more than its quota of designated fish, they buy quotas from other boats instead of dumping the catch, EU-style, to avoid fines.
When supermarkets, seeking profits, buy cheaper tomatoes from warmer countries rather than pay for expensive ones that need energy inputs to grow them, this has been castigated as “food miles,” but the reality is that they are effectively importing renewable sunshine from abroad rather than requiring energy resources to be expended at home.
The effect of all of this capitalist and entrepreneurial activity is to make a convincing case that protecting the environment does not require the overthrow of capitalism and markets, as many environmentalists demand. Instead it requires the application of them.