This Changes Everything

“How Free Market Fundamentalism Helped Overheat the Planet” (Pages 64-69)

Klein discusses international trade law and how in recent years, she has noted several examples of green-energy programs being challenged under World Trade Organization (WTO) rules. She cites several examples of nations challenging and counter-challenging each other’s green programs as forms of protectionism, which is illegal under free-trade rules.

Klein shares the case of Silfab, an Italian solar panel manufacturing firm that set up a factory in Ontario, Canada, in 2010. By 2014, it was on the brink of closure. It was the ambitious 2009 Green Energy and Green Economy Act in Canada that had drawn the company to Ontario. The act set up measures to significantly cut Canada’s coal dependency and support renewable energy providers by giving them a sustainable local market to sell their energy into, so long as they sourced 40-60% of their workforce and materials locally. It won international acclaim and was dubbed “the most comprehensive renewable energy policy entered anywhere around the world” (67).

The program was doing very well up until 2014 when Japan and the EU challenged its “buy-local” provisions under WTO laws, and the WTO ruled against it. Without this part of the agreement market, confidence was lost, and foreign investors pulled out of Silfab's Canadian operation, leaving closure imminent.

“Trade Trumps Climate” (Pages 69-73)

The attack on the Ontario program is an outrage from a climate perspective because it targets precisely the kind of policies required to make any difference to climate change. From a legal standpoint, Klein observes, Japan and the EU were well within their rights. She calls it an example of “trade trumping the planet itself” (69).

Key to all free trade agreements is something called “national treatment,” a commitment to not giving preferential treatment to local industry. The idea behind this is to create an even playing field for international trade. Against this, Klein points out there is no free market in energy because the large fossil fuel companies that dominate the sector receive vast government subsidies and don’t have to pay for “treating our shared atmosphere as a free waste dump” (70). The WTO has done nothing to make fossil fuel companies pay for the damage they are doing and will do to our climate.

For green energy to stand a chance, governments need to step in and provide price guarantees and subsidies to give the still-developing industry a chance to compete with the fossil fuel giants. However, WTO laws and other international trade agreements make this incredibly difficult. Klein points to Denmark’s successful green-energy model, which was rolled out in the 1980s. It was only possible because of generous government subsidies, subsidies that would now be illegal under international trade law.

Governments that try to establish programs like this or the one in Ontario end up in trade court. At the same time as subsidizing green industries has been made much harder, international trade law also makes it harder to penalize or regulate “dirty,” high-carbon fossil fuels that take a greater toll on the environment. Klein points out the absurdity that countries that are, in principle, committed to lowering emissions are busy engaging in legal action to undermine each other’s efforts at developing renewable energy sources.

These challenges aren’t killing renewable energy, Klein says, but they are significantly impeding its development when time is of the essence. She concludes that international trade laws need to be amended and challenged to permit the actions required to deal with climate change: “To allow arcane trade law, which has been negotiated with scant public scrutiny to have this kind of power over an issue so critical to humanity’s future is a special kind of madness” (72).

Klein extends the argument to the other key pillars of neoliberalism: privatization of public assets, deregulation of the corporate sector, and lowering income and corporate taxes through cuts in public spending. All these things impede the ability to respond effectively to climate change; they prevent governments from making the necessary investments in low-carbon infrastructure and leave energy provision in the hands of private companies: “Together the pillars of neoliberalism form an ideological wall that has blocked a serious response to climate changes for decades” (73).

“A Wall Comes Down, Emissions Go Up” (Pages 73-75)

Klein looks at some key moments in the history of climate change. There had been scientific leaps in understanding global warming in the 1950s, but the issue swept into American public consciousness in 1988 with the speech by James Hansen (Director of NASA’s Institute for Space Studies) before Congress on the profound danger global warming presented to our planet.

The first world conference on Climate Change in Toronto occurred that same year, and the first UN panel on climate change was established. The Times ran a famous article, in which the “endangered planet” replaced the usual “man of the year” feature (74), and the article sent out a rallying cry for a change of perspective and responsible, global action.

Klein presents 1988 as a crossroads moment when a path seemed to be opening to something new: perhaps “co-operation would triumph over domination” (75). It was pointed out in climate summits that the developed Western world and its high-consumption lifestyles would have to change.

1989, however, saw the collapse of the Soviet Union, the fall of the Berlin Wall, and “right wing ideologues in Washington seized on this moment of global flux to crush all political competition, whether socialism, Keynesianism, or deep ecology” (75). They reasserted the power of deregulated capitalism as the only alternative. Since then, the vision of a multilateral solution to climate change has disappeared alongside the rise of climate-change denial and an expansion of materialistic consumer lifestyles across the globe.

“Trade and Climate: Two Solitudes” (Pages 75-80)

Klein charts the relationship between climate and trade agreements as they developed in parallel through the ’90s up to the present. She calls them “two solitudes,” noting how they developed in isolation from each other with no attempt made to consider how one would affect the other. In effect, climate agreements like the Kyoto Protocol and international trading laws stood opposed to each other, and there was always a clear order of priority. Climate change agreements involved weak, often non-binding targets with little real penalty, while “commitments made under trade agreements were enforced by a dispute settlement system with real teeth and harsh penalties” (77).

In the words of Robyn Eckersley, an Australian political scientist, the major powers “ensured that liberalized trade and an expanding global economy have been protected against trade restrictive climate policies” (77). What the climate agreements set out to achieve, the parallel trade agreements made much harder in practice as they reached agreements that sent emissions soaring and made many forms of climate-based intervention illegal. Klein also quotes Steven Shrybman, who points out that the global export of industrial agriculture has already dealt a devastating blow to any possible progress on emissions.

Klein also points out that the way emissions were measured was flawed. Measurements only accounted for omissions in the country of production, not for the transportation of goods or the use of goods in the countries where they were sold. This has allowed deindustrializing wealthy nations that bring in industrial and consumer goods from abroad to present themselves as cutting emissions: “This deeply flawed system has created a massively distorted picture of the drives of global emission” (79). It has disguised the fact that emissions embedded in the consumer-based lifestyles of the West have soared. Major country’s emission figures had only stopped growing because international trade had allowed these countries to move their dirty production overseas.

“Cheap Labour, Dirty Energy: A Package Deal” (Pages 80-83)

The growth of emissions has soared. Before the 1990s, it was slowing, and in the 1960s, it was down to about 1% of growth a year. However, between 2000 and 2008, the growth rate reached 3.4% and rose to 5.9% in 2010. Klein explains a key reason for this growth: the quick industrial expansion of China. In 2007, China accounted for two-thirds of the annual increase in emissions, and a significant portion of this was linked to production for foreign trade.

For Klein, the real fault lies with the economic model of globalization that’s been adopted around the world. This model of “fast and dirty export led development” (81) was aggressively promoted by the Western powers and the WTO, enshrined in trade deals, and backed up by the economic incentives of the World Bank. At the heart of this model, multinational corporations are given the freedom to seek “the cheapest and most exploitable labour force” (81) around the globe, which led to many corporations setting up factories in China. With China’s low wages, poor labor rights, and willingness to invest money in industrial infrastructure, it was the perfect choice. China became “a free trader’s dream and a climate nightmare” (81).

Klein notes the correlation between low wages and high emissions, and explains this as another consequence of neoliberal economics: profit is put before social and moral considerations. In the past, workers or communities might push back against low wages or the effects of pollution, but in the era of the global free market, companies have the freedom to move whenever this struggle gains traction.

This economic model, Klein points out, is a Western invention imported into developing countries, and these Western nations benefit from cheap labor and goods. It conveniently allows Western countries to point the finger at the “fast developing economies” like China and India and say their emissions are the real problem. An argument is made as if Westerners are mere spectators, “as if it was not our government and our multinationals that pushed a model of export led development that made all of this possible” (82).

“A Movement Digs Its Own Grave” (Pages 83-86)

Klein argues the planet could have avoided this path. She looks back to a key moment: the signing of the North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico in 1993, which led to the formation of the WTO and the consequences discussed above.

There was significant resistance against NAFTA from environmentalists and labor groups, who saw the threat it posed to workers and the environment by putting free trade, profit, and economic growth above all else. However, in 1993, several of the mainstream green groups, including the World Wildlife Fund (WWF), got behind it. With their backing, Bill Clinton was able to get it ratified. Because of this, the mainstream environmental movement has been slow to point out the disastrous climate implications of these kinds of free-trade deals.

Klein points out that had the green movement put up more resistance, NAFTA might have been renegotiated along different lines: “Trade access to developing countries could have been tied to transfers of resources and green technology so that critical new infrastructure was low carbon from the outset” (85). She argues that economic relations and trade agreements now urgently need to be rethought. People need to challenge the basic logic of these agreements, which has hampered the ability to fight climate change thus far. Klein quotes Ilana Solomon: “In order to combat climate change there’s a real need to start localising our economies again” (86). This means moving away from the model of endless consumption of disposable goods, rationing the carbon-intensive, long-haul transportation of goods and resources, and supporting the development of local green industries.

This would benefit workers, local and small-scale farmers, smaller businesses, and communities that have seen local businesses replaced by large chains and big businesses. They would all have to get involved in the struggle for change.

“From Frenetic Expansion to Steady States” (Pages 86-93)

Klein argues that people need to challenge not only the orthodoxy of free trade but something more fundamental to capitalism: “the logic of indiscriminate economic growth” (86). This is something moderate and liberal environmentalists are reluctant to accept. The only time people have previously seen anything like the reduction in emissions required to combat climate change has been in years of recession and economic crisis.

Klein focuses on the work of Kevin Anderson from the Tyndall Centre for Climate Change Research. Anderson is an eminent British climate expert. He has laid out a rigorous road map for cutting emissions to get below a 2-degree global temperature rise by the end of the century. Due to years of stalling and increases in emissions, his recent work has shown that drastic and immediate cuts are required, cuts so drastic that they challenge “the expansionist logic at the heart of our economic system” (87).

Wealthy countries need to cut emissions by something like 8-10% a year as of now; this can only be achieved through “radical and immediate degrowth strategies” (88), and the only way to do this is to challenge the current economic model. Anderson says he finds that scientists and politicians agree with the science behind his conclusions but fall into defeatism at the thought of changing the system, “as if changing the Earth’s climate in ways that will be chaotic and disastrous is easier to accept than the prospect of changing the fundamental growth based profit seeking logic of capitalism” (89).

Klein argues that green tech and modest changes in consumption left to individual consumers won’t cut it. Society already has the green tech that can make a real difference, but it requires a vast infrastructure built from the ground up to harness it. This would take years and huge investments, and it could only be built using fossil fuels.

While this infrastructure must be built, society can’t do it quickly enough to circumvent disaster. People don’t just need to consume energy differently; they also need to consume less. The Earth needs “deep emission cuts in the wealthy nations to start immediately” (90) and “comprehensive policies and programs that make low carbon choices easy and convenient for everyone” (91), especially the poorest.

Klein describes some of these policies: cheap public transport; affordable, energy-efficient housing along train lines; incentives for local green farming; and land management that integrates housing, key facilities, and public transport. Moreover, in Western countries, people would need to bring consumption levels down to something like 1970s levels to give developing countries some breathing room. This means the developed countries, especially their wealthier classes, taking on more of the burden.

Anderson states, “it is a matter of the well off 20% of the population taking the largest cuts” (91). Anderson and Klein both stress the social benefits that come with this: a fairer distribution of power and wealth, a healthier society with high-quality public services, and rejuvenated local communities and economies.

What’s required is a “mental re-ordering of the component parts of GDP” (92) to focus not on consumption and trade but on public and private investment in infrastructure. Implicit in this is “a great deal more redistribution” (92).

“Growing the Caring Economy, Shrinking the Careless One” (Pages 93-95)

Klein discusses ways people could reduce consumption and emission levels to improve quality of life, something referred to as “selective de-growth.” She references several ideas, including luxury taxes on wasteful consumption and how that revenue could be directed to support low-carbon parts of the economy. Jobs would be created in the green and public sectors and the non-profit sector would expand, as they have low ecological impact. Together, these things would require long-term planning, large-scale public spending, tough regulation, and higher taxation on corporations and the wealthiest section of society.

She also discusses a shortened working week: a three- or four-day workweek would lower production, consumption, and emissions. Linked to this would be introducing a universal basic income (UBI) for every person, which would provide security for people in contracting sectors of the economy. Providing this basic security net, she argues, is preferable to driving people into poorly paid jobs in high-consumption industries for the sake of growth. She argues for a safety net to make sure everyone has the basics covered: “health care, education, food and clean water” (94), and she links the battle against climate change with the battle against social inequality.

Klein admits that “these policies are also the most politically challenging” as “the measures we must take to secure a just, equitable, and inspiring transition away from fossil fuels clash directly with our reigning economic orthodoxy at every level” (94).