Can Climate Change be Reversed under Capitalism?


  • Anil Markandya

    1. is Professor of Economics at the University of Bath and Ikerbasque Research Professor at the Basque Centre for Climate Change (BC3) in Bilbao, Spain. His mailing address is: Department of Economics and International Development, University of Bath, BA2 7AY, UK; e-mail:
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  • I wish to thank Servaas Storm and the editors of the journal for useful comments that have improved the final version. I also thank Tim Taylor and Alistair Hunt for reading and making suggestions on an earlier draft. All shortcomings are of course my own.


This contribution seeks to examine the prospects for tackling climate change in a world dominated by capitalist economies. Since climate change is a relatively new phenomenon, we have to review the successes and failures of such economies in addressing other environmental issues. This review reveals a mixed picture, but the evidence suggests that once an issue is raised in the public consciousness the prospects for effective action are quite good as long as there is openness and transparency. Experience certainly indicates that the prospects are better in capitalist than in centrally planned economies. In the case of climate change the magnitude of the changes needed is immense and time is now running out. Studies indicate that convergence in living standards between the North and the South through development is possible with strict carbon targets, but it will need agreement on the allocation of rights and, furthermore, a system in which either such rights are traded or a common carbon tax is imposed. Such a system must be seen as fair by all parties and these parties must trust each other and the institutions they set up. That is where the biggest problems still lie.