How Much Cheap Junk Did You Buy Recently? Why The Economics of Climate Change Spell Doom
Aug 11, 2021
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Right about now, you might have a sinking feeling: the planet is doomed, and nobody’s ever going to do much about “climate change.” Hey, idiot,did you know that term was invented by a notorious Republican PR flack? Let’s try again. Right about now, you might suspect that nobody much is ever going to do much seriously about global warming.
I’m here to tell you you’re right. Nobody is going to do much about global warming, and our civilisation is more or less doomed to burn, drown, starve, and otherwise perish.
Let me ask you a question. It’s going to illustrate why, and then I’ll explain why technically and formally.
How much stuff did you buy from China in the last, say, month or so?Don’t imagine for a second that I’m innocent, like some kind of saint. Me? I bought, hmm, let’s see, some patio furniture, a little doggy play thingie, some random cables, and that’s just off the top of my head. I’m sure there’s plenty more I bought — and you did, too.
What does that have to do with why nobody’s ever going to do anything about global warming? Everything.
You can see a certain drama already playing out on the heels of the new IPCC report —the one that says we’re running out of time to save the planet(don’t they all?) That drama goes like this: rich, developed countries preen and make noble proclamations, and then turn around and say: “Hey! China! You’re the world’s largest carbon emitter!It’syourfault!”
But is it? Whose fault is itreally?
Let’s think about it little more carefully than politicians and other kinds of useful idiots do.Whyis China the world’s largest carbon emitter?
It’s not because all those people in China are consuming stuff of their own.China’s level of consumption is about 30% of its economy. That’s aremarkablylow figure. For comparison — and these are points we’re going to revisit — in Europe, it’s a moderate 50%, while consumption is 80% of the American economy, which is an astonishingly high figure.
Why is China’s level of consumption so low? Well, first let me point out that it is so low that economists have repeatedly warned itstoolow. They’re right — but in the wrong way. They mean that China should be encouraging people to live like Americans — overfed, undernourished, materialistic, and indifferent. They’re right to note the anomaly — but wrong to say that becoming American is the wrong answer.
China’s level of consumption is so low for a very simple reason. China is the rich world’s factory.America’s in particular. All those Chinese people aren’t working so hard to consume stuff themselves — they don’t andcan’t. They’re working away to make stuff for Americans, mostly, to consume. Other rich countries, too, but mostly Americans — remember how America’s consumption is 80%, and Europe’s is 50%?
Now think of America. Think of Americans, selfish, greedy, gorging themselves on stuff. Where does all that stuffcome from? Well, it comes from China, mostly.
What does that mean, in real terms? America (and the rest of the rich world) has effectively offshored its carbon emissions to China.
Let me make that crystal clear. China’s emitting carbon tomakestuff. Sometimes, that stuff is indirectly a product of American consumption — the concrete that goes into factories, or high rises to house the labourers who work in them. More often, it’s just a direct consequence of American (and rich world) consumption — the carbon that goes into making some dumb gizmo you buy on Amazon dot com for peanuts.
See how that works? So. Point one: America and the rich world have offshored their carbon emissions to China (and the poor world).To put it another way, if obese, selfish Americans weren’t gorging themselves on all that cheap junk — China wouldn’t bemaking it.
Now let me come to point two. The global economy is designed — as in literallydesigned— around this sleight of hand. We don’t think of stuff being made cheap and dirty in China for Americans to gorge themselves on —notChinese people, who aren’t consuming this stuff nearly as much, if at all — as “American carbon emissions.” We think of them as “Chinese carbon emissions.”
Why is that? Because that’s the way we’ve been taught to think, by pundits and professors and other assorted fools. That’s the way that “international accounting” works. If a thing is made in a country, it’s “from” that country. It’s an “export.” So China is “the world’s largest carbon emitter,” even though it’s only really just satisfying America’s bottomless demand for cheap junk, and in any thoughtful or sane way to think about the matter, we should say something like: “America’s global economy, of which China is the factory floor — Americans consume most of the stuff China makes, not Chinese people, which is why China makes that stuff in the first place —all thatis overheating the planet to the point of unlivability.”
Maybe that’s too complicated for the average person to understand. I don’t know. I don’t think it is, but hey, what would I know. I’m an arrogant old punk who thinks people should strive not to be as indifferent as they so clearly and painfully are.
Now let me come to the third and final point.If you grasp points one and two — America’s offshored it’s carbon emissions to China, and the global economy is literally built around this sleight of hand, this magic trick — then the third one is going to devastating, but obvious.
Nobody’s ever going to do anything about that, because nobody has any reason to.
The “engine of the global economy,” any good economist will tell you, is “the American consumer.” America’s rate of consumption — 80% of its economy, which is the largest in the world — is by far the highest in the world. China’s mere 30% is a pale shadow by comparison. American consumption isliterally the force which makes the global economy go.
Now let’s think about how Chinese carbon emissions — which, yes, are key to saving the planet — couldactuallybe cut.There are three ways, andonlythree ways.
One is that America and other rich countries decide to block exports from China, or at least place tariffs on them. These are dirty goods, the logic goes, and they should be taxed heavily, and the money put back into clean energy.But what good would that do? The money would go right into rich countries’ coffers — not into Chinese clean energy. Not only that, it would raise prices for Americans. Anyone think that’s politically palatable? Want to make people pay more for the cheap junk they’ve become accustomed to?Good luck with that.
Two is that China decides to get clean itself.Not only is that going to take decades — too late — but the net effect will just be, again, to raise prices. China’s only in it to make a quick buck. It’s just satisfying demand, like a drug dealer. Raising prices is the kiss of death — Americans have become accustomed not just to buying Chinese stuff, but buying it dirt cheap, incredibly cheap, for pennies. Raising prices would be disastrous for China, and it knows it. It would destabilise the government, lead to social upheaval, and all kinds of chaos.It’s not going to happen.
The third option — and the last one — is that the world decides to impose some kind of “carbon tax” on Chinese made goods.Great, great.So what? Again, unless the money from it goes to finance clean energy in China, it’s not going to make any difference whatsoever. Sure, it might lower America’s rate of consumption a little bit, but Americans are hardly going to stop buying stuff from China at a rate that’s going to save the planet. A carbon tax is only going to have the effect of raising pricesforChinese goods, which, I can assure you, will simply be met with an undervalued currency all over again.
Those are the three options, and the only three options. None of them lead anywhere. Are you beginning to get the picture?
Now let me tie up all those threads.
You probably have the feeling by now that it’s all BS.Every few years, the world’s leaders meet, wring their hands, get all preachy and weepy, declare they’re going to do something about saving the planet…andnothing happens. Carbon keeps on rising, the temperature goes through the roof, until right about now, a large chunk of the planet’s literally on fire.
Now you know why. Why nothing gets done. And why nothing’sgoingto get done.
This global economy is built around this con game. “Ecological costs” are “externalized,” in econo-speak.Maybe you even know that much, from a decent master’s program. What you probably haven’t considered is that the global economy as we know it literally cannot exist without that con game.
The global economy works like this. China makes stuff dirty and cheap. Americans consume it voraciously. It feelstoocheap to a sane person — how can something be manufactured halfway around the globe, shipped all the way across it, driven across a continent, and then sold for peanuts?It doesn’t make any sense.
That’s because itdoesn’tmake any sense. The reason all this stuff Americans — and increasingly now Europeans — consume from China is so cheap is that all the carbon emissions have simply been offshored. They’ve been moved to China is all. So have, incidentally, the exploitation, abuse, crap pay, and gigantic factories.Just as jobs and factories and plants were “offshored,”so was all the carbon.
In some vague sense, a numinous legal one, “ownership” changed hands. Who owns the factories now? Maybe the Chinese state does. Maybe some shadowy Chinese billionaires who’s pals with the party does. That change of “ownership” is what allows economists and pundits to say: “those areChinesecarbon emissions!” Just a few decades ago, they were American carbon emissions. What’s changed? Nothing — only a piece of paper, a legal fiction. In the real world, that stuff is still being made for American consumption, directed by American stock markets, controlled by American private equity funds. Nothing about the global economy — except the grime, dirt, pollution — is Chinese. That’s not a coincidence,that’s the point.
Now, because this stuff has disappeared — the factories and workers are in China — politicians can tell the average idiot: “hey, those areChinesecarbon emissions!” And increasingly, they believe it. Then they go home and order a van-load worth of cheap junk a week…from China.
Maybe you see the problem now. If not, let me give it one final try to make it crystal clear. So this average, indifferent person, this useful idiot— me, you, anyone, everyone — is now ordering a van-load of cheap crap from China, only the emissions involved in making and manufacturing all that are “Chinese,” not “American” because Amazon’s delivering it, but doesn’t technically “own” the factories.
What choice does the planet have? One, ban all that stuff — just outright ban this trade of cheap crap for fake money. Good luck with that — the average American would literally lose their minds and shred their faces off if they couldn’t get their Chinese-made junk at this point. It’s a non-starter. Two, raise prices for us idiots. LOL — good luck with that. Most of us will never vote for you again. Three, ask China to be the one to raise prices, and hope it’s even dumber than the rest of us. It isn’t.
Now you know. Why nothing ever gets done about saving the planet. Why climate scientists fall asleep in despair and teenage campaigners shout in rage.Why any sane person looks at the endless summits and meetings and shakes their head. Why it all feels so futile and pointless, like a charade designed to give the impression that something’s getting done, while the planet burns.
Why does nothing get done about global warming?It can’t. Nobody can tear apart the suicide pact between America and China. Between America’s endless maw for cheap junk, and China’s willingness to supply it. In that fatal bargain, by the way, America’s the far stronger party, not China. It’s leading the dance — China’s only following. Unfortunately, the rest of us are being hit by the fallout, too.
Let me add two final notes. One. America’s beenthe world’s largest carbon emitter historically.It’s responsible forby farthe most amount of carbon in the sky. When did its emissions peak? In the mid 2000s, shortly after China became the producer to match its consumption. American carbon emissions really were offshore to China, in other words. Two, you can quibble with me, and point out that various rich countries are doing the right thing — France, Sweden, and so on. That’s great, and it’s nice. But it’s also mostly a symbolic, moral act at this point. The emissions of these countries are so relatively small they barely count at all in the grand scheme of things. They matter in another way, a more abstract one: they tell us that an economy like America’s at 80% consumption, which the world mirrors,ends up consuming itself to death— while one like Europe’s more moderate, balanced, only half consumption has a chance at survival.
Am I telling you we’re doomed? That depends.You’reprobably not, if you’re reading this.But the planet? Nobody is ever going to do anything serious about global warming because nobody can. The systems are way beyond our control now. We’re on an express train to hell, and it’s being driven by a maniacal, suicidal, homicidal algorithm. There’s no getting off this ride, there’s no changing the driver, and the bridge that’s broken right in the middle across a giant chasm? We’reheading towards it, picking up steam.
Fasten your seatbelt and say your prayers. At least now you knowwhyit all feels so futile.
UmairAugust 2021
