Green capitalism, also referred to as eco-capitalism, is a strategy for managing the interplay between economic activities and the environment that assumes a high level of harmony between economic expansion and environmental conservation. The fundamental concept is that wealth is derived from nature as "natural capital" (ecosystems that provide ecological benefits) upon which all prosperity relies. Consequently, governments are encouraged to implement market-oriented policy tools (such as a carbon tax) to tackle environmental challenges.
Moreover, green capitalism has emerged as a reaction to the increasing recognition of environmental concerns and the perceived necessity to address them within the framework of capitalism. It is grounded on the notion that technological advancements, environmentally friendly consumption, and market-driven approaches can pave the way for a more sustainable economy.
Despite its aim to confront environmental issues, green capitalism can give rise to "unjust sustainabilities". The reduction of material usage in certain nations is often accompanied by heightened material extraction and environmental harm in others. This can curtail the actual progress towards environmental sustainability while exacerbating social disparities.
As competitive advantage becomes deterritorialized and increasingly influenced by global value chain dynamics, including those related to sustainability management, new beneficiaries and losers emerge within and across countries. Green capitalism may produce new beneficiaries (the 'global middle class', predominantly situated in China and other emerging Asian nations) and new losers (the lower-middle class in wealthier countries and the impoverished in less affluent nations). Hence, deliberations on the sustainability of capitalist production must consider power dynamics, inequality, and social, environmental, and climate justice.
However, concerns about sustainability, such as the preservation of wildlife, have been turned into commodities that can be bought and sold, often being turned into a 'show' for the enjoyment of the wealthy. Green capitalism is closely linked to the exploitation of land and marine resources through green and/or blue 'grabbing'. This represents a modern form of accumulation through dispossession.
Despite green capitalism's emphasis on utilizing new technologies and business models to enhance resource and production efficiencies, the ongoing growth in production and consumption means that these efforts are insufficient in addressing global challenges like climate change. The focus on consuming differently rather than consuming less is a constraint of green capitalism.
Green capitalism, despite its environmental aims, has the potential to perpetuate "unjust sustainabilities" and worsen social inequalities. The shift towards dematerialization of production in certain countries may result in increased material extraction and environmental degradation in others, ultimately limiting the actual impact on environmental sustainability and exacerbating social disparities between nations.
Moreover, the pursuit of green capitalism can lead to the creation of new winners and losers, as competitive advantage becomes denationalized and influenced by global value chain dynamics. This can result in the emergence of new winners, such as the 'global middle class' primarily located in China and other emerging Asian countries, as well as new losers, including the lower-middle class in wealthier nations and the impoverished in poorer countries.
Market-based solutions within green capitalism, such as sustainable finance and carbon markets, are often ineffective in delivering on their promises. Many ESG funds closely resemble traditional investment portfolios, and carbon pricing schemes have not effectively reduced emissions.
To tackle the unequal distribution of benefits and burdens within green capitalism, various policy interventions are necessary. They are implementing stringent environmental regulations and ensuring effective monitoring and enforcement, particularly in supplier jurisdictions with inadequate regulatory oversight. Preventing the exploitation of land and marine resources through 'green grabbing' by enhancing property rights and community control over natural resources.
Encouraging lead firms in global value chains to adopt fairer sourcing practices that do not impose excessive environmental and social burdens on suppliers. Supporting suppliers in developing countries to enhance their capabilities and increase their share of value, rather than engaging in a race to the bottom on costs.
Introducing a carbon tax and utilizing the revenue to finance social protection measures and green investments that benefit lower-income groups. Implementing wealth taxes, inheritance taxes, and other progressive fiscal policies to reduce inequality and finance fair green transitions.
Furthermore, investing in green skills training and job creation programs aimed at marginalized communities to ensure they can take advantage of the green economy. Supporting the transition of workers in carbon-intensive industries to new green jobs through retraining, income support, and community development.
Shifting the focus from green consumption to reducing overall consumption levels, particularly among high-income groups. Incentivizing a shift away from a growth-oriented economic model towards one that prioritizes environmental sustainability and human wellbeing over profit maximization.
In conclusion, green capitalism, while aiming to balance environmental concerns with capitalism, often leads to unfair socio-economic outcomes. To address this, policies such as stricter environmental regulations, equitable global value chains, progressive taxation, green job creation, reduced consumption, and global cooperation are necessary. Despite its intentions, green capitalism fails to adequately address the root issue of economic growth. A more equitable approach is needed to effectively tackle environmental and social challenges.
