El Niño has arrived — and it will likely be the hottest in human history. It may already have made its presence felt in the April-May heat wave in Asia. The current heat waves in Mexico and the U.S. bear its imprint too.
In El Niño years, warmer seas in the equatorial Pacific raise global temperatures. The upcoming El Niño years will probably breach the 1.5 degrees Celsius global warming limit outlined by the Intergovernmental Panel on Climate Change, bringing renewed flurries of weather-related disasters, including floods, drought and wildfires.
Less immediately visible will be its economic effects: El Niño is set to aggravate the failure of the prevailing growth-based economic model, with calamitous results for the world’s poor.
A recent paper published in the journal Science by Earth system scientists Justin Mankin and Christopher Callahan studies the growth-suppressing effects of El Niño events.
These are far from trivial. The 2003 El Niño lowered the GDP of some countries, including Indonesia and Peru, by over 10 percent.
The 2010 El Niño brought heat waves to much of the northern hemisphere, contributing to upward pressure on the prices of wheat and other staples, which, when supercharged by speculators, sent prices soaring — and in the wheat-importing countries of North Africa and the Middle East this was a contributing factor to the 2010-12 revolutions.
As for the current El Niño, income losses associated with it could hit $3 trillion by 2029, with growth potential in many tropical countries weakened well into the 2030s.
The U.S., too, will suffer significant damage. “When we talk about an El Niño here in the United States,” said Mankin, the floods and landslides “aren’t typically insured against by most households and businesses.”
In California, 98 per cent of homeowners have no flood insurance, and the big insurance firms are increasingly refusing to offer home coverage to new applicants. This, in turn, makes mortgages harder to obtain, and suppresses house values.
Climatological events impact lives and livelihoods. El Niño is one pulse within the larger and long-predicted process whereby global heating undermines GDP growth and drives inflation up.
Several causal factors are at play, including labor conditions (e.g. workers under heat stress slow down) and costs of adaptation (e.g. installing air conditioning).
Another is infrastructural damage from storms, floods, and the like. In 2022, major rivers in Europe became so warm that nuclear power production had to be dialed down; others dried up such that river traffic was grounded.
Vital sectors of the global economy, such as semiconductors, are affected too. In China, chip factories were shut down due to power rationing brought on by a record heat wave, while across the Taiwan Strait, drought was jeopardising chip production.
A further factor is food prices. While temperature and rainfall changes are bringing higher crop yields to some regions north of the 50th parallel, elsewhere the effects are overwhelmingly negative.
Extreme weather is creating unpredictable shortages of produce, as seen in Europe’s salad vegetable crisis of early 2023. These events are early glimpses of what it means to move from the hospitable Holocene to the Anthropocene — a shift toward a climate hotter and more volatile than anything since the invention of agriculture.
The current model of industrial monocrop agriculture is ill-equipped to deal with such variability; it lacks resilience.
(c) Gareth Dale, based on World Bank data.
Climate change is a brake on GDP growth, but by no means the only one. Since the mid-1970s, per capita global growth has faced headwinds. The shift from manufacturing to services has slowed productivity growth, the ratio of workers to retirees is almost universally falling, and the circuitous boost from Cold War arms expenditure has lessened.
Profit rates have been subdued, and although in some sectors margins are currently high, this is due to contingent factors: quantitative easing and the recent “greedflation” based on price gouging and wage suppression.
Although the wallets of many asset holders are bulging, investment levels are in the doldrums and the International Monetary Fund’s latest world economic outlook is predicting weak growth for years to come.
None of the breathless predictions of the last 20 years have been borne out, whether of a great surge of technological development or sustained “long wave” upturns in profitability (which some economists forecast would begin in the late 2010s). Skepticism toward predictions of a growth renaissance, driven by AI or for any other reason, is in order.
But could this low-growth regime in fact be a boon for the environment? Geographer Danny Dorling believes so. “Human beings are learning to consume and produce less,” he proposes.
Low GDP growth together with decelerating growth rates of population and consumption of goods (by weight) and greenhouse gas emissions are all signs of a general “slowdown” of the human hive. The new societal tempo could enable us to focus more effectively on tackling climate chaos.
A closer look at the data on greenhouse gases, however, suggests that Dorling’s readings are rose-tinted. The first graph shows annual figures for the increase in atmospheric CO2 and — as horizontal lines — the decadal averages.
The last three years have indeed seen below-trend growth rates but this likely has more to do with vegetal carbon uptake under the recent La Niña than decelerating anthropogenic emissions. The data for the other main greenhouse gases, methane and nitrous oxide, is just as eye-catching.
Bear in mind, these charts show the rate of acceleration. If a bar is lower than its predecessor, the atmospheric volume of the gas is still growing — unless it falls beneath the x-axis, as with methane in 2004.
Subdued growth rates do not necessarily equate to a gentler environmental footprint. Growth rates today are lower than in, say, the 1960s, but in absolute terms GDP is vastly higher — and with it, the capacity to fly and drive and pour concrete. In just two years, 2020-21, China consumed more cement than the U.S. — freeways, airports, ‘burbs and all — did over the entire 20th century.
This is one instance of a global trend: Material throughput is not falling but rising, at least in most categories. Its pace accelerated in the late 20th century despite the slowing of global population growth.
And the population growth slowdown will not in itself lessen pressure on the environment either. Humans’ impact upon their environment comes not from their numbers but their enrollment into energy-guzzling and land-appropriating practices — through eating beef, flying planes, making war, playing golf, and so on.
Gluttonous consumption by the world’s richest strata weighs heavily on nature and is showing no sign of “slowdown.”
The alternative reading of the environmental effects of low growth is pessimistic. The colossal investment programs on which “green growth” is built will be harder to finance in a low-growth era.
As a recent paper by Jack Copley in the journal Competition & Change puts it, a “perverse dynamic” is at work.
Low growth erodes corporate commitments to invest in energy efficiency and decarbonization. Governments may take the lead, but their tax revenues depend on successful capital accumulation which, in turn, feeds social polarization and insatiable consumption by the ultrarich.
Lawmakers attempt to square the circle by promoting “green” and “brown” growth — gigafactories and oil drilling, as in the U.S. Inflation Reduction Act. In a low-growth context, moreover, distributional conflicts over the gains and losses from climate mitigation and adaptation programs are fiercer than when treasuries are overflowing.
The way to cut the gordian knot would seem to be for states to respond to the climate challenge in the way that they confront military threats: That is, to subordinate the profit motive to political goals.
During World War II, the U.S. and other governments didn’t wait for market signals but raised new industries out of the ground.
They imposed price and rent controls and rationing of consumer goods. Uncle Sam directed firms to retool plants to produce warplanes and other matériel. In these short years, with “politics in charge,” a war was won, economic growth restored and the Great Depression overcome.
But the analogy with the U.S. wartime economy is unsatisfactory. For the corporate sector, the taxation of excessive profits may have hurt a little, but 1941 through 1945 brought rapid growth and risk-free guaranteed profits, plus a gamble — successfully achieved — on victory bringing greatly expanded global market access.
The war against climate change is different in every sense. Above all, it is a civil war. It requires a struggle against an entire corporate sector, fossil fuels — and indeed, against the rich.
This latter point is brought home forcefully in the latest Climate Inequality Report by the World Inequality Lab. Its researchers find that while “carbon inequality” between the Global North and South remains a chasm, carbon inequality within countries is increasingly salient — indeed, it now constitutes the greater part of global emissions inequality.
The richest 10 percent of people in South Asia, by some measures, are now responsible for a higher level of emissions than the “middle 40%” bracket in Europe (i.e. those from the second to the fifth decile inclusive) and for much higher emissions than Europe’s bottom 50 percent.
In climate-political lore, a familiar figure is the “boiling frog.” When pushed into a pot of boiling water, a frog immediately senses mortal peril and jumps out. The apocryphal frog immersed in gradually heating water, however, will fail to notice. She initially basks in the warmth, then becomes confused and, finally, expires.
The allegory purports to explain why humans can seem so passive in face of major — and even species-existential — threats. Bad though the disasters of the coming El Niño years may be, most of us will experience them as only a slight aggravation of comparable past events — and haven’t we survived all of those just fine? We’ll either fail to notice or become confused.
But the allegory is misconstrued and misleading. It obscures the real reason why the frog is unable to escape. The inconvenient truth is that directly seated upon her is a rather portly toad. Following its own short-term interests in maintaining its position (“social order”), alongside its personal comfort and survival, it sits upon the frog while — if we may stretch the allegory to the limit — its front foot reaches up to keep the gas dial on.
In plain English, the threads connecting the climate threat to social inequality are not just about apportioning blame: that the rich and the Global North are overwhelmingly responsible for the environmental crisis and have benefited materially in the course of its creation.
Rather, it is that it is through revolt against oppression — in all its manifestations — that “frogs” develop the capacities of political understanding and collective action. Challenging the oppressive weight bearing down on them is the route toward shutting off the gas.
Radical prognoses of this sort depend on the widening recognition that climate change is not external to everyday life. Such a perception comes not so much through education as through popular empowerment and social struggle. In early-1970s America, for example, the “red” and the “green” could find a common tongue.
Even the Automobile Workers’ leader Walter Reuther could declare that “the environmental crisis has reached such catastrophic proportions that the labor movement is now obligated to raise this question at the bargaining table in any industry that is in a measurable way contributing to man’s deteriorating living environment.”
Today, as the hot breath of El Niño sears Mexico and parts of the U.S., that message is all the more universal: It applies increasingly to the “kitchen table” as much as the bargaining table, to the spheres of work and social reproduction alike.
This Author
Gareth Dale is reader in political economy at Brunel University. He co-edited Green Growth: Ideology, Political Economy and the Alternatives. He researches economic growth and degrowth, climate politics, and technology fetishism.
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