Capitalism and Climate Change: Can the Invisible Hand Adjust the Natural Thermostat?


  • Servaas Storm

    1. works on globalization, economic development, structuralist macroeconomics and climate change, and is associated with the Department of Economics, Faculty TBM, Delft University of Technology, Jaffalaan 5, 2628 BX Delft, The Netherlands; e-mail:
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Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To say that for destruction ice
Is also great
And would suffice.

(Robert Frost, ‘Fire and Ice’,
New Hampshire 1923)


Can climate change be stopped while fossil fuel capitalism remains the dominant system? What has to be done and what has to change to avoid the worst-case consequences of global warming? These questions are debated in the six contributions which follow. This introduction to the debate sets the stage and puts the often widely diverging views in context, distinguishing two axes of debate. The first axis (‘market vs. regulation’) measures faith in the invisible hand to adjust the natural thermostat. The second axis expresses differences in views on the efficiency and equity implications of climate action. While the contributions do differ along these axes, most authors agree that capitalism's institutions need to be drastically reformed and made fundamentally more equitable. This means a much broader agenda for the climate movement (going beyond carbon trading and technocratic discussion of mitigation options). What is needed for climate stability is a systemic transformation based on growth scepticism, a planned transition to a non-fossil fuel economy, democratic reform, climate justice, and changed global knowledge and corporate and financial power structures.