Rage of Nations—Western Democracy Faces Its Most Dire Trial Ever

Posted by Graciela Chichilnisky, Guest Contributor

Apr 11, 2016

In both Europe and the U.S., a convergence of crises could make or break civilization as we know it. That's why these elections matter so much.

It is easy to poke fun at United States Republican frontrunner, Donald Trump.

He provides an endless supply of material for criticism and ridicule. But there is a real issue here: The electorate is furious in both sides of the Atlantic. In a democracy, this matters.

The European Union faces a one-two punch: in June UK voters decide whether the United Kingdom remains in the EU, while Germany's Chancellor Angela Merkel suffered a setback as voters-backed right-wing populists due to her contentious refugee policies. It is mass migration that fuels the electorate's fear and danger in both sides of the Atlantic. Trump fuels discontent about immigrants: he wants to return Mexicans to Mexico, and not to allow Muslims into the US. This is new inWestern democracy but will be with us for sometime. And in fact, it is the reality of climate change.

Climate change intensifies conflicts and creates mass migrations. Tens of millions of people are displaced due to climate change according to the United Nations.

Severe droughts and heatwaves in Syria and the Middle East at large preceded the war leaving people without jobs, food or hope - and migrating for their lives.

This unprecedented wave of refugees into the EU is unravelling Merkel's successful government. Germany was until now the EU's economic backbone. The massive migration waves caused by climate change fuel ethnocentrism, fear and political xenophobia which underlie Trump's appeal. Massive migration waves can lead to geopolitical unravelling of Western democracy. These migration waves are new but they are connected to climate change, and they are here to stay.

Putting Blame Where it Belongs

Climate change is largely a result of the Bretton Woods institutions and their deliberate policy to globalize the world economy based on extensive exports of natural resources from poor nations. This means petroleum, coal and gas, minerals, metals, forest products and meat. Since their creation in 1945, the World Bank, the International Monetary Fund, and the World Trade Organization have been based on hyper-exploitation of natural resources that they encouraged and even coerced from poor nations.

Low prices of natural resources have contributed a several fold increase in the wealth gap between the poor and the rich nations since World War II. This was the most successful period of industrialization the world ever saw. It was based on extensive overconsumption of natural resources, and the direct result is climate change.

The world's poor suffer the worst consequences. Over-mining in Bolivia - which has one of the largest natural gas deposits in South America - and dried water resources of the Uru-Murato, an ethnic group that is one of the oldest cultures in the Andes.

They survived as fishermen on the shores of the salty Lake Poopo, one of Bolivia's largest water bodies. They outlasted the Inca empire and the Spanish conquest, but they are about to go extinct because of the resource-based globalization created by the successful Bretton Woods institutions.

"Now there is no food to eat: the water is gone, so the fish and birds are gone. That is why … we are facing extinction," remarked Felix Condori, the mayor of the Uru-Murato village of Llapa Llapani. Bolivian President Evo Morales recently announced he would open up 22 protected areas for hydrocarbon exploitation. "Whatever it says, the government has based its political economy in extractive activities ... so this was bound to happen."

Almost a decade ago, the UN warned that "indigenous people are among the first to face the direct consequences of climate change owning their dependence upon, and close relationship with the environment and its resources" (PDF). In Bolivia, largely an indigenous country, this is already happening but it is a microcosm of a global trend.

Water is now one of the scarcest resources globally, according to the UN. The story is the same around the entire developing world.

What Needs To Be Done

We need to replace the Bretton Woods system. Fossil fuel energy is today the basis of industrialization, and its use since WWII is what is causing climate change. The period since WWII is when the world economy globalized, where the North and the South wealth gap increased deeply and became three times larger what it was before, when abject poverty led over 1.3 billion people to live below the level of satisfaction of basic needs, and on the brink of survival.

The Bretton Woods institutions were created after WWII: the IMF, the World Bank, the WTO, and they were dominated by the US that become nearly 60% of the world economy after the destruction of Germany and Japan.

The Bretton Woods institutions used financial tools, denominated in US dollars, to encourage and coerce 80% of the planet’s population in the developing nations to follow a resource intensive form of economic development, leading to the over-extraction and exports of their fossil fuel resources and other important natural resources at the lowest prices ever –except perhaps for the prices we face today – and their overuse in rich nations.

Fossil fuels are intimately connected with globalization -indeed they are the basis of the current wave of globalization. Fossil fuels are the basis of industrialization and they are traded through international markets: the international markets are dominated by rich nations, and these markets grew three times faster than the world economy as a whole since WWII. In these markets, poor nations that house 80% of the world population over-extract the earth’s resources within their territory for exports, and export them at prices that are lower than replacement costs, leading to sustained poverty, while rich nations who house 20% of the world’s population overuse the world’s resources and benefit from them at very low prices.

The Bretton Woods institutions were the first global financial institutions the world ever saw. They fulfilled their mission, and now they are dragging the world into an environmental disaster. Action is needed, immeditely, including:

New Wayst to Finance. New global financial institutions are needed to correct the many deep wrongs of past organizations.

Resource Limits. We need to limit the exploitation of the planet's atmosphere, its bodies of water and its biodiversity. These are basic needs for human survival: we need clean water, clean air and food without which we cannot survive. All this is possible and must be done.

C02 Capture. In addition to the creation of new global financial institutions, we must proceed with the removal of carbon dioxide from the air. It is possible with today’s proven technologies to capture of CO2 directly from the atmosphere and at a very low cost -- this is called direct air capture (DAC) technology. The CO2 can be utilized in valuable products to reduce costs. With this carbon negative technology™ one can build “carbon negative power plants”™ that produce energy while they clean the planet’s atmosphere. These power plants can produce CO2 in a profitable manner, so the final product is more development with a cleaner atmosphere.

One such power plant is Global Thermostat, which I created in 2010 precisely in order to assist in the titanic struggle for the future of the planet. The Kyoto Protocol and its carbon market created the economic structure to solve the problem, but we also needed technology to physically clean the planet’s atmosphere and provide energy to the nations of the world. This is why I founded Global Thermostat, a company that is now in a commercial stage, and created a technology conceptualized and patented with Dr. Peter Eisenberger, that removes CO2 directly from air.

Our proven technology removes CO2 at such a low cost that the CO2 thus produced can be sold at a profit for food, beverages, fertilizers, building materials, synthetic fuels, etc. The market for CO2 on earth is huge, exceeding $1trillion/year, and it can absorb all the CO2 we need to remove from the atmosphere to avert catastrophic climate change – this is now a necessity according to the 2013 IPCC Fifth Assessment Report p. 191.

We need to move in this direction and implement it as soon as possible to prevent the extinction of humankind.

Graciela Chichilnisky is Professor of Economics and of Statistics at Columbia University and Visiting Professor of Economics at Stanford University, and was the architect of the Kyoto Protocol carbon market. www.chichilnisky.com