Friday , June 21 2024

Capitalism and the Environment

With the rise of Extinction Rebellion and other climate alarmist groups that have made militant demands in the name of protecting the environment, there has been a massive call for government action with demands to raise taxes and increase government spending.

Furthermore, there has been a call to cut the individual out of the conversation. You often hear leftist eco-warriors exclaim, “it’s not going to make a difference individually, it’s those awful big companies that are to blame for the problem!”

As with many political issues, this shifts any responsibility away from the individual and onto the state. To an extent, I agree. I’m against state subsidies and lobbying. However, this isn’t a problem with capitalism… It’s a problem with the state (as usual).

The Problem With State Action Against Climate Change

The problem with state action against climate change is that it is not only often unproductive to the climate change movement but it is coercive to the individual. No government policy is beneficial for everyone. With restrictions, there will always be victims.

While banning plastic straws may help stop pollution, it hurts those with disabilities who cannot use paper straws. A push for the government to tax private vehicles to encourage greener alternatives may hurt women who feel safer in their own car than on a bus late at night. Adding tariffs on trade to reduce the country’s green footprint negatively impacts the developing countries who are being restricted from free trade.

Oftentimes, policies on climate change and the environment may seem like a win at surface level but realistically, the secondary effects may be detrimental.

The state shouldn’t determine the price of the environment. If a woman is fine taking public transport or a disabled person is fine with using a metal straw, that should be their choice – not the state’z.

They say capitalism is a “win-lose” game. However, at least with capitalism you can play the game. With regulations, subsidies and nationalisation, the game is unplayable.

If it’s popular, it shouldn’t be a problem.

Democracy goes off the idea that if the majority of people agree, it should be accepted as a part of government. It requires popularity.

Many people are aware that climate change is an issue and would vote for green policies. Even with the Conservatives, the “right wing” party of the UK, there was a lot of talk about protecting the environment and achieving “net zero” at the party conference. It’s clear that environmentalism is a key part of British Politics.

However, if the majority of the people agree that climate change is an issue – enough even to want government policies to restrict and tax them – then why is government action necessary?

Capitalism is an economic system where businesses benefit from satisfying as many consumers as possible. If consumers demand eco-friendly products, the market will supply.


One of the most beautiful aspects of capitalism is that it allows innovation. In order for the world to be environmentally friendly without significantly reducing the west’s standard of living, new technology needs to develop.

In addition, the market is extremely efficient at allocating resources in comparison to the state due to the price system. Currently, there is a massive demand for eco-friendly products which can be seen from the packaging of plastic bottles to in fashion retail stores that advertise themselves as 100% recyclable.

Not only does capitalism allow environmental innovation through new technology, it also creates the right conditions through increasing standard of living that decreases pollution. According to the Cato Institute, once per capita income hits between $3,500 and $15,000 (dependent upon the pollutant), the ambient concentration of pollutants begins to decline just as rapidly as it had previously increased.

Capitalism acknowledges that there are finite resources. It rewards efficiency and punishes waste. If a business or a consumer wastes, they are the one who pays for it. In comparison, the state only answers to the general public who probably won’t know the ins and outs of the state’s role with the environment (if they did, they definitely wouldn’t be arguing for a bigger state!).


The free market is the way forward if we want to address global warming and pollution. Though, I doubt government policy or much political pressure will take this approach.

The problem with catastrophe is that people want control and stability, even if that means sacrificing freedom. The response to the coronavirus pandemic is a classic example of this. People tend to think very highly of themselves but don’t trust others to do the same.

“I recycle. I try to be eco-friendly in my lifestyle… but he wouldn’t!” a man will say about his neighbour while his neighbour would say the same thing about him.

Despite the restrictions of the state, capitalism is helping the environment by its nature. The individual wants clearer air, more greenery and a better world for future generations. It is much easier making a change through the market than it is through the state.

If we want to help the environment, we must start with the individual.

About Jess Gill

Jess Gill is a political content creator on YouTube and TikTok (@GillyPolitics). She is a strong libertarian and advocate for free market capitalism.

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