Green capitalism posits that capital exists as natural resources upon which all wealth depends, and therefore market-based government policy should be used to deal with environmental issues. This market-based idea focuses on the positive incentives associated with profits and prices, as opposed to government regulation, which emphasise negative incentives such as taxes. Because fossil fuels and other such resources are limited, shortages will inevitably occur.
As scarcity drives up prices, capitalist corporations need to find a way to continue expanding despite this while relying on less. However, green capitalism claims that this is what will lead to ecological prudency. The more efficiently a company runs its operations, the more it’s profit margins will end up being. It promises that there is no need to slow the growth of the economy to use less from the biosphere.
This is evidenced by the success chemical company DuPont, which voluntarily adopted Kyoto Protocol goals in the late 1990’s. This led to a saving of $6 for every ton of carbon dioxide the company produced. these savings would go into expanding the business however, resulting in more use of resources anyway!Garret Hardin’s article titled the ‘Tragedy of the Commons’ claimed that the freedom enabled by the welfare state leads to over-consumption of resources and pollution. On the other hand, a free-market system would mean families who choose to have many children would naturally not have enough resources to sustain them, curbing overpopulation. Capitalism itself has had such success because it appeals to the human tendency to value the improvement of one’s own immediate condition in regards to wellbeing or material wealth over the improvement of common conditions such as the state of the environment.
Traditionally environmentalism attempts to appeal to selflessness and postponed reward, which are values that most people throughout history have been unable to sustain, so green capitalism offers a solution – saving the environment with minimal sacrifice. In the US, environmentalism is touted as an instrument to maintain economic hegemony. Barack Obama himself said in his state of the union speech that ‘the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.’ Climate change and dwindling resources offer a unique opportunity for capitalism to begin a new growth strategy with ecology at its core.
The justification for business leading sustainability is that it alone possesses the power, resources, and expertise required to begin to solve environmental and social issues.