Last Monday, the Columbia Climate School and Columbia’s Journalism School co-hosted the inaugural Perspectives Dialogue Series—a public forum curated by the Climate School to spotlight rigorous, solutions-oriented conversations on climate issues that do not have easy answers. It brought together prominent thinkers with diverse perspectives on capitalism and the role it can play in solving climate change (or not).
Moderated by Alexis Abramson, dean of the Columbia Climate School, the speakers at the “Degrowth vs. Green Growth: Can Capitalism Solve Climate Change?” event explored the evolving discourse around climate economics and policy.
The panelists included Kate Aronoff, staff writer at The New Republic; Aniket Shah, managing director and global head of sustainability and transition strategy at Jefferies; Archana Shah, portfolio manager at Redwheel Sustainable Emerging Markets Equity Strategy, and head of sustainability for Redwheel’s emerging and frontier markets team; and Chris Van de Voorde, founder of JUUNOO and the Circular Value Institute.
Abramson told the audience the goal of the panel was to “convene voices that don’t necessarily always share the same starting point, but who are willing to engage seriously and constructively.” To start off the discussion, she asked each of the speakers: Can capitalism solve the climate crisis?
“Absolutely,” said Archana Shah. “I have experienced investing in a way that green growth has led to both equitable growth and decarbonization, but also have lived experience of what degrowth can do to a country, and how, in my view, [degrowth] is not really a solution.”
Van de Voorde said he was also on the side of green growth. For him, it is a question of urgency for the generations that follow. “My kids will ask in 20 years… what did you do about [climate change]?” he said, and working within the existing system is the fastest route. “The world runs on finance and economy, so use that system to study it, understand it and hack this system so that we get the sustainable business model growing faster than the unsustainable business model,” he added.
Aronoff pointed to the title of her book, “Overheated: How Capitalism Broke the Planet—And How We Fight Back,” as an indication of her answer to the question. A working definition of capitalism, she noted, would be important to frame their discussion. “Do we mean a collection of abstract market forces? Do we mean the sum-total of private actors in the economy? It’s worth thinking very precisely about what capitalism can and can’t do and what we mean by that.”
Aniket Shah, who also teaches at Columbia’s School of International and Public Affairs, the M.S. in Climate Finance program at the Columbia Climate School and at the Columbia Business School, defined capitalism as the private ownership of the means of production. Yes, he said, he believes this could help solve climate change, but only “if government policy is written in a way that steers certain outcomes.” Market forces as a means of allocating capital are fine, he added, if “government sets very clear boundaries and very clear directions.”
Modern climate policy has been shaped by the political and economic context of the 1990s and early 2000s, when market-driven “neoliberal” thinking was prominent, Aronoff noted. Using markets to solve the problem became the main strategy, including pricing carbon and incentivizing private investment in “green” assets, but this has not worked politically. The notion that incentivizing green markets would create enough public support and bipartisan momentum for large-scale climate action has not prevailed. We need to rethink climate action beyond just market incentives, especially if we want to solve climate change, she said.
Van de Voorde said that circular economies hold the solution to climate change. “In a linear economy, you produce something, and in the end, it goes in the trash. The value is gone, and you emitted CO2 to do that. In a circular economy, you close the loop… reuse it, keeping the value and saving CO2.”
Coming from Europe, where there are a lot of incentives and government grants for sustainable products, he said, this has not worked because “nothing scales. That is where capitalism becomes very important. What you need to do is measure the value of a circular product. In capitalism-led systems: if it’s profitable, money flows and it scales faster… Instead of 100 experiments, you run the five with the highest chance of success.”
Aniket Shah told Van de Voorde he disagreed that Europe’s carbon markets were not working. “What’s not working?” he asked. “Here’s a continent which put together is a $20 trillion economy, roughly the size of the United States. That is a 54 percent reduction of greenhouse gas emissions from 1990 to 2030.” They are well on the path to carbon neutrality by 2055, he pointed out.
“The speed of it is not enough,” countered Van de Voorde. We’ve achieved the big initial savings, he explained, but now the remaining effort to achieve full carbon neutrality is lagging and cracking under that pressure.
We also need to ask the question of wealthier economies, such as those in Europe, of what can be “degrown,” Aronoff said. Whole economies do not need to degrow, but it’s important and often difficult to identify which parts of the economy do, she continued. It is easier to point to achievements in green growth, for example, the increased use and lower cost of solar panels and wind power. However, we are not seeing this matched with the slowing or degrowing of other industries, such as automobiles and coal producers, she said.
Van de Voorde suggested the word “degrow” makes people very angry. Instead, he said, we need to make electric or solar options cheaper and explain how much money they will save and what opportunities they will have.
In what she called a “cheeky answer” to the question of how to convince people to prioritize reduced emissions and sustainable technologies, Archana Shah said, an oil crisis would achieve this goal; this would make the world pay attention to energy security.
The specifics are important in this conversation, said Aniket Shah. We should be asking, for example, “How do you get a $150 per ton carbon price? How do you get a trillion-dollar Inflation Reduction Act [IRA] kind of program? How do you increase research and development into low-carbon technologies? There are policy instruments for each one of these things.”
“Europe is actually decoupling GDP growth with CO2 emissions,” he said. “The pace at which CO2 emissions are growing is slowing down. Now, that’s maybe not a win, right? Because we want to peak, but to say that nothing is happening is just not true. China has most likely peaked emissions in 2025, if not in 2024.”
Here in the U.S., there needs to be government involvement to make climate-based regulations and solutions viable in the long run, said Aronoff, pointing to the example of the IRA, which was rolled back once Biden left office, followed by companies announcing they would scale back and accept tens of billions of dollars in losses each because they did not have long-term plans in place.
Capitalism is still the fastest system I know to create change, Van de Voorde said. If it means countries like China take the lead in electric cars, for example, over the U.S., which falls behind because it is not evolving quickly enough, then that is survival of the fittest, he said.
The U.S. has a strong entrepreneurial advantage, said Aniket Shah: “If you see an opportunity to make money, someone will go and build a business.” We just need policy incentives that “set the rules of the game so that more people start those companies” and drive clean technologies like electric vehicles, he continued. Climate change needs to be internalized with tools like the IRA that would make green solutions more competitive.
