The Price is Wrong: Why Capitalism Won't Save the Planet

The global economy is moving too slowly toward sustainability because the return on green investment is too low. To overcome this, we need to take energy out of the private sector's hands and provide surrogate green profits through subsidies. This is an essential intervention that is politically far-reaching and factually illuminating.

Format: Hardback
Length: 432 pages
Publication date: 27 February 2024
Publisher: Verso Books

What if our understanding of capitalism and climate is back to front? What if the problem is not that transitioning to renewables is too expensive, but that saving the planet is not sufficiently profitable? This is Brett Christophers' claim. The global economy is moving too slowly toward sustainability because the return on green investment is too low. Today's consensus is that the key to curbing climate change is to produce green electricity and electrify everything possible. The main economic barrier in that project has seemingly been removed. But while prices of solar and wind power have tumbled, the golden era of renewables has yet to materialize. The problem is that investment is driven by profit, not price, and operating solar and wind farms remains a marginal business, dependent everywhere on the state's financial support. We cannot expect markets and the private sector to solve the climate crisis while the profits that are their lifeblood remain unappetizing. But there is an alternative to providing surrogate green profits through subsidies: to take energy out of the private sector's hands. An essential intervention, "The Price Is Wrong" is as politically far-reaching as it is factually illuminating.

Introduction:
In the face of the urgent need to address climate change, our understanding of capitalism and climate may be misaligned. The global economy is moving too slowly toward sustainability due to the low return on green investment. While the consensus is that producing green electricity and electrifying everything is the key to curbing climate change, the reality is that the profits associated with these initiatives remain unappetizing to the private sector. This essay explores the issue of why investment in renewables is not thriving and proposes an alternative solution: taking energy out of the private sector's hands.

The Problem with Capitalism and Climate:
The current economic system is driven by profit, not price. As a result, investment decisions are often made based on the potential financial returns rather than the environmental or social benefits. This has led to a lack of interest in renewable energy projects, as they often require significant upfront costs and have long payback periods. Additionally, the operating costs of solar and wind farms are relatively high, making them dependent on government subsidies to remain profitable.

The Golden Era of Renewables:
Despite the barriers to investment in renewables, there has been a significant decline in the prices of solar and wind power. This has led to a sense of optimism that the golden era of renewables is upon us. However, the reality is that while the prices of these technologies have fallen, the profits associated with them remain marginal. Solar and wind farms are still dependent on government support to remain profitable, and without this support, they are unlikely to be developed or expanded.

The Alternative to Subsidies:
To address the issue of why investment in renewables is not thriving, we need to consider taking energy out of the private sector's hands. One potential solution is to implement a carbon tax or cap-and-trade system that puts a price on carbon emissions. This would create a market for carbon credits, which could be bought and sold by companies to offset their emissions. By doing so, companies would be incentivized to invest in renewable energy projects, as they would be able to sell their excess carbon credits to other companies that are unable to reduce their emissions.

Conclusion:
In conclusion, our understanding of capitalism and climate may be back to front. The problem is not that transitioning to renewables is too expensive, but that saving the planet is not sufficiently profitable. By taking energy out of the private sector's hands and implementing a carbon tax or cap-and-trade system, we can create a market for carbon credits that incentivize companies to invest in renewable energy projects. This will help to accelerate the transition to a sustainable economy and mitigate the impacts of climate change.

Weight: 604g
Dimension: 241 x 165 x 32 (mm)
ISBN-13: 9781804292303