The UK has been hit by a series of strong storms throughout January and into February, with no end in sight. This offers a case study of capitalism under climate change.
The current string of back-to-back storms has been described as "an almost unprecedented natural crisis". We should point out that attribution of any single weather event, or even sequence of events, to climate change, is almost impossible. A common American analogy is to baseball. If a top flight hitter starts taking steroids, you'd expect them to hit more home runs. But trying to pin any one home run on the steroids is all-but impossible - after all, they would have hit some home runs anyway. The steroids only show up in the statistics, not the individual hits.
The relationship of climate to weather is similar. Climate is the statistics of weather. It's almost impossible to attribute an individual event to climate change, but broad trends can be forecast. For a clear, referenced discussion of the UK storms and climate change, see this briefing by the Met Office. As a scientific institution, the Met Office is restrained by a prudent conservatism to not go beyond the data. The briefing stresses several areas where 'more research is needed'.
Nevertheless, they do cite evidence that Atlantic storms are moving north - towards the UK - and their mean intensity is increasing. They note that sea levels have risen and will rise further. And they also cite "an increasing body of evidence that extreme daily rainfall rates are becoming more intense, and that the rate of increase is consistent with what is expected from fundamental physics." For these reasons, it seems reasonable to engage in another kind of prudent conservatism: the precautionary principle. Indeed, Lord Stern, author of the influential ‘Stern Review’ into the economics of climate change, has said that “we are already experiencing the impacts of climate change.”
The precise forms that global warming will manifest itself in local weather are very difficult to predict. Indeed, the famous 'butterfly effect' was popularised to describe atmospheric circulation models. Whether or not the recent weather can be definitively attributed to climate change, it is consistent with the fundamental physics of a warming world, and is therefore an example of the kind of thing we can expect to see more of. Reportedly, the storms have already knocked £14bn, or 1%, off UK GDP, costing £1bn in insurance alone. It’s no surprise that reinsurance firms - who insure the insurers - have been some of the strongest advocates of climate change mitigation.1 It remains to be seen whether the economic impact of extreme weather will accelerate moves to curtail greenhouse gas emissions. We're not holding our breath. But business as usual will mean more of the same. And the storms have been a case study in capitalism under climate change.
It hasn't escaped notice that the response to the storms in the south west was rather lacklustre, but when severe flood warnings were issued for the Thames in the home counties, it was suddenly announced that "money is no object". It should come as no surprise that some peoples' misery is worth more than others. The sight of land reclaimed by the sea is also something we'll be seeing more of, as both sea levels and storm strengths continue to rise (managed retreat is proposed as an alternative to increasing reliance on sea defences). It’s probably too early to draw conclusions about the state response, as it’s likely to be still in-formation in response to emerging crises.2 However, we shouldn’t assume that destruction is automatically bad for capital.
A moderate amount of destruction can be seized upon as an opportunity for restructuring, reconstruction and investment (so-called 'disaster capitalism'). As the Bank of England Governor Mark Carney said, "you get a hit to GDP [Gross Domestic Product] as it's going on and then you get a recovery, you get that back later on with the repair." On a system-level, rates of profit are boosted by the destruction of capital value.3 This wasn’t allowed to happen to any great extent in the economic crisis, as state intervention propped up banks and the housing bubble. In the absence of a world war to destroy capital and make room for growth (the 1940s ‘fix’), might climate change destruction contribute to a recovery of the rate of profit, amidst secular stagnation?
Clearly, if this conjecture is true, this would happen in a hugely unequal, exploitative, and potentially cataclysmic manner. But how much climate destruction is best for capital? Probably more than none. Extreme weather events will start to have an increasing disruptive impact. That might result in shifts in climate policy. But damaging the capitalist economy shouldn't be mistaken for damaging capitalist social relations. Rather, capitalist relations ensure that climate change impacts tend to reinforce existing inequalities.
- 1Munich Re exemplify this.
- 2A normalised role for the army and generalised states of emergency are two of the more worrying possibilities.
- 3If this seems counter-intuitive, imagine a firm worth £20m, that makes £1m profit per year. The annual return on capital is 5% (1m/20m x 100). If the firm is devalued and bought up at a bargain £5m, with the same revenues available, its annual return on capital for its new owners jumps to 20% (1m/5m x 100). So if disasters cause a write-down of capital value, they could, perversely, boost profits.