Are democratic politics and capitalism suitable for dealing with climate change?

Patrick Medlicott - 18 February 2025

Introduction

The IPCC report of 2022 notes that climate change is a major risk to planet Earth. (IPCC 2022). New Zealand’s Net Zero Carbon Act has been passed by parliament, and has been accepted by the National party, Labour Party, Green party, ACT party and Te Pati Maori. The NZ First Party is ambivalent. This would suggest that very urgent and far-ranging changes are necessary to our society in New Zealand within the next six years, to try to get to 1.5° C of global warming by 2050 - or preferably earlier. It should be noted that we are already close to that target in 2024, and atmospheric greenhouse gases have increased rather than decreased year by year since then. These have led to year-on-year increases in record temperatures, with associated increases in floods, droughts, wildfires, strength of storms, sea level rise and catastrophic effects in many countries including New Zealand. The most affected countries are in the “Global South”, yet they produce the least greenhouse gases. New Zealand is the 7th highest producer of greenhouse gases per person in the world.

There is still significant denial in New Zealand to the realities of climate change. There are several reasons for this. Denial of science facts can be due to knowledge deficit, cultural cognition and bias, conspiracy thinking and “Magical Thinking” (religion and politics). The younger members of our population are very much better at understanding what is going on. The older members of our population, especially those who are in the higher wealth brackets, seem to continue to ignore the science, because dealing with the implications does not suit their “worldview.” They do not seem to consider that it is not their generation that will be affected, but the generations to come, and they are unprepared to make sacrifices in their lifestyles and in their wealth which will be necessary to achieve the goals in IPCC 2022 to keep global warming under 1.5°C. To do so all people in New Zealand society will have to undergo a radical change to their lifestyles over the next 20 years. The first question to ask is whether our political system of Westminster style adversarial politics is suitable for the challenge?

It is true that all the major political parties in New Zealand have accepted the Net Zero Carbon act. There is however doubt as to the commitment that the more right-leaning parties (National, ACT and Particularly NZ First) will make to the act, now that they are in positions of power. The belief that it is important to continue to extract coal, oil and gas, and that it is necessary to put the economy before the environment, does not sit well with getting to the IPCC goals. The attitude from the fossil fuel companies, that humankind can continue to extract and burn more than the planet can cope with, is still endemic. The notion that “Natural Gas” is a bridging fuel is part of this self-serving rhetoric. The postulate that we have a right to utilise the natural world is based on Western religious thought and political magical thinking. The planet does not exist simply to allow its most greedy species to extract its resources. Humankind should accept that it is only a portion of the natural world, and must coexist with it. The problem is that business as usual, under the cover of neoliberal capitalism with its extraction and consumption model, will not leave the world in a liveable state for our mokopuna.

Indigenous peoples have learned, over a prolonged period, that they must coexist with the natural world. Certainly, they have made mistakes that led to extinction of multiple species, but they have a more enlightened approach than the dominant Western attitude that everything is there to be utilised, which has led to vast increases in atmospheric CO2 that has warmed the planet by 1.1C since the start of the Industrial Revolution. Many ordinary people accept that there is a Climate Emergency (around 70% in polls in NZ). The emergency, as mentioned above, requires radical change in NZ society. Can radical change be used in dealing with this emergency by the Westminster democratic system?

Farming contributes around 50% of New Zealand’s GHG emissions. This is “the elephant in the room”, or perhaps the “dairy cow in the room” This is where politics and capitalism mostly collide. NZ politics until recently was controlled by the “landed Gentry” (Max Rashbrooke). The male landowners after colonisation were in control of parliament because of having the franchise. Since then, parliament has become more cosmopolitan. Maori and women now have the franchise, and parliament is now 50% women, and there are also significant numbers of Maori members outside of the Maori seats. The representation however is still largely of “Landowners”, i.e. those owning land and houses (some politicians own 7 or more) - albeit not all farmers. MMP has improved the representation of other groups, but land and property still dominate.

Farmers’ representatives maintain the trope that “NZ feeds the world”. In actuality it feeds a very small percentage of the 8 billion people now on the planet, and it feeds them by converting plants into animal protein which, although claimed to be the “greenest” in the world, is in fact not necessary. Land would be better utilised for growing plants for human rather than animal consumption. The figure that it takes 800 litres of water to make 1 litre of milk is frightening, especially when that litre of milk is converted to powder (at considerable GHG cost) and sold overseas to women for use as baby formula (Prof Alex Macmillan 2021). All the world health authorities however believe “breast is best.” There are many farmers who are trying to change the system and decrease growing animal protein from plants and become more regenerative. However “Groundswell” and other groups are obstructive, to say the least. Nicola Harvey in her 2022 book “Farm” discusses all these dilemmas. George Monbiot in his 2022 book “Regenesis” notes that farming is our species’ most destructive activity over the last millennium. He particularly uses the example of NZ dairy farming. Unfortunately our banks and financial systems are heavily involved in this activity, and our politicians are continuously lobbied by their representatives, and also likely funded by them! Covertly, of course.

The last time Western democracies faced a comparable situation of likely worldwide collapse was during the Second World War. At this time, rather than adversarial politics and business as usual, political parties became true coalitions to deal with the threats. In the United Kingdom this was under Winston Churchill, and in the United States under Franklin Delano Roosevelt. It is accepted that this involved a degree of loss of personal ‘freedoms’, but this did mobilise most of society to work together to deal with the recognised threats. Our present system in New Zealand will likely act too little and too late. It may require the activation of multiple “Tipping Points” in the climate system before the realisation hits home, however by then it may well be too late. Unfortunately, it is only when a rich person’s beach house is destroyed by sea level rise, storm, flood or fire that the reality may hit home that we are facing a climate Armageddon. To avoid this, a notable change in our political system may be necessary. We need to go on a “war footing”. A true “coalition” of political forces in New Zealand with powers to make often unpleasant changes is necessary. Parliamentarians must work together, not against each other. This must be done with economic and social justice to those who will be affected most, and the burden of change will have to be evenly distributed, even if this involves redistribution of the society’s resources, i.e. wealth.

Can this occur under the present system? There is doubt that under the present economic system of Neoliberal Capitalism that this can occur. This brings us to the second problem in dealing with climate change: Capitalism.

Capitalism, as practised over the last two hundred years, and neoliberal capitalism over the last 50 years, has led to our present climate emergency. The idea, as mentioned above, that the rest of the planet is an “externality” in the financial system must change. Kate Raworth in “Donut Economics” states “in the early 21st century, we have transgressed at least four planetary boundaries, billions of people still face extreme deprivation, and the richest 1% own half of the world’s financial wealth. Today’s economy is divisive and degenerative by default. Tomorrow’s economy must be distributive and regenerative by design. Endless growth on a finite planet is a logical impossibility, yet we are locked into this madness, and we have already hit all the environmental and ecological boundaries we cannot “grow” anymore.” Kenneth Boulding, who was an economist, wrote in 1973 “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.”

GDP growth (gross domestic product) is proposed by the leader of the National party as a way of getting New Zealand out of the worldwide present economic problems. The late Robert Kennedy stated. “GDP measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.” Other right-wing politicians are obsessed with the financial deficit, and believe that a country should budget like a household. John Fitzgerald Kennedy said the following about deficits. “The deficits that count: The good jobs deficit; the savings deficit; the healthcare deficit; the education deficit; the infrastructure deficit; the climate deficit; the democracy deficit.” Another author states “all economic activity creates only temporary value, at the expense of the degradation of the resource base on which it depends.”

How then can capitalism, which is responsible for the present situation, be suitable for the response to the climate emergency? Mark Carney, previously the head of the reserve bank of Canada and the Reserve Bank of the UK, believes that it is possible for capitalism with the correct incentives to deal with the climate emergency. He however gives a caveat, and talks about the three lies of finance. “This time is different; markets are always right; markets are moral.” Other authors, including Mariana Mazzucato, believe that in its present form capitalism is unsuitable for this task. In her book “Mission Economy” she discusses Bad Theory and Bad Practice in economics, and the 5 Myths that impede progress. Myth 1: Businesses create value and take risks; governments only de-risk and facilitate. Myth 2: The purpose of Government is to fix market failures. Myth 3: Government needs to be run like a business. Myth 4: Outsourcing saves taxpayers money and lowers risk. Myth 5: governments shouldn’t pick winners. She uses the example of putting a man on the moon to illustrate these. Heresy, I am afraid, for the ACT Party.

Henry Ford, the first mass producer of automobiles who well understood the capitalist system, stated “It is perhaps well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” Franklin Delano Roosevelt (FDR) stated, “we have always known heedless self-interest was bad morals: we now know that it is bad economics”. Heresy again for the ACT Party.

Dr Rhys Jones (Ngati Kahungunui), Auckland University Associate Professor Te Kupenga Hauora Maori and Ora Taiao member, recently wrote that he felt the underlying problem causing climate change was Colonialism (Stuff 2022). His reasoning is understandable, however behind the colonialism he mentioned it is the capitalist system which is responsible.

There is not a definitive answer as to exactly what changes might help economics and the financial system in dealing with the climate emergency, but here are some ideas that might help in understanding where we are now and where we need to go.

The four laws of capitalism: The only lasting connection between things is the cash nexus; It does not matter where something goes if it does not re-enter the circle of capital; The self-regulating Market knows best; Nature’s bounty is a gift to the property owner. (Capitalists believe that nature exists to be exploited by humans, a tenet perfectly in tune with Western religion.)

A more Holistic approach might be: Everything is connected to everything else (Newton’s third law); Everything must go somewhere; Nature knows best; There is no such thing as a free lunch. Conditions for a Steady State economy are: Never extract more than ecosystems can regenerate. Never waste or pollute more than the ecosystems can safely absorb. Another solution to the present crisis of the Planet has been mentioned. Kick big money out of politics, radical media ownership reform, strict campaign finance laws, reverse corporate personhood, dismantle monopolies, manage resources more as commons, democratise international global governance, democratise shareholder votes, put employees on company boards. The recent election again of President Trump unfortunately means that these are less likely, and the response to the Climate Emergency is greed and more greed. ACT should be happy?

We live in capitalism. Its power seems inescapable. But then, so was the divine right of kings. Any power can be resisted and changed by human beings. The name of our beautiful reward is not profit. Its name is freedom. Money is not ineffable, paying one’s debts is not the essence of morality, all these things are human arrangements that can be changed. Tim Jackson states “we are persuaded to spend money we don’t have on things we don’t need to make impressions that don’t last on people we don’t care about”.

What are the solutions that might be available? We should look towards a Post Growth Society: This is based on: Establishing limits; Countering consumerism; Tackling inequality; Fixing economics. This change would require a radical reorganisation of capitalism, where the good of the community is more important than the good of the individual, and where economic and social justice would prevail. This is utopian, however unless humankind seriously considers this then as a species we are in profoundly serious trouble. To be sanguine about the planet surviving is reasonable. Evolution will, in the fullness of time, hopefully replace our species with one better adapted to its place in nature. Cockroaches will withstand the nuclear holocaust!

There is no “we” that is causing climate change. There are a few rich white men that have done the bulk of the damage, by sheer greed. The earth is not dying, it is being killed, and those that are killing it have names and addresses. “This emergency is personal!” (Extinction rebellion handbook).

Conclusion

There are certain facts concerning climate change which are inescapable. Unfortunately, these facts do not seem to have reached many of the politicians in Aotearoa/New Zealand. The famous physicist and philosopher Carl Sagan wrote “the truth may be puzzling. It may take some work to grapple with. It may be counterintuitive. It may contradict deeply held prejudices. It may not be consonant with what we desperately want to be true. But our preferences do not determine what is true.” He also stated that (in a free society, my words) “You can have your own opinions, but you can’t have your own facts”.

Is democratic politics suitable for dealing with climate change? Almost certainly not. Unless we can engage with the climate emergency on a “war footing” we have little chance of reaching 1.5° C. Latest projections are 2.5C to 3C by the end of this century. Certainly, in NZ, unless farming practice is radically changed and farming enters the Emissions trading scheme fully, we cannot.

Is capitalism suitable for dealing with climate change? Certainly not. The neoliberal capitalist consumer has been programmed since the Reagan/Thatcher era to only consider their selfish desires, reinforced by advertising and marketing. The monetisation of everything in our present society does not allow it to develop the mindset to put aside personal considerations to see the planetary picture and to look after each other. This is especially so in the time of significant inflation, Covid 19, and multiple other uncertainties. During uncertain times, the median house owning voter and business votes with their back pocket, and will put aside considering climate change as too far ahead or too expensive and leave the burden to their grandchildren.

Bernard Hickey, the economic and social commentator from “The Kaka” states “Climate change is the ultimate betrayal of intergenerational equity.” (2022).