Capitalism and climate

Dr Rainer Zitelmann had a most interesting piece (£) in Monday’s Telegraph. He explores the connection between capitalism and the environment. He makes a point about Extinction Rebellion.

“One of this group’s central dogmas is that capitalism is to blame for climate change and environmental degradation – and that capitalism will ultimately lead to the extinction of humanity.”

But is it true? Dr Zitelmann examines the record, not from the point of view of theory, but from what has happened in capitalist and non-capitalist countries.

“The Heritage Foundation’s researchers compared the two indices, Yale University’s Environmental Performance Index and their own Index of Economic Freedom. They found that the countries with the highest levels of economic freedom – and thus the most capitalist countries – also had the highest EPI scores, averaging 69.8, while the “mostly free” countries averaged 66.8.”

“There is then a big gap to the “moderately free” countries, which were rated much lower (49.3 points) for their environmental performance. The “mostly unfree” and “repressed” countries, namely those that are least capitalist, registered by far the worst environmental performance (37.5 and 36.6 points in the EPI, respectively).”

What emerges is that the non-capitalist countries have a very much worse record of environmental degradation than do the capitalist ones. It is the reverse of what Extinction Rebellion and some other environmental campaigners tell us.

The Environmental Kuznets Curve is often used to describe the relationship between economic growth and environmental quality. It refers to the hypothesis of an inverted U-shaped relationship between economic output per capita and some measures of environmental quality. Developing countries are bad for the environment in the early stages, but as they become richer they can afford to produce more cleanly, and have the wealth to clean their rivers and the air in their cities. Dr Zitelmann draws the conclusion that emerges from the evidence.

“There is a very strong argument that, even in terms of climate change and environmental degradation, capitalism is not the problem, it’s the solution.”