Market Forces Are Not Enough To Halt Climate Change

Martin Wolf, the premier economics analyst of the Financial Times, shifts position, recognizing that market forces are not enough.

When traditional sources switch views, it's worth paying attention. For decades Martin Wolf has been a go-to source for traditional economic policy analysis. This article is not about regenerative development, but his recognition that market forces are not enough to manage what is viewed as the singular problem in today's long-term viability, climate change, is a dramatic recognition of the failure and inadequacy of existing policy approaches. 

A subhead of "Investor returns imply that the welfare of future human beings is close to irrelevant" is a succinct summary. While the author struggles with alternatives including the de-growth movement, which he deems "politically irrelevant" he reverts to the challenge of increasing demand for renewable energy in the face of steady demand growth. 

A key point of the article refers to the book "The Price is Wrong: Why Capitalism Won't Save the Planet" by Brett Christophers. Worlf writes, Chistophers "argues that falling price of electricity generated by renewables does not make these an attractive investment for investors: it is profits, not marginal costs, that matter." 

He concludes that if Christophers is right then " some combination of heavy carbon taxes, long-term subsidies and changes in the design of electricity markets will be needed." All areas of action requiring high level, systemic, and coordinated policy responses, not free markets.  

This recognition from a mainstream source about the need for change and the recognition that only coordinate systemic responses have any chance of success adds significant momentum for those advocating systemic solutions.