Key evils of neoliberal free market economics: climate disruption, overshoot and collapse, increasing homelessness

Opinion piece by George Preddy.

George Preddey is a former atmospheric physicist (DSIR), futurist (CFF), tertiary teacher (VUW), disaster manager (MoCD), chief adviser (MoE), and international tertiary education consultant (ADB, ILO, OECD, UNESCO, World Bank).

Two contrasting colour illustrations on the back cover of the NZ Listener (July 2-8) are disquietingly reminiscent of contrasting sketches that appeared in a 1981 report on climate disaster by the Commission For the Future, 35 years ago.   These illustrations and sketches feature the Beehive as in 1981 and 2016 and as inundated later this century by rising sea levels, now unequivocally attributed by climate scientists to climate disruption.

A conjecture that CO2 emissions from the burning of fossil fuels would cause climate disruption was published 120 years ago in 1896 by the Swedish physicist Arrhenius.  Unequivocal proof of Arrhenius’ conjecture has been provided by decades of peer-reviewed science consolidated in the fifth Assessment Report of the Intergovernmental Panel on Climate Change (AR5, 2013).

A strong driver of climate disruption and sea level rise is neoliberal free market economics, in many respects an ideology rather than a science.   A truly “free market” is a myth since free trade in child labour or heroin would be unacceptable, even to economists, as should free trade in carbon.   The belief that the so-called “invisible hand” will optimally match supply and demand defies rational explanation.   There is compelling evidence that the so-called “trickle down” theory simply doesn’t work.   Indeed data recently released by Statistics New Zealand shows that the divide between the rich and the poor is growing faster in New Zealand than in any other developed country.   In 2016, some 305,000 New Zealand children are living in poverty, some in cars.

Another driver of climate disruption is outlined in the Limits to Growth (L2G) report published by the Club of Rome in 1972.   L2G describes a set of computer simulations of a future Earth.   Its business-as-usual (BAU) projection predicts overshoot and collapse of the global economy, environment, and human population from about 2020 onwards.   L2G’s central argument, rejected by most economists and politicians but self-evident to most scientists, is that growth within any closed system including the Earth’s closed biosphere is ultimately unsustainable and inevitably leads to overshoot and collapse.   L2G’s BAU projection has accurately tracked 40 years of subsequent statistical data collected by many international agencies, and accordingly should be taken very seriously.   So too should the warning of a preeminent scientist in 1954, at that time describing the existential threat posed by nuclear weapons that continues unabated today but equally applicable, in my view, to climate disruption and to overshoot and collapse from about 2020 onwards.

“We shall require a substantially new manner of thinking if mankind is to survive.”

(Professor Albert Einstein, 1954)

Another indicator of overshoot and collapse is the increasing global divide between the rich and the poor demonstrated by global increasing homelessness.   This divide is growing faster in New Zealand than in any other developed country.   In his book Capital in the Twenty-First Century, economist Thomas Piketty (2013) argues that the divide between the rich and the poor will continue to widen as long as political decision-makers continue to tax income rather than wealth.   According to Piketty’s reasoning, New Zealand should progressively shift from taxing income, especially of low wage workers, to taxing wealth, especially wealth derived from capital gains (currently tax-free).

Climate disruption is a compelling example of overshoot and collapse.   AR5 predicts emissions growth driven by population and economic growth (without “additional mitigating measures”) will result in a mean global temperature increase of 3.7 to  4.8 °C above pre-industrial levels by 2100, contravening the agreement among 195 nations at the 2015 Paris climate summit to limit global warming to 2°C without actually specifying any “additional mitigating measures”.   UK Met Office, NASA, and NOAA data all confirm 2015 as the hottest year on record since systematic reporting began in 1850; a new world record is likely to be set in 2016.

According to AR5 (2013), unabated emissions by 2100 will eventually cause a 2.3m sea-level rise per 1°C of mean global temperature increase.   However AR5 is not the whole story.   Radar soundings of Antarctic glaciers have revealed troughs under the ice sheet that when inevitably flooded by relatively warm sea water will trigger major ice sheet collapses sufficient to raise global sea level by at least 10m.   An improved ice sheet model in 2016 predicts major ice sheet collapse over the next few decades in response to currently predicted levels of global warming.   During the Pliocene era 4 million years ago when the planet was 2-3°C warmer than today, sea level was 20m higher, attributed largely to collapse of the Antarctic ice sheet.

The Royal Society of New Zealand recently hosted a screening of “Thirty Million”, a documentary film about the devastating consequences of sea level rise for the low-lying nation of Bangladesh over the next few decades: refer www.thirtymillionfilm.org.   “Thirty Million” is the number of climate refugees predicted to be displaced by sea level rise by 2050 from Bangladesh’s current population of 160 million.   About 200 million climate refugees globally are predicted to be displaced by 2050: hundreds of times greater than the current influx of refugees into Europe driven by drought and ongoing conflict.

“We have enough knowledge to act, but it is the collective acting that is required now

…If we are not careful then we will be definitely suicidal if not evil, a word attributable

to those who have the power to act and have not used it.”

(Dr Atiq Rahman, Executive Director of the Bangladesh Centre for Advanced Studies, 2016)

New Zealand’s current population (4.5 million) is 0.061 percent of the global population (7,400 million).  Its annual refugee quota of 750 was recently increased to 1,000.   In my view, the revised quota should be increased to at least 0.061 percent of 200 million over the next three decades: i.e. 5,000 annually, especially from low-lying Pacific Island nations.   Even a five-fold increase does not fully compensate for New Zealand’s relatively large per capita contribution to climate disruption nor for its evil policy choices.

New Zealand’s response to climate disruption reflects poorly on the integrity of a Government that achieved pariah status including a “Fossil-of-the Day” award at the 2015 Paris climate summit.   Its commitment to an 11% reduction in carbon emissions by 2030 compared very unfavourably with the commitments of the European Union to a 40% reduction, the United States to 28%, and China to 20%.   Equally unacceptable, under current policy settings New Zealand’s net emissions are officially projected by the Ministry for the Environment to increase by 159% by 2030, not to reduce by 11% by 2030 as promised at Paris, nor to reduce by 50% by 2050 as promised by the “50-by-50” election slogan used shamelessly by National during its successful 2008 election campaign.   The National Government to date has not been held accountable for this broken election promise.

Unsurprisingly, New Zealand’s climate protection policies ranked fourth worst among 60+ countries according to a reputable Climate Change Performance Index (2015) and its Emissions Trading Scheme (ETS) ranked 25th of 26 countries according to a World Bank review (2014).   Accordingly, New Zealand’s ETS should be scrapped entirely in my view and replaced by:

–   a carbon budget that emphasises essential outcomes determined by robust science rather than by shonky carbon pricing inputs based on spurious and possibly fraudulent economics; and

–   an inescapable increasing carbon tax/charge applied at points of fossil carbon extraction, importation or emission and remitted in full to the public to compensate them for increasing fossil energy power bills.

Increasing homelessness is one of the inevitable consequence of a rampant neoliberal free market economy in my view.   In Bangladesh the immediate driver is sea level rise.   In New Zealand the immediate driver is property investment, often by speculators who are manifestly increasing their wealth through huge, tax-free capital gains.   The solutions to increasing homelessness, both locally and globally, in my view are for political decision-makers including the National Government to:

–   consider whether neoliberal free market economics is a fundamentally flawed ideology that may have evil consequences;

–   consider Professor Einstein’s warning about the existential threat posed by nuclear weapons that, in my view, is also applicable to climate disruption, overshoot and collapse, and increasing homelessness;

–   increase New Zealand’s annual refugee intake quota five-fold to at least 5,000 climate refugees annually;

–   accept Piketty’s rationale for taxing wealth rather than taxing income, and, having the power to act, use it;

–   enact appropriate tax regimes including a carbon tax/charge to address climate disruption and a capital gains tax to address increasing homelessness.