Capitalism is “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” Capitalism centers wealth creation via ownership of capital and means of production, distributing goods and services according to the laws of supply and demand.
Capitalism is best known for incentivizing innovation and helping to bring down costs of goods and services, advertising that you get the “best products for the best price.” However, one of the ways that capitalism does that is by ignoring negative externalities—negative byproducts from the production of goods or services that are not accounted for in the cost. For example, a gasoline car releases greenhouse gas, which has a negative effect in the form of climate change. But the cost of that negative effect is a negative externality—it’s not reflected in the cost of producing the car, nor in the price of the car to the consumer. A regulated market can require producers to account for negative externalities—for example, charging a parking fee to create a fund for reducing air pollution. Negative externalities relevant to climate justice include damage to the environment, climate change, and damage to the health of workers and people living around the areas in which fossil fuels are being extracted, processed, or burned.
Climate justice advocates criticize capitalism and capitalist practices as major contributors to the climate crisis. They may argue for more regulation or reform of capitalist practices or for radical reshaping or rejection of capitalism as an economic system.
Our planet is reaching its environmental limits. Capitalism and consumerism, primarily in industrialized nations, are damaging our ecosystem faster than we can repair, renew, or recycle it. Capitalism, as we know it, is unsustainable. Capitalism ignores these planetary limits and behaves as an “extractive” economy (see: “just transition”), extracting resources from the earth without replenishing or recycling them. The wealth generated from these resources is directed to owners and shareholders of corporations, and the local communities from which those resources are extracted are left with a depleted environment.
An extractive economy tends to remove the resources and subsequent wealth from one area into another. Because capitalism often creates feedback cycles in which the “rich get richer,” this results in more and more extractive projects that are harmful to the environment and nearby people that take place farther away from those who receive the benefits. We see this both across the globe between countries as well as within countries.
One current example of this is pollution from fossil fuel drilling and refining, which is concentrated in poorer communities, and most often communities of color (see: environmental racism). This results in resources being literally extracted from the ground around these communities and transferred elsewhere; people rarely have ownership over extraction in their communities. The polluted areas around these sites are colloquially called “sacrifice zones” or “fenceline/frontline communities” — an unhealthy or unlivable environment in one place for the greater benefit of growth of a private industry. Drilling and fracking in California is an example of how this can work within countries.
Some examples from around the world include: