La fine di un'ideologia: il capitalismo ha finito le risposte?

Has capitalism as we know it run out of answers?

As governments around the world slowly wake up to the challenges of climate change, energy security and environmental degradation, Jonathan Porritt argues that what we need is fundamental change in the kind of capitalism currently dominating the global economy.

I'm struck by how much of today's writing about our looming 'energy crisis' is completely detached from the ideological context in which that crisis is being predicted.

This is baffling. The way we source, produce, use and waste energy today is a direct consequence of the particular model of growth-driven capitalism that has dominated peoples' lives for the last fifty years. In many respects, the crisis is not so much a consequence of 'things running out' (be it oil or gas, or the atmosphere's absorptive capacity), as the inevitable conclusion to a uniquely abhorrent and destructive system of wealth creation.

Of all the defining characteristics of post-World War II capitalism, the centrality of economic growth as the overarching policy objective is perhaps the most important. It has driven turnover in the global economy to a staggering US$45 trillion per annum, doubling in just 25 years, with the volume of world trade now 12 times what it was in 1945. Hundreds of millions of people's lives have been enriched, often dramatically, in the process.Yet as we also know, those dramatic increases in economic activity and material wellbeing have failed to solve many of the world's worst problems (particularly chronic poverty in developing countries), and have created a host of additional problems as a consequence of the environmental and social externalities.

Many of those externalities are energy-related, all the way through from local air pollution issues in both the rich and the poor world, to the global challenges of climate change.However one reacts to the explosion in economic activity and material prosperity over the last 60 years or so, there is no denying that it has been fuelled predominantly by access to cheap oil and gas. Without that massive and exhilarating infusion of plentiful hydrocarbons, our world today would look very different.

They are,by definition, non-renewable resources.They will, inevitably, start running out at some stage in the future.At that point, our lives will change dramatically. Even if we are successful in preparing ourselves for the transition from an oilrich world to a world largely without oil, the disruptions will still be dramatic and potentially disastrous.

This debate has only just started to warm up again.There's an inevitable sense amongst politicians of a certain age that they've 'been there and done that'. Most lived through the oil shocks of the 1970s, and were exposed to a turbulent debate about the possibility of oil running out in their own lifetime. Unfortunately, those concerns sputtered out. Jimmy Carter's enthusiastic but often ill-directed attempts to get the American people to understand the consequences of their gas-guzzling lifestyles (during which he famously described energy conservation as the 'moral equivalent of war') were swept away by the election of Ronald Reagan in 1980. Right-wing commentators and economists seized the moment to lambaste the doom-and-gloom merchants who had predicted the all-butinstant drying up of oil supplies, and the high ground occupied by environmentalists concerned about the physical limits to growth was systematically cut away from beneath them.

Looking back over those 30 years, it's clear that this lost opportunity (to set humankind on a more sustainable energy path) represents the single biggest set back for the environment movement during that time. Instead of shifting both public and private sector investments into energy efficiency, renewable technologies and less energy-intensive infrastructure, we've burned our way through billions of barrels of oil with no thought for the future and no thought for the environmental consequences.

That is now beginning to change.The 'peak oil' debate has been well and truly revived, and Renewable Energy World has carried articles from a number of the most eloquent exponents of the theory that global production will peak much earlier than either the oil companies or the majority of 'independent experts'would have us believe.

Global production peaking is not, of course, the same thing as oil running out. Huge amounts of oil will still be pumped after that point - but on an inexorably declining basis. Politicians just seem to be drifting into this hugely challenging new world without so much as a passing recognition of the fact that oil production could be down by as much as 75% within just 30 years. As Colin Campbell points out in a new collection of articles about the peak oil debate, 'The Final Energy Crisis', we're planning to undertake this transition 'without sight of a substitute energy that comes close to matching the utility, convenience and low cost of oil and gas.'

But is it right to be pressing the panic button at this stage? Long before we see that drop in production of 75%, the price mechanism will, indeed, kick in, and rising prices will extend the period of time that oil remains available for various uses in society - if the worsening consequences of climate change have not already compelled politicians to force all users of hydrocarbon fuels to internalize more of the costs of their use. Many commentators believe not only that these market mechanisms provide the best antidote to today's 'peak oil Cassandras', but that the 'managed volatility' in oil prices in 2004 (exceeding $50 a barrel on a number of occasions) provided proof positive that the system is working quite adequately.

Early in 2005, however, the analysts began to see things rather differently. Prices bumped up against $70 dollars a barrel, and stayed obstinately above the $50 dollar threshold. Goldman Sachs published a report predicting that oil would move to $100 a barrel in a much shorter period of time than anyone was counting on.The debate in America became much more engaged, with a number of heavyweight commentators castigating the inertia of the Bush Administration in refusing to do anything to reduce US oil consumption. After Hurricane Katrina, US motorists suddenly found themselves paying a whole lot more for their petrol, and began to wonder why the big US car companies (particularly Ford and General Motors) seemed to have so little to offer them by way of fuel-efficient cars.

Whilst oil at $100 a barrel will undoubtedly mean the end of the capitalist world as we know it today, it does not necessarily mean the end of capitalism itself. Indeed, a radically different variable of capitalism ('as if the world matters', so to speak!) still seems to me to be by far the most probable way of effecting a 'soft landing' after so many decades of planet trashing, inherently unsustainable expansionism.

For one thing, we should not underestimate the huge economic benefits that will accompany the shift from one form of capitalism to another.

The single most important requirement for structural change required for biophysical sustainability is a shift from fossil fuels to renewable energy sources.The EU has estimated that the renewables business in the EU by 2010 will be valued at $44.5 billion, with a further $20.5 billion from exports in the expanding world markets. The World Energy Council has projected that cumulative global investments in renewables from 2000-2010 will be in the range of $265 billion to $709 billion. This makes renewables likely to be the biggest single market opportunity to emerge in this field (or indeed in any other) through to the middle of this century. It suggests that while the shift to renewables may indeed be an absolute prerequisite for capitalism to become more environmentally sustainable, it also provides an unparalleled opportunity for the kind of entrepreneur-driven technological change in the generation of which capitalism excels.

There will be many other opportunities.Today's technology optimists draw attention to a dazzling array of possibilities across the whole range of environmental impacts,which could serve to reduce these impacts by the amounts required for environmental sustainability. Some of the possibilities are already available, and only require that businesses become aware of them and governments stimulate their introduction for them to become fully competitive in the market place. Others still need development.However,over time and given a favourable framework of public policy, there seems to be no reason why these should not quite naturally become part of the next generation of infrastructure and industrial production. Closed-loop production processes with zero emissions, producer responsibility for material flows through to the end of the life of all products, and full 'recyclability' of these products, could cause today's problems of waste disposal and toxic pollution to be viewed from the vantage point of 2020 in the same light as urban pollution from horse manure in the 1880s or the London smogs of the 1950s.

Nor should we underestimate the importance of new ways of thinking about national security in such a troubled world. Both Europe and America are set to become increasingly dependent on imported oil and gas supplies - much of them from politically volatile regions with little reason to love the West. Indeed, despite enthusiastically pursuing the development of what's left of its own reserves in Alaska and elsewhere, the US is expected to rely on the Middle East for no less than 70% of its oil by 2020.That reliance, of course, is the prime reason for America's military presence in Saudi Arabia and Iraq - a presence which provides Osama bin Laden with the strongest possible pretext for continuing to wage war (in his terms) on US imperialists. Our need for oil makes us insecure.

So we might be forgiven for seeking some crumbs of comfort from President Bush's announcement of billions of dollars'worth of research into hydrogen fuel cells as one means of pursuing 'energy independence'.That's a relative drop in the ocean, of course, when set against the US Administration's unbridled enthusiasm for Big Oil, but it's a start. And it's not beyond hope that, sooner rather than later, we might all wake up to the realization that true independence means a decisive shift away from fossil fuels in favour of a combination of renewables and improved efficiency - both of which offer huge scope for progress. Energy guru Amory Lovins calls efficiency gains 'the rapid deployment energy resource' - it takes years to discover and develop a new oil field, but just months to make sufficient efficiency savings to make that oil field redundant before it even starts pumping.

In 'Winning the Oil Endgame', Lovins gives us a comprehensive account of the way in which US dependence on oil imperils not only its own national security but inflicts on US taxpayers a huge bill in terms of both direct and indirect costs. If ever there was a time for the US Administration to free itself of that dependency, it has to be now - the imported proportion of US oil will rise from around 50% today to around 70% by 2025 (compared to 66% in the European Union), and policy-makers are well aware that even today's figure is twice the level of imports in 1973 at the time of the first Organization of the Petroleum Exporting Countries (OPEC) oil shock. In 2000, these imports cost $109 billion, accounting for a full 25% of the US trade deficit, which has become such a major headache that it's eroding the value of the dollar - which in turn boosts the price of oil.As Alan Greenspan has often pointed out, 'all economic downturns in the US since 1973 have been preceded by sharp increases in the price of oil'.

But the indirect costs are if anything more of a problem than the direct costs.A quarter of US imports come from OPEC countries, and one seventh from Arab OPEC countries. Reliance on such unstable sources means huge costs in terms of having to protect access and maintain a substantial US presence throughout the Middle East. By analysing US Department of Defence figures,Lovins comes to the conclusion that the annual cost to US taxpayers through the 1990s was anywhere between $54 billion and $86 billion dollars, which means 'the US pays two to three times as much to maintain military forces poised to intervene in the Gulf as it pays to buy oil from the Gulf.'

So what possible credibility could there be in a model of economic progress which imagines China and India blindly following in America's footsteps in terms of energy and resource consumption? As Lester Brown points out in his hugely persuasive 'Plan B':

• 'If China were to have a car in every garage,American style, it would need 80 million barrels of oil a day - more than the world currently produces. If paper consumption per person in China were to reach the US level, China would need more paper than the world produces.There go the world's forests. If the fossil fuelbased, automobile-centred, throw away economic model will not work for China, it will not work for the other 3 billion people in the developing world - and it will not work for the rest of the world.'

Yet,'impossibilism'of one kind or another is still rampant all around the world - business-as-usual models of exponential economic growth, mitigated at the margins by slightly tougher environmental regulation and countless tracts extolling the benefits of corporate social responsibility are still dominant. And I hope the attentive reader will have noticed that I have barely mentioned climate change and the degree to which rapidly accelerating patterns of climate-induced damage to our economies and our quality of life will compel the transition from one kind of capitalism to another, regardless of what is going on elsewhere.

Even those who do not share the kind of analysis presented here, based upon an understanding of environmental limits,have good reason to be concerned about the durability of today's particular model of capitalism.A combination of different factors - the deregulation of cross-border capital flows,the emergence of currency trading on an unprecedented scale in today's 'casino economy', increased liberalization exerting downward pressure on wages and prices, growing disparities in wealth both within and between countries, extraordinarily high levels of debt in so many countries and particularly in the US, oil trading at around $60 a barrel - makes the maintenance of our current global economy look like an extremely dangerous high-wire act, with the prospects of a vertiginous collapse seeming ever more likely.

Nothing lasts forever, and there's little doubt that viable alternatives to capitalism (or, at least, a very different model of capitalism) will emerge over time. Capitalism is a complex, adaptive system, and is clearly capable of profound and rapid shifts. The question is 'when' not 'whether', and in which direction.

Whether it's a soft landing or a very, very hard landing, depends almost entirely on how quickly we can accelerate the transition to an ultra-efficient, sustainable and largely renewable energy economy. That is why exponents of renewable energy should not be naive about the ideological stakes for which they are playing.

Jonathon Porritt is Programme Director of Forum for the Future and Chairman of the UK Sustainable Development Commission
e-mail: rew@jxj.com
web: www.forumforthefuture.org and www.sd-commission.org.u