Climate and the End of Capitalism
Diary: 8 April, 2025
Last week, in an article on the Guardian, Günther Thallinger, an Allianz SE insurer warned that the climate crisis, isn’t just an environmental emergency - it poses an existential threat to capitalism.
The pace of global warming has been significantly underestimated. Last year marked a historic and deeply troubling threshold: for the first time, global temperatures exceeded 1.5C above pre-industrial levels. In March 2025 the global temperature was 1.60°C above pre-industrial averages - the 20th month in a 21-month period that global temperatures exceeded the 1.5°C threshold. Arctic sea ice hit its lowest March extent since satellite records began 47 years ago, marking four consecutive months of record lows. These aren't just worrying trends—they’re flashing red alarms.
Despite decades of warnings, global carbon emissions are still rising. If current policies persist, we’re heading for a world that is 2.2C and 3.4C warmer. In a recent paper, climate scientist James Hansen and his colleagues warned that the world will hit 2°C of warming by 2045. The damage at 3°C becomes so great that some governments may no longer be able to offer financial bailouts. Insurance premiums could skyrocket—or disappear entirely—in high-risk zones. Without insurance, other financial services—such as mortgages and investments—become unviable. In some areas, climate-driven uninsurability may be absorbed or managed. But as it spreads across regions and sectors, we’re no longer facing isolated market disruptions. We’re looking at the potential for systemic breakdowns—where the climate crisis doesn’t just threaten individual assets, but begins to undermine the structural foundations of the global capitalist economy
So, what’s to be done? Thallinger stresses the need to accelerate the transition to zero-emission energy to prevent economic collapse. While essential, that alone won't be enough. Reducing emissions rapidly and deeply, remains a critical priority. But we must also, pursue ways to remove excess carbon already in the atmosphere, repair vital ecosystems, and build resilience to strengthen our capacity to endure what’s already here.
One of the greatest challenges in climate science today is that many proposed interventions remain controversial. Ideas once dismissed as fringe- such as thickening sea ice to prevent collapse or brightening marine clouds to reflect sunlight, are now becoming part of serious scientific inquiry. We’ve reached at a point where we cannot longer afford to reject them outright. Instead, we must thoroughly access their risks, trade-offs and feasibility. Every potentially viable option deserves thoughtful evaluation.
In recent days, commentators on social media, sometimes jokingly, referred to the US tariffs as ‘right-wing degrowth.’ It’s a catchy phrase—but misleading. Degrowth calls for a controlled and equitable reduction in economic activity to protect people and the planet. Idiotic tariffs that raise the cost of food, clothing and essentials don’t do that. They hurt lower-income families without helping the environment. Economic nationalism just risks destroying the economy it claims to protect. It’s a path to chaos and instability.
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