Have a look at this just-published article in PNAS by Jerome Dangerman and Hans Joachim Schellnhuber on the topic of climate change:
The contemporary industrial metabolism is not sustainable. Critical problems arise at both the input and the output side of the complex: Although affordable fossil fuels and mineral resources are declining, the waste products of the current production and consumption schemes (especially CO2 emissions, particulate air pollution, and radioactive residua) cause increasing environmental and social costs. Most challenges are associated with the incumbent energy economy that is unlikely to subsist. However, the crucial question is whether a swift transition to its sustainable alternative, based on renewable sources, can be achieved. The answer requires a deep analysis of the structural conditions responsible for the rigidity of the fossil-nuclear energy system. We argue that the resilience of the fossil-nuclear energy system results mainly from a dynamic lock-in pattern known in operations research as the “Success to the Successful” mode. The present way of generating, distributing, and consuming energy—the largest business on Earth—expands through a combination of factors such as the longevity of pertinent infrastructure, the information technology revolution, the growth of the global population, and even the recent financial crises: Renewable-energy industries evidently suffer more than the conventional-energy industries under recession conditions. Our study tries to elucidate the archetypical traits of the lock-in pattern and to assess the respective importance of the factors involved. In particular, we identify modern corporate law as a crucial system element that thus far has been largely ignored. Our analysis indicates that the rigidity of the existing energy economy would be reduced considerably by the assignment of unlimited liabilities to the shareholders.
For those not used to this kind of eco-econ vocabulary, allow me to translate in plainer econ English:
The world is stuffed because irresponsible big energy companies keep digging for cheap fossil fuels and refuse to put big money into renewables, preventing the emergence of a more sustainable world energy system. Part of the problem is that the shareholders of these big energy companies do not pay the costs to the planet of the burning of all this fossil fuel. We should make them pay by holding the companies and their individual shareholders legally to account for the use of the fossil fuels they dig up, if necessary impounding their individual assets.
What can one say of such day-dreaming which, if implemented, would mean every superannuation member in Australia that indirectly owns shares in BHP or other coal-digging companies is suddenly personally liable for climate change? There is a kind of charming naivety and optimism about such legalistic-bureaucratic ‘solutions’ to climate externalities. If only we can punish those nasty shareholders (i.e. most Australians over the age of 30) and finally have proper investments in renewables, all will be well!
But will we really self-destruct the capitalist system by taking away the limited liability construct that has underlain its financing for 400 years? And would full-liability entities (like governments) really do anything different from companies when it came to energy investments in the absence of some world climate police who made them comply with whatever some all-measuring central world committee decided was palatable? Don’t bet on it…
So what you are really looking at is yet another variation of the big world-bureaucracy solution to the climate-change problem, complete with transfer of national sovereignty to whomever decides on how high the externalities are and who is to blame for them, complete with the overthrow of the capitalist system. Keep dreaming, boys, but know this: allowing yourself to live in lala-land by pretending the world political system is yours to dictate does not help the planet’s ecosystem one iota.