by David Spratt, first published at Pearls&Irritations
“I will not sacrifice Great British industry to the drum-banging, finger-wagging Net Zero extremists,” was the headline The Sun in London gave to a piece last week by Prime Minister Sir Keir Starmer, defending the expenditure of 22 billion pounds on the cargo cult of carbon capture and storage. This headline captured the delusion at the core of climate-policymaking around the world: that there is an economically non-disruptive path out of the climate emergency. There isn’t.
Either we close down the fossil fuel industry long before its physical infrastructure is exhausted, strand a whole lot of capital and engage in a non-incremental restructuring of work and the economy; or we will have a world of social breakdown, conflict and economic chaos. This was the picture painted by US analysts 17 years ago in a study titled The Age of Consequences, which warned of the damage at 2.6°C of warming, a target we will likely exceed on present indications:
“Massive nonlinear events in the global environment give rise to massive nonlinear societal events… nations around the world will be overwhelmed by the scale of change and pernicious challenges. The internal cohesion of nations will be under great stress both as a result of a dramatic rise in migration and changes in agricultural patterns and water availability. The flooding of coastal communities around the world has the potential to challenge regional and even national identities. Armed conflict between nations over resources is likely and nuclear war is possible.”
And the lead author of that report? Kurt Campbell, now the US Deputy Secretary of State.
Political stability is significantly built on a fragile social compact in which the state delivers some measure of social and economic progress for the population, and the population tolerates the political process.
Failure to deliver — even on the basics such as food security — may result in large-scale political disruption, of which the Arab Spring of the early 2010s is just one example. In Syria, an epochal drought and a climate-driven spike in global wheat prices were factors that led to revolt, state failure and civil war.
Social compact failure can be seen around the world today because decades of neoliberalism have resulted in the vast transfer of wealth to the elites and stagnation or declines in living standards and real wages for most people, misnamed a “cost of living” crisis. Too often this has led to racist, populist and authoritarian responses and a growing disenchantment with a politics that is no longer seen as delivering for most of the people. Hence the rise of the Right in Europe, Trumpism, Javier Gerardo Milei in Argentina and so on, aided by the collapse of once social-democratic parties captured by neoliberalism and the fossil fuel industry.
Climate change has and will disrupt the social compact even harder by squeezing the fiscal capacity of the state to deliver on the basics. Economic disruption and dislocation will become the norm, in multifaceted ways, reducing GDP and state revenue and/or requiring ever greater expenditures to repair what a more extreme climate has destroyed or to prevent even greater damage.
- Crop yields will decline approximately 10% for each one degree in warming, undercutting the agriculture sector, which is the major economic component in the developing world; and by the 2040s, the probability of a 10% or greater yield loss in any one year within the top four maize producing countries — the US, China, Brazil and Argentina which currently account for 87% of the world’s maize exports — rises to between 40 and 70%;
- Climate-related health impacts — such as an increase in disease vectors — will undercut the economy, as Covid did when it paused global tourism and left many developing nations’ economies on the edge of a financial precipice, Fiji for example;
- Supply-chain disruption and direct destruction of productive capacity;
- The physical damage caused by extreme events, with much of the cost likely, one way or another, to be borne by the state: Hurricane Helene in the USA in September 2024 caused damage estimated at $US160 billion — note billion, not million!
- The need for the state to step in and/or underwrite services when the market fails or withdraws: property insurance in a world of more climate extremes is one example;
- Spiralling adaptation costs, such as the need to relocate or rebuild transport, communications and energy infrastructure, and to facilitate the retreat from coastal areas and regions of unbearable heat;
- Lower labour productivity, which declines sharply when temperatures exceed 35°C;
- The costs of internal people displacement and relocation: internal displacement is generally from the country to urban areas, which drives up housing and other costs and may lead to social unrest.
All these factors will weaken the state’s capacity as more and more state revenue is diverted away from social and service delivery into climate responses. This will further reduce the standard of living and fuel economic grievances, social unrest and right-wing populism.
At some point, these economic pressures will also lead to state financial insolvency and/or collapse; and perhaps also to major dislocations in the global financial system.
Climate vulnerability will increase state sovereign risk and the cost of capital, reducing the capacity to access the resources to fight climate disruption. The greater the climate impact costs, the more likely is the collapse of the social compact, with consequences including further economic disruption and a growing incapacity of the state to finance increasingly large climate mitigation and adaptation budgets. That failure will in itself worsen future climate impacts, in a climate–economy–disruption feedback loop.
Climate impacts, especially in the dry subtropics, have already been a driver of social conflict, insurgency and war, including across the Sahel and in the Middle East.
Growing authoritarianism and the likely plunge towards militarism and war will further decrease the capacity of states around the world to deliver on the basics because:
- More and more state resources will likely be devoted to the defence and security apparatus;
- Climate impacts will directly increase the cost of military operations, for example in increasingly hostile and expensive environments;
- Climate change will require large-scale defence infrastructure spending, for example to adapt to rising sea-levels;
- Climate disruption will require greater resources for humanitarian assistance and disaster relief: a duty which is increasingly falling on the security, emergency and defence forces;
- International conflict over resources such as water — in the Himalayas or the Nile, for example — will draw in more state security resources;
- Climate change will likely lead to ethnic conflict, boost religious extremism and drive social unrest, with a likely militarised state security response.
This may also be a feedback loop where the increasing securitisation of climate consequences will have an adverse effect on the capacity of the state to maintain a coherent community with adequate delivery of basic services.
At the level of warming the world is presently heading towards — 2.5 to 3°C — economic disruption and crisis will be endemic. “2.7°C is without any doubt a disaster. It’s a point we haven’t seen for the past 5 million years. There’s no evidence that we can support humanity as we know it on a 2.7°C planet,” says Prof. Johan Rockström, Director of the Potsdam Institute for Climate Impact Research.
US President Joe Biden disagrees. On 1 September he tweeted: “On my watch, we’ve responsibly increased our oil production to meet our immediate needs – without delaying or deferring our transition to clean energy. We’re America. We can do both” (emphasis added).
Sounds like our Prime Minister, too.
