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Rob RoachWith the latest UN conference on climate change behind us, it is worth remembering that there are two broad approaches to addressing environmental challenges.

The first is the one most Canadians probably subscribe to: environmental problems can be overcome within a free-market system that combines effective government regulation, good information and moral suasion in keeping with western values. You can put a price on pollution; you can pass laws prohibiting practices that cause harm; you can conduct research into problems and potential solutions; and you can appeal to values such as stewardship and moderation.

Perhaps most importantly, we can harness the freedom our way of life allows and the wealth our economic system produces to find ways to walk more gently on the Earth. This is difficult to do when you are under the thumb of authoritarianism (however benign it seems at first) or struggling just to feed your family.

Simply put, we can, and should, improve our environmental performance without having to fundamentally compromise our standard of living and way of life.

The second approach sees this as – at best – a wildly naïve position. Many in this camp find our economic system and the freedoms that underpin it to be morally reprehensible. According to this school of thought, capitalism is the root cause of environmental problems and it cannot be reformed. The way forward is to jettison capitalism altogether in favour of a system based on “ecological” principles.

As the head of the Earth Policy Institute, Lester Brown wrote in 2001, “We have created an economy that cannot sustain economic progress, an economy that cannot take us where we want to go. Just as Copernicus had to formulate a new astronomical worldview after several decades of celestial observations and mathematical calculations, we too must formulate a new economic worldview based on several decades of environmental observations.”

For Brown and many others, the goal is not to find ways to marry our free-market system to environmental goals, but to dismantle it and replace it with a new system. They argue that the neoclassical economics that underpin the Canadian economy are completely out of synch with the limitations of the Earth’s ecosystems. Hence, neoclassical economics and the Canadian economy it has spawned must be destroyed in favour of an eco-economy. As environmentalist Paul Hawken put it in 2005, “rather than a management problem, we have a design problem, a flaw that runs through all business.”

What this new eco-economy will look like is a bit sketchy, but its proponents seem quite comfortable with massive state intervention perhaps best described as a green version of Marxism. From this perspective, the alternative is global catastrophe, so the erosion of freedom that would result from the application of their plans is worth it.

How many people really buy this approach?

There have always been those who fundamentally disagree with capitalism, and their criticism often leads to beneficial reforms. But if radical action based on the “capitalism sucks” camp is limited to a relative handful of agitators throwing rocks through windows during meetings of the G20, it’s not something to lose a lot of sleep over.

However, if the quest to destroy capitalism seeps into how we solve environmental problems, we risk undermining effective solutions that build upon our economic system and way of life. Capitalism is not perfect but when it is combined with liberal democratic principles, it makes possible the innovation and wealth we need to protect our environment. We should not be surprised that the top of the international Environmental Performance Index is dominated by liberal democracies with strong capitalist economies, while the bottom is crowded with countries in which freedom and capitalism are in short supply.

This is why it is worth identifying when the anti-capitalism approach is being put forward. At that point, we need to challenge our elected leaders to reject it and stand by the belief that the efficiency and profits made possible by free markets — in concert with liberal democratic government — can successfully address environmental challenges.

Capitalism is always a work in progress, but its core components are worth preserving and are a powerful means of addressing harmful environmental practices.

Robert Roach is managing director of research at ATB Financial.

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