Can capitalism solve climate change?
Jul 5, 2022
Episode 706

Can capitalism solve climate change?

One economist certainly thinks so.

Capitalism is often talked about as one of the big drivers behind climate change. The belief is that our obsessions with buying stuff and growing the economy have destroyed the planet. 

But what if capitalism isn’t the real problem?

“Capitalism only goes in a direction that political choices steer it. And we’ve just made a couple of bad political choices that have caused polluting industries to overpollute,” said Shi-Ling Hsu, D’Alemberte professor at Florida State University College of Law and author of the new book, “Capitalism and the Environment: A Proposal to Save the Planet.”

Whether you believe capitalism is to blame for our climate crisis, Hsu says we could harness the power of capitalism to get us out of this mess. On today’s show, we’ll talk about the tools that could help us reverse course and why that hinges on having a healthy democracy.

In the News Fix: Is natural gas the new Big Oil? We’ll explain how it’s shaping geopolitics. Plus, our social, political and economic lives may start to look really different depending on where we live, thanks to the Supreme Court.

Later, the debate over how many spaces to use after a period is far from settled. Listeners weigh in. And, what about a Kai-sigh index?

Here’s everything we talked about today:

We’re looking for your answer to the Make Me Smart question: What is something you thought you knew that you later found out you were wrong about? Send it to and (508) 827-6278 or (508) U-B-SMART.

Make Me Smart July 5, 2022 transcript


Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.


Kimberly Adams: Hello, I am Kimberly Adams. Welcome to Make Me Smart, where none of us is as smart as all of us.


Kai Ryssdal: I’m Kai Ryssdal. It is Tuesday, that means one podcast one topic. We are talking capitalism and climate change today. And here’s the dilemma. Capitalism arguably got us where we are on a changing climate. Question of course is can capitalism get us out of where we are?


Kimberly Adams: One person who certainly thinks so is Shi-Ling Hsu. He’s an economist and D’Alemberte professor at Florida State University College of Law and author of the new book “Capitalism and the Environment, A Proposal to Save the Planet”. Dr. Hsu, welcome back to the show.


Shi-Ling Hsu: Thanks so much for having me.


Kai Ryssdal: Let’s get to the topic of your book. What parts of capitalism do you believe can help save the planet? Because, you know… Well, let me, actually, let me back up for a minute. Do you buy the thesis that capitalism got us where we are in changing climate?


Shi-Ling Hsu: I don’t. I don’t think capitalism is to blame. I don’t think you could blame capitalism for climate change any more than you could blame capitalism for, say, firearm manufacturers marketing toxic masculinity to kids. Capitalism only goes in a direction that political choices steer it. And we’ve just made a couple of bad political choices that have caused polluting industries to over-pollute.


Kimberly Adams: What are those choices?


Shi-Ling Hsu: Well, you know, you think about the economy as this machine. If you told the economy, let’s maximize GDP, and let’s not worry about the environmental harm that’s caused there by. Guess what, a capitalist economy is going to do that, and it’s going to do it very efficiently. So the choices would be, let’s focus on economic growth, and let’s not think too much about the environmental costs of that economic growth. I will say that, even if capitalism isn’t strictly to blame for it, what it does do – because it’s so efficient – is amplify the effects of those political choices. And, you know, it’s done a marvelous job of growing the economy and ignoring environmental harm.


Kai Ryssdal: All right so, how does capitalism get us out of this, then? Because, well, I’m not going to go off my standard spiel about political choices in this country just simply not being made. But how does capitalism help us?


Shi-Ling Hsu: You know, think about capitalism is that if it’s operating well, under a well-functioning democracy, there’s some pretty surprising things that happen in capitalist societies. What we’ve been doing, in my view, wrong for the past 150 years is not pricing environmental harm. What I’m proposing in the book is that we should have environmental taxes that reflect the cost of environmental harm of whatever industrial activity or commercial activity is going on. Now, what that does is, if you actually make capitalists, industrialists, everybody really, kind of take into account the environmental harm they’re causing to everybody else, they make different choices. What we’ve been doing for the past 150 years is making choices while ignoring the environmental costs. If you make people think about the environmental costs, in the interest of trying to reduce their tax bill, they try and figure out ways to reduce their environmental harm. And the fact that we haven’t been doing that makes it seem like this is a big lift, but really, it’s just capitalism while making people think about a different set of prices. It’s a big deal that we haven’t had environmental prices all this time. Because, you know, if you tell people like, you got to pay for labor, land, energy, raw materials, but you don’t have to pay for environmental harm. Guess what? They’re gonna do a great job of economizing on land, labor, energy and raw materials, but not environmental harm.


Kimberly Adams: You prefaced that last answer with if capitalism operates in a well-functioning democracy, given where we are, at the moment, how can we actually deploy the strategies of capitalism to solve environmental harms? If we may not necessarily be in a well-functioning democracy?


Shi-Ling Hsu: Well, I don’t think I can solve the well-functioning democracy part in the book. What I can say is, because of that West Virginia decision, a carbon tax came close to being part of a reconciliation package. I don’t know, maybe, now that West Virginia has been decided that it might seem a little bit more important of an option this next time around. The only thing I would say is that, it’s true one tax would be tough enough in Congress, what about like several of them? Which is what I propose. Well, you know, here’s my pitch. Probably over 100,000 Americans and millions worldwide die of air pollution and having nothing to do with climate change, by the way, I’m talking about fine particulate matter. You know, why do we think that’s okay? Will you pay the equivalent of a few cents more per gallon of gas, depending on where you live maybe, I don’t know, five bucks a month extra on your monthly electricity bill? If doing so, if everybody doing so, would save 100,000 lives? You know, that’s the magnitude of costs and lives we’re talking about. And I think that doesn’t get talked about enough.


Kai Ryssdal: Sorry, Kimberly, the answer to that question obviously, is yes, right. Of course I would pay an extra five bucks a month. There are some in this economy who can’t, but many, many, many people can. The question is that we collectively lack a sense of urgency and have been since climate change first got into the dictionary. And I wonder how you try to impart that now when – and you can’t see me because this is a podcast, but I’m gesturing wildly at everything. You know what I mean?


Shi-Ling Hsu: Yeah, well, maybe the way to pitch this also is to talk about how you can make money in an environmental, elite capitalist society. You know, it’s kind of funny, I lived in Vancouver, Canada, for about eight years. And while I was living there, the province instituted a provincial carbon tax. Now, I wrote about carbon taxes, I thought I knew what I was talking about. At that time, right when it was getting started, we had our second child and we had to add rooms onto our house. So we hired a contractor, and his name is Dave, a real hard-hat-and-lunch-bucket kind of guy. But while we’re going over the blueprints, he says, you know what, as long as we’re ripping the roof off, and adding a few rooms upstairs, this is what you should do. You should install high efficiency furnace and weatherize all of your windows, even the ones that we’re not putting in up top. Because, you know, Professor Hsu, there’s carbon tax coming on in the province, and the payback period just went from eight years to three years. And I said, well, yeah, I knew about the carbon tax. But what moved you to be so interested in how much money you could save me? And he said, you know, you’re like the 10th project I’m working on, and five of those people have been asking me, can I save money because of the carbon tax? Is this the time to get a high efficiency furnace? And I tell that story, because sometimes you just don’t really know how a price signal works until it actually happens. I never would have guessed that my contractor would be so on top of the effects of a carbon tax on home renovations until it actually happened. I think if you kind of talk about how environmental capitalism is just like the capitalism we’ve always been experienced, only with a different orientation, then maybe it seems more palatable. It’s not going to sound palatable to the people that are going to lose their jobs. Like, we can’t really afford to pay people to dig coal out of the ground anymore, it’s not going to sound palatable to them. But to a lot of other people, I think it’ll sound pretty familiar.


Kimberly Adams: There are going to be people who hear this and think, look, we have tried capitalism as a solution to many ills of society, including climate change, and look where it has gotten us. Isn’t it time to try something new? Like, is there an argument that there are other systems or other strategies that are better than capitalism for solving problems at the scale of the global climate crisis?


Shi-Ling Hsu: Well, two things. I think some people think socialism might be an alternative. Socialism doesn’t have a great track record on the environment. Now, as for “we tried this before”, I don’t think we actually have tried this. I don’t think we’ve actually had an economy where we did a lot of pricing environmental harm. So you know, one country that has done a pretty good job of pricing carbon anyway, is Sweden. And they’re thriving. They have a healthy economy, they make lots of stuff that the rest of the world wants to buy, and they’re doing it without a big carbon footprint. So you know, we haven’t really tried this, at least not to the scale that I’m suggesting we need to try it.


Kai Ryssdal: So for the layperson reading this book, what do you want them to take away?


Shi-Ling Hsu: What I want people to take away is that, you know, capitalism is an agent. And it’s a pretty powerful one. You pointed in one direction and it is going to go. What I think we could do is point it in a different direction, we could point it in the direction in which people not only take account of environmental effects, but they try and figure out ways because they have a profit incentive to reduce those environmental effects. And the way to do that, it doesn’t sound like fun to have kind of taxes, who’s in favor of a tax. But what I’d like you to remember, is that the costs of those taxes aren’t going to be terribly big. They’re going to be big enough for a lot of people to change some decisions. But on a day to day basis, it’s not going to be as costly as some people would have you believe.


Kai Ryssdal: Shi-Ling Hsu is an economist, also D’Alemberte professor at Florida State University College of Law there. And more to the point, he’s got a new book coming out. It’s called Capitalism and the Environment, A Proposal to Save the Planet. Professor, thanks for your time. We do appreciate it.


Shi-Ling Hsu: Thanks so much for having me.


Kai Ryssdal: Saving the planet. There you go.


Kimberly Adams: I got really stuck when he said that if you told people they’d have to pay $5 more in their monthly electric bill or a couple cents more per gallon of gas to save 100,000 lives. This is almost exactly the argument that we made earlier in the pandemic – we being media, government officials. Everyone’s saying, put on a mask, stay at home, deal with these economic inconveniences to save hundreds of thousands of lives. And it didn’t work. And also, I’m mindful of the disproportionate impact on various communities of the consequences of climate change. It falls predominantly on the developing world. Here in the United States, predominantly on low income BIPOC communities. And I really do question whether sympathy and empathy are enough.


Kai Ryssdal: Yeah, they’re not, right? I mean, they’re not.


Kimberly Adams: I was ready for your counterpoint. I really was.


Kai Ryssdal: No counterpoint at all. You’re spot on. You’re spot on.


Kimberly Adams: So I mean, I guess the economic incentives are all there’s left. Hmm.


Kai Ryssdal: I guess we’ll see.


Kimberly Adams: All right. Let us know what you think our number is 508-827-6278 also known as 508-U-B-SMART. You can also send us a voice memo, And we’ll be right back.


Kai Ryssdal: News news news news news, Kimberly Adams you go first.


Kimberly Adams: Still talking about the Supreme Court. So there was yet another kind of earth-shattering bit of news out of the court, just you know, at the end of their session that they’re going to be taking up a case from North Carolina, about whether state legislatures should be immune from judicial oversight in state court when it comes to setting election rules, right. So it sounds super wonky, but long story short, it could potentially set up a situation where state courts and state legislatures throw out election results and cause all sorts of shenanigans, potentially. This is what the people who are the most worried about it say. But the larger thing that seems to be happening with the court and why it sort of has a lot of implications in my head, for business and technology and everything, is that they are just going hardcore into individual states need to be deciding things, as opposed to the federal government. And that, in some ways just really exacerbates the differences that people are going to feel within individual states in terms of their day to day lives. And we’ve been looking a lot of this over on the Tech show in terms of state by state privacy rules, which are starting to become more and more relevant, as a lot of people are more worried about their health data and online privacy, in light of the other Supreme Court ruling overturning Roe versus Wade. But where you live, moving forward, is really starting to have an increasing impact on what your social and political and economic life is going to look like. And that’s always been true to some extent, but I feel like it’s getting even more so.


Kai Ryssdal: Yeah, the evidence only backs you up. I think that’s exactly right. I think that’s exactly right. Okay, so a quick one for me, sort of along the lines of what we were talking about with Professor Hsu, capitalism and the climate and what’s going on. There’s a great piece in Bloomberg today about natural gas, and how it is now the linchpin of global energy markets and in some way, globalization itself. Because everybody’s shifting to natural gas or wants to, because it is less polluting than oil. It’s not zero pollution, obviously, but it’s less polluting than oil. And the prices are going up and not everybody can afford it. And there’s tensions in Europe between the Europeans and the Russians about natural gas. And the Norwegian natural gas workers are on strike, so prices are going up there. It’s a really interesting, not even at all wonky piece, which is unusual for Bloomberg. And we’ll put it on the show page. It’s just, it’s really interesting.


Kimberly Adams: Did you hear about that massive chemicals plant in Germany? Where they said that because of natural gas shortages, just like extremely minimize operations. And I know it sounds obscure, a chemical company, but these are the chemicals that go into lots and lots of products. And you know, yet another interesting bit of the supply chain that could get snagged up.


Kai Ryssdal: Goodwill is definitely going to… you know. I think that’s the handwriting on the wall. Anyway, that’s it. Let’s do the mailbag, shall we?


Kimberly Adams: I kind Kimberly’s was Godfrey from San Francisco, from Charleston, South Carolina. And I have a follow up question that has me thinking and feeling a lot of things.


Kai Ryssdal: Okay, so I talked about the cover of last week’s New Yorker on the pod, and it was basically two Americas, but two Americas living side by side. One side had Black Lives Matter, one side had the thin blue line American flag. So it was two different Americas, but living side by side. And Kimberly said, would we actually really see people living side by side in this country today? Because that’s increasingly not what we’re seeing. And we got this.


Reed: Hi, this is Reed. I’m calling from Media, Pennsylvania. I was listening to your show from Monday and I live in one of those places where the two halves of the New Yorker cover live side by side. I live on a street that’s about a mile long, it’s a circle. And I’d say we are evenly divided. And at very interesting times of year, the sign competition get passive aggressively heated. I think there are a lot of swing states where everyone walks into a barbecue and a little bit concerned about what’s going to happen, but we get on to get along. Thanks for making me smart. Elections are always interesting in Pennsylvania. And I look forward to hearing your coverage in the next few months.


Kai Ryssdal: Wow.


Kimberly Adams: That’s super interesting.


Kai Ryssdal: That is super interesting. That was a great voicemail. That’s really interesting. Wow. Huh.


Kimberly Adams: A topic for another discussion that I often ask people is, what have we done to our country that we have made it bad manners to talk about politics with each other? But that’s a conversation.


Kai Ryssdal: That’s actually a really good question. What the hell happened that that became something we can’t even talk about?


Kimberly Adams: And what’s the consequence of it even that is literally bad manners to talk about politics. All right. After last week’s answer to the make me smart question about the double space, after a period, we got so many emails and voicemails and DMs and ad mentions and everything, including this voicemail.


Elaine: This is Elaine Perry from Pasadena, California. And we listen to you guys every night. It’s really great. And tonight, we heard this thing about two spaces after a period. We don’t do that, because the character count in our scientific abstracts won’t allow us an extra dispensation for that extra space. So we don’t do two spaces after a period so that we can say characters and write more letters. Thank you for making me smart.


Kai Ryssdal: That’s pretty funny.


Kimberly Adams: That’s a good point, those extra spaces would add up pretty quickly on a character count. Yeah.


Kai Ryssdal: All right. We also… no go ahead.


Kimberly Adams: I just love how everyone’s reaction to this is extremely personal. No one cares about grammar at all. It’s just like, this is how I feel! It’s like the Oxford comma level commitment.


Kai Ryssdal: Oh my god, we should do a show on the Oxford comma. Anyway, we got another one. Here we go.


Curtis: Hi, this is Curtis in Boise. I just wanted to point out that when I’m texting, and I double space after a word, it automatically inserts a period. On another note, I have a suggestion to help us all understand the mood of the country. When I listen to the podcast, every time the news is anything but good. Kai will sigh a lot. I think we should count how many sighs he gives us per episode. And then on Marketplace when he’s doing the numbers, he can give us the count from the previous day. We could call it the Kai-sigh index. Thanks for making me smart! Bye.


Kai Ryssdal: Kill me now, just kill me now Curtis. Oh my Lord. We’re gonna go, we’re gonna go, but first: the answer to the make me smart question, something you felt you knew, but later found out you’re wrong about? Here you go.


Pete: Hi, this is Pete in Southern California. One thing that I didn’t know or really appreciate at all before the pandemic and afterwards, was how many kids really relied on school to provide food. I was so shocked and just completely caught unaware by the fact that there are so many people that relied on food for either lunch or breakfast. I’m really disappointed in myself, I didn’t realize how much kind of food insecurity there was and how it was tied to the public school system.


Kai Ryssdal: Absolutely no reason to be disappointed in yourself. Because not a lot of people are aware of how deeply food insecurity is tied into the public school system. But yeah, it’s a big, big deal. I’m glad you brought that up.


Kimberly Adams: And they expanded who could access food from schools during the pandemic. And a lot of schools organized to let kids take drop offs where parents could come by and pick up meals and food and snacks. And those ended up getting shared amongst whole families. And I think their efforts to try to extend that program which expired, but I’ll look that up and get back to you.


Kai Ryssdal: Are you around your dog?  Yeah, they’re working on expanding it, but it did expire, and for now only a couple of states have said we’re gonna keep doing it. California is one of them. I don’t know who the others are. But yeah, school lunches are not just school lunches. Anyway, do us a favor, keep sending us your answers via voice memo to our email at Or leave us message 508-827-6278, 508-U-B-SMART is what that smells – spells! Oh my gosh.


Kimberly Adams: No, I’m in the studio actually.  Make Me Smart is directed and produced by Marissa Cabrera. Our intern is Olivia Zhao. Ellen Rolfes writes our newsletter.


Kai Ryssdal: Juan Carlos Torrado engineered the programs today, Charlton Thorp’s gonna mix it down later. Ben Tolliday and Daniel Ramirez composed our theme music. The senior producer is Bridget Bodnar, but she’s off this week, so I don’t know who’s producing this podcast. No, I’m kidding.


Kimberly Adams: Marissa!


Kai Ryssdal: I know. Donna Tam is Director of On Demand. Marketplace’s Vice President and General Manager is Neil Scarborough.


Kimberly Adams: I love the passion of the people around this double space after period thing.


Kai Ryssdal: Look, I will die on this hill, man. We talked about it last week.


Kimberly Adams: It’s a nice, low stake thing.


Kai Ryssdal: That’s right. Oh my goodness.

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