Why climate change is globalisation’s biggest challenge yet

Jeremy Green - Lecturer in International Political Economy, University of Cambridge, SPERI Honorary Research Fellow

The fires are a planetary smoke signal warning us to recognise that the gravest threat we face is not the stalling of globalisation through slower economic growth, populist nationalism, and trade wars. It is the accelerating movement of our Earth System towards conditions that pose an existential risk to humanity. Leading Earth Scientists now warn of an impending ‘Hothouse Earth’ scenario in which rapid and uncontrollable warming sets in motion transformations that severely threaten our societies, politics, economies and capacity to exist as a viable species.   

These two threats are inextricably bound together – global warming and ecological degradation are a product of the rapid carbon-intensive economic growth that has underpinned globalisation. With the expansion of the global economy from the 1950s a process known as the ‘Great Acceleration’ led to rapid increases of socio-economic indicators, from GDP growth to urbanisation, that are causally linked to rising CO2 emissions and environmental deterioration.

We now face a dismal situation. Unless we undertake immediate and radical measures to curb greenhouse gas emissions and restore the Earth’s capacities to cool itself, we risk triggering ‘tipping points’ that lead to rapid, self-reinforcing and uncontrollable increases in global temperatures with devastating consequences for humanity. 

Addressing the climate catastrophe involves fundamentally rethinking our approach to globalisation. My new book Is Globalization Over? shows how understanding the longer history of globalisation can help us.  I argue that the present crisis in the global economy is unique because the solution that has been used to overcome previous periods of international economic instability, like the 1930s and 1970s, is no longer feasible. We cannot simply reboot the global economy to deliver more carbon-intensive economic growth and restore the legitimacy of global capitalism – because it is our pursuit of limitless growth that is driving the climate crisis.

Responding to climate change poses a fundamental challenge to the ideas that have shaped globalisation. Since the eighteenth century, liberal economic ideas have guided the quest for an integrated international economy. Liberals imagine a world in which politics and economics can be separated and the global extension of markets can achieve rising prosperity based on continuous economic growth. Obeying the rational ‘laws’ of the market and insulating them, as far as possible, from the petty jealousies and irrationalities of politics can bring about a peaceful and prosperous global economy from which all benefit.

Economic liberalism has succeeded because of its ability to reinvent itself during periods of crisis and instability, finding new ways to keep economies growing. After the Great Depression, for example, John Maynard Keynes called for more active government intervention in the economy, using taxation and spending to achieve full employment and stable growth, avoiding prolonged economic downturns.

But the climate crisis poses two unique challenges to economic liberalism and the globalisation it has shaped. Firstly, it forces us to abandon the fundamental assumption of limitless potential for (carbon-intensive) economic growth. This is a dangerous assumption from the fossil fuel age.  It is incompatible with respect for the Earth’s geophysical limits. Urgent action is required to de-carbonize our economies. But the evidence for long-term decoupling of economic growth from carbon emissions and resource depletion is weak. More growth tends to mean more CO2 emissions and environmental destruction.

Secondly, tackling climate change requires intervention and democratic economic planning, from the global to the local, that liberals have only accepted during times of exceptional and temporary emergency – like the mobilisation for World War II. Our market-dominated societies have so far proven woefully incapable of responding to the climate emergency. Avoiding Hothouse Earth will require major intervention from international organisations, states, and local communities. The IPCC estimates that achieving the 1.5 C limit agreed at Paris will require annual energy related investment of $900 billion between 2015-2050. 

Long-term planning is now necessary, with ecological goals overriding market imperatives. Scientific knowledge and projections about ecological indicators must play a bigger role in guiding production and consumption. Whether liberalism, stripped of the telos of unending growth, can mutate once more to accommodate these changes remains an open question.

The vast investment needed to decarbonise the economy will generate jobs and growth in the short-term. But the kind of economy and society that we transition to will ultimately need to be much less dependent upon economic growth. Instead, it needs to be based on reduced consumption, sharing of resources, sustainability and global solidarity.

What does this mean for globalisation? It does not mean abandoning globalisation and turning to self-contained national and local economies. Our economies and societies are too interconnected, depending on each other for vital goods and resources, for this to be feasible or desirable.  But it does mean that we will have to change the ideas and institutions that govern globalisation, displacing markets and turning to developmental goals that are democratically planned, long-term, and scientifically informed. Markets must work in the service of achieving these priorities.

We will need to transform the balance and purpose of the cross-border flows of goods, capital, people and ideas that have propelled globalisation. Some of those cross-border flows, like unsustainable trade practices and fossil fuel sector capital flows, will have to stop. While others, like aid transfers from the Global North to the Global South and flows of climate related expertise and investment towards the worst affected regions, will have to grow rapidly. Globalising solidarity, by connecting green transformations of our domestic economies, politics and societies with new planetary priorities that think of our needs as one species among many is the best way to meet the challenge of climate change.

If we do not take these measures then the intertwined futures of the planet and globalisation look bleak. We risk setting in motion another dangerous and uncontrollable feedback loop – between ecological deterioration, human suffering, and the rise of toxic nationalism, authoritarianism, militarism and disintegration.

The stakes for transforming globalisation could not be higher. In an age of climate crisis, whether or not we can change the global economy in a progressive and sustainable direction will shape our future as a species.