Commanding heights of climate action: Only the public sector can save the world
Gulzar Natarajan and I wrote that nations may be ill-advised to rely on private capital for the investments they need to make to deal with climate change. However, Brett Christophers takes this argument further in his book, The Price is Wrong: Why Capitalism Won’t Save the Planet. He delves into why private capital, despite its potential, will not invest enough in renewable-energy generation capacity for the planet to achieve its goal of limiting temperature increase to 1.5° Celsius above pre-industrial levels.
First, Christophers marshals a lot of evidence to make his case, and second, he does not absolve the West of its historical responsibilities and its consequent current responsibility to support developing countries with technological, material and financial resources to combat climate change. For example, he cites Derek Browers of the Financial Times: “The Western nations that did so much of the damage will have to finance the transition in the developing world—it is astonishing that this idea is still debated (tinyurl.com/4yty6v52)." He does not blame developing economies, particularly India and China, for continuing to rely on fossil fuels for electricity generation. He also acknowledges the substantial investments these two countries make in renewable energy generation capacity.
He questions the belief that private capital will create adequate renewable energy capacity because private capital is rightly about profits. In another age, he says, private capital had turned to coal to power cotton production because it was profitable. Private capital would get invested if energy generated through renewable sources could be priced and sold profitably.
Otherwise, not. The record is not encouraging. Whenever state
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