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Carbon pricing is neoliberal logic that’s doomed to fail. Weaponizing capitalism to

solve climate change mistakes capital as the solution rather than the problem.
Gonçalves 22 [Veronica Korber, professor at the Department of Economy and International Relations,
Federal University of Rio Grande do Sul, PhD in International Relations, University of Brasilia, Masters in
Environmental Law and Political Sociology, Federal University of Santa Catarina; Veridiana Dalla Vecchia,
Federal University of Rio Grande do Sul, “Limits of Carbon-Pricing in a Climate-Change World,” October-
December 2022, https://doi.org/10.1590/2179-8966/2021/55342]

In the following section, we explore the argument that carbon

pricing is a neoliberal response , based on the premise
that market solutions are capable of solving the problem of climate emergence - with or without the States
involvement. We argue that, from a neoliberal point of view, the best way to protect the environment is to price
nature within a market that can be legally shielded . The attempts to form carbon markets are part of
this logic. Then, in 2.2, we asset that because it is a neoliberal response to an environmental issue, it is a limited
response: as it prioritizes the economics instead of the environmental results, it is susceptible to
exceptions to specific sectors, flexibilization of scope, free allocation of allowances and
implementation plans that dimmish the potential environmental benefits of the measures.
2.1 Carbon pricing as a neoliberal response to climate change

The consensus on carbon pricing as the most effective way of dealing with climate change is an
expression of an ideology - the centrality of economics - presented as a technical answer - a “cost-effective”
solution to deal with carbon emissions. The logic involved in this consensus is that climate change is a challenge,
but also an opportunity , as it creates new goods, markets and demands. In this sense, the Stern Review
states that “the world does not have to choose between preventing climate change and promoting
growth and development” and that combating climate change is a “ long-term strategy for the benefit of
growth ” (STERN et al., 2006, p. iii).

Concepts like “green

economy” and “low carbon economy” are inserted in this rationale that bets on the
conciliation between economic growth and environmental sustainability, and they are the base to
mechanisms that seek to instrumentalize capitalism in favor of the decarbonization of the economy, which
Parr (2013) summarizes as “climatic capitalism”. It is believed that market mechanisms can provide adequate
solutions to environmental problems because there is an understanding that governments are inoperative and markets
are efficient. According to this rationality, a condition for a sustainable future is the market’s
recognition of its responsibility as producers of externalities. As claimed by Bello, this is a fetishistic expression :

This reliance on the market to deal with the most threatening problem of our time is incongruous , given the
massive market failures of the last decade, in international finance, in dealing with poverty, in
promoting development (…) the fact that the ideological fetishism of the market is one of the
greatest obstacles to coming up with a viable global strategy to deal with global warming (BELLO,
2009).

Since the 1980s, this

logic gains increasingly neoliberal contours . The neoliberal response to the
environmental crisis was marked by an expansion in global environmental financing, with a rapid increase in
the involvement of private companies . At the same time, market mechanisms were implemented as
instruments of environmental governance at various scales, implying a certain level of regulatory power at the
supranational level and of non-national state markets and actors, but also a continuous emphasis on the management of carbon
by states (WHILE et. al., 2009).

Carbon markets are part of this neoliberal logic and may be considered one of the most significant
cases of neoliberal governance , due to their scale and geographical reach. Bumpus and Liverman (2008) classify investments
in carbon markets as a strategy of “accumulation by decarbonization” , in an expression that comes from David
Harvey's (2005) concept of “accumulation by spoliation”. The accumulation by spoliation of neoliberalism is
characterized by four characteristics, which can be identified in carbon markets: the commodification of
resources, financialization of resources through their incorporation into international markets, crisis management
according to the interest of the private sector, and States functioning as agents of redistribution and
market regulation (HARVEY, 2005). Bumpus and Liverman (2008) identify a case of neoliberal governance in
carbon markets because the management of the environmental problem is partly transferred to the market or to an
individual, and it is up to the State to establish the operating rules in which the markets operate.

Regarding the rationality involved in carbon pricing, an empirical study by Blum (2019) based on interviews and participant observation in
events parallel to international climate change conferences concluded that, among his interviewees, the legitimacy conferred to the carbon
markets has been closely linked to political confidence in fulfilling the expectations of the respective public. The delegitimation discourse of
carbon markets highlights institutional, logical, and ethical problems perceived in the structures, procedures, and results. The legitimation
narrative emphasizes results achieved, potential benefits for implementing the Paris Agreement, and possible institutional reforms. Regardless
of their efficiency or effectiveness, confidence in these mechanisms remains strong and correlates with the actors' acceptance not only of
carbon markets but of market mechanisms in general (LANSING, 2013; BLUM, 2020).

Despite two decades of its proliferation, carbon

markets’ objectives have not been achieved. And even though economic
mechanisms have not yet shown effectiveness in tackling climate change (for example Kollmuss et al, 2015, and
Simonet et al, 2014), global climate governance continues to bet on the market to reduce greenhouse gas
emissions. One example of this defense of carbon pricing as a technical solution despite the results obtained so far is the World Bank Report
(2019):

In 2018 and 2019, the number of carbon pricing initiatives worldwide increased and existing systems were strengthened as
jurisdictions assessed their policies to better align with their climate goals. But we are still a long way from where we need to be to
fulfill the objectives of the Paris Agreement. The coverage and price levels of carbon pricing initiatives are still insufficient. It is crucial
that jurisdictions take action now to increase the breadth and depth of carbon prices. (WORLD BANK, 2019, p.8).

In the context of neoliberalization, the

solution to market failures is found in the intensification of the market
itself, as the problems are understood as a result of the insufficient application of its mechanisms (FLETCHER,
2014). For Eric Swyngedouw (2010), this is a post-political discourse, as it presents a vision of the inevitability of

capitalism and the market economy as an organizational structure of the social order. The assessment shares the
premises of the criticism of the “green economy” in general, with a focus on political, ethical, and moral aspects (PAGE, 2013) and based on
notions such as justice and equity.

The wealth tax is a reformist smokescreen that crowds out revolutionary alternatives.
Capitalism is in crisis, and the plan is the key to control social anger directed against it.
ICT ’21 [Internationalist Communist Tendency; January 16, 2021; A separate group of likeminded non-
profit organizations all fighting for the cause of the exploited; “Wealth Tax: Expropriation of the Rich or
Capitalist Smokescreen?” https://libcom.org/article/wealth-tax-expropriation-rich-or-capitalist-
smokescreen] brett
Part One

A spectre is haunting Europe: the ‘Wealth

Tax’ (known in Italy as the Patrimonial). This joke sums up what has now become a stock
demand of so many of the "left", both inside and, above all, outside parliament and not just in Italy. By definition, a wealth tax is a
form of taxation aimed at the rich, particularly the very rich, via a progressive rate that increases with the level of inherited wealth itself. For
many this would be a measure of social justice: a means to redistribute some of the wealth that is presently concentrated in the hands of a few
to the most economically disadvantaged sectors of the population. This is especially important in the present period, dominated as it is by the
dramatic effects of the pandemic. In any case, its parliamentary supporters argue, this would by no means amount to a subversive manoeuvre
to expropriate the bourgeoisie. It would simply mean implementing a provision in the constitution, by which citizens must contribute to public
well-being in proportion to their economic circumstances.

Be that as it may, two deputies, Fratoianni of LEU (Liberi e Uguali, or Free and Equal) and Orfini of PD (Partito Democratico, or Democratic
Party), had their proposal for such a ‘wealth tax’ immediately rejected by the government coalition of which they are part and, needless to say,
by the centre-right, who rejected it for various reasons, not excluding some laughable ones, given the surrealist inconsistency of their
arguments. And, yes, the proposal was very moderate, especially since other taxes were being abolished — including the IMU (equivalent of the
Council Tax in the UK) on a second home. So, the proposal was for a tax of 0.2% starting from a base of €500,000, to reach 2% for assets over
€50 million. The number of people it would have affected varies with each estimate, but in any case it seems that it would have involved around
6% of taxpayers and garnered a tax revenue of more or less ten billion. It would have been similar to the measure taken by the Spanish "left"
government, which is also very timid, perhaps even more so; or that taken by the Bolivian left, which recently returned to government after the
parliamentary coup in November 2019.

The fact is that, despite its

timidity, the entire parliament did not even begin to consider a measure that, at most, would have only
gently relieved the super-rich of what amounts to no more than a bit of pocket-money. One more proof, if you like,
that despite all their talk about ‘the people’ and whose interests they claim to represent, the set of adventurers and parasites sitting on the
parliamentary benches actually only represent one class: the bourgeois one, starting at the top.

Then again, raising taxes on higher income/assets would mean reversing the fiscal policy followed by governments around the world for some
fifty years. Thus,

"if we had maintained the criteria of the time [up until 1974 — CB], today personal income tax rates would range from 12% to 86%, instead of
the current shameful range that goes from 23% to 43%." (Marco Bersani, ‘E' ora che paghino i ricchi’, Il Manifesto, 28 November 2020)

And in fact, ever since the 1970s taxes have been reduced for people in the highest income brackets, while they have risen for the lowest
earners. This is not surprising. In the face of reappearance of difficulties in the global cycle of accumulation, due to the fall in the rate of profit,
the bourgeoisie tries to compensate in every way it can. One of these is exactly to lower taxation of the rich (including capital, of course), at the
same time as asserting — at least that’s how it is presented — that if taxes are lowered at the top, the wealth saved will ‘trickle down’,
benefiting every social class, because entrepreneurs would start investing again, thus creating wealth for everyone. In terms of a certain formal
logic, such reasoning would be flawless, were it not for the fact that capital is only invested in the "real economy" when a rate of profit
adequate to the size of the investment and a particular organic composition is ensured. In practice, the level of investment remains low and the
money saved by tax relief mostly goes into financial speculation. In recent decades exploitation of the workforce has increased on all fronts
while the conditions of existence of the proletariat are becoming constantly worse. It may seem a paradox, but it is not, that this is not enough
to revive accumulation or, in other words, bring about a new phase of "prosperity". Lower taxes for the rich at the same time as increased
taxation for those who have least — the proletariat and part of the petty bourgeoisie — have contributed to the enormous rise in social
inequality, poverty and impoverishment, but "lower taxes for everyone” continues to be one of the most effective mantras for hypnotising the
electorate, even the “popular” one.

Yet, if this is the "fiscal doctrine" of so-called neoliberalism, there is a whole panoply of left-wing
reformists who are convinced
that doing the opposite, i.e. increasing taxes on higher incomes/assets, is the way to go to get out of the crisis and the
economic and social havoc caused by the coronavirus. Bigger tax revenues can be used to restore social services
(starting with health care), establish or strengthen forms of income support, especially for the unemployed and the
underemployed (the whole gamut of precarious existence), as well as "Greening" industry. The upshot will be a gigantic
increase in spending power and, therefore, an economic recovery on a fairer and more sustainable basis. All of this would, of
course, see a grand return of classic state capitalism, that is to say the direct management of certain key
sectors of the economy by the state.

Even in this version, however, bourgeois thinking is an empty boast, even if unwitting. Like their neoliberal counterparts, the left
reformists cannot see that the root of the crisis lies in the insufficient valorisation of capital. In other words, too low
an extortion of surplus value from the workforce. Both skip over the starting point and evade the basic question, which they
believe they can solve with a fiscal sleight of hand: now in favour of supply, now in favour of demand (to use bourgeois language). After years of
preaching ruthless "supply" policies (tax cuts for the rich, wage cuts, job cuts, etc.), promptly implemented by governments, the
IMF itself
is beginning to backtrack and now thinks that the profits of the most successful firms should be taxed
more to keep the world capitalist system on track, which includes helping the population at the bottom
of the social ladder to cope with the effects of the pandemic:

"This [the increase in taxes for rich] would help pay for essential services, such as health care and social welfare networks during a crisis that
has disproportionately affected the poorest segments of society." (ANSA, National Associated Press Agency in Italy, 14 October 2020)

If the IMF, a representative of “capital in general", says things that certainly irritate the "many capitals" (the individual bosses;
both expressions are used by Marx), it means that one of the thinking heads of the bourgeoisie, whose concern is for the overall
interest of the system, is worried about possible social explosions. However, the IMF is equally worried about the
not very encouraging economic outlook and for this reason, while it anticipates continued state intervention (and
central banks), it argues that state aid must be selective, i.e. it must go to companies who are able to stand on
their own feet, while the others — the so-called zombie companies — must meet their destiny, i.e. go bankrupt. In
fact, it envisages a decisive devaluation of existing capital according to the rules of "economic Darwinism" (survival of the
fittest), accompanied by selective state aid to "deserving" enterprises (another form of state capitalism) and by the implementation or
maintenance of social safety nets to prevent or control any outbursts of social anger. Naturally,
unproductive expenses will have to be cut as much as possible, starting, needless to say, with public sector workers.
Incidentally, the recommendations of the IMF are not very different from the conclusions of a document drawn up at the end of December by
the Group of 301 , of which Draghi is the best known exponent. They echo what the financier Soros has been saying for years, namely that to
hold together a company that is creaking on all sides, it is necessary for those at the top to start paying taxes at least at the same level as their
employees, who currently face a higher rate of taxation. Naturally, the most vulgar politicos, such as Salvini-style populists, regard Soros as a
reincarnation of the eternal Jewish plot to take over the world. Their ‘old fashioned’ pronouncements reveal the hatred and terror of so many
bourgeois that, if they were to pay ‘fair’ taxes, their profit margins would be reduced, along with their standard of living which would become
“beyond one's means”. So, it is doubtful that governments — sovereign or non-sovereign — can really clamp down their fiscal hand on the rich.
At stake, among other things, is the comfortable parliamentary seat that no "representative of the people" feels like risking by approving laws
which bosses of every description recognise as a smokescreen, even if they aim to preserve their social system.

Part Two

While the bourgeoisie is wracking its brains to find solutions to this epochal crisis, even considering a partial revision of the fiscal policies of the
last decades, the
tax lever has become one of the main tools which reformists on the left believe will put an
end to capitalist aggression and bring substantial benefits for the depleted pockets of the proletariat.
We are referring, of course, to the political elements gravitating around SiCobas, which has recently given birth to hybrid organisms with a
combination of union and political features. Even given the different acronyms, they are often animated by the same people with very similar,
or even exactly the same, programmes. From the Pact of Unity of Anti-Capitalist Action, to the Assembly of Combative Workers and others, a
shopping list of objectives to be achieved, here and now, has been drawn up. It represents "at best" the essence of radical reformism.

By its very nature, thisvision of the anti-capitalist struggle thinks that communism can make headway not only
within the current relations of production (and therefore of distribution), not only within the current political-institutional structures —
the capitalist state — but even in the midst of one of the most devastating crises in the history of capital.
It is an extremely harmful vision, one that is catastrophic for the purposes of the class struggle. First, because it has
nothing to do with the real world and, as they say, mistakes the desire for reality. Also, but not secondarily, because it entangles
significant fringes of the more combative or less resigned proletariat in these cheap illusions, let alone beguiling
various comrades and those who are sincerely convinced that this kind of "revolutionary trade unionism" (a contradiction in terms) is really
practicable. The "shopping list" is well known and, in any case, easily available online (for example, on the SiCobas website). It ranges from the
"guaranteed average wage for unemployed, underemployed, precarious and laid-off workers", to the classic "drastic and generalised reduction
in working hours for equal pay: work less, work for all; for socially necessary work”2 , up to a “Wealth Tax”, naturally much more drastic than
the one proposed by the centre-left parties. In fact, point 4 of the Action Pact document says: "The costs of the pandemic and the crisis must be
paid for by the bosses, starting with a 10% tax increase on the richest 10% of the population whose proceeds are to be used to cover 100% of all
wages and a guaranteed average wage for unemployed and precarious workers. Refusal to accept the state debt as an instrument to stifle
proletarian and social demands.” Apart from the fact that the state debt, rather than a tool to stifle proletarian and social demands3 , is a tool
to rob the proletariat and sections of the petty bourgeoisie, how could these measures be imposed on the bourgeoisie? Il Pungolo Rosso (Red
Spur), one of the components of the Pact and member of SiCobas, argues that it is possible "by attacking the power of the bourgeoisie with the
force of an extraordinary class mobilisation, to deprive them of their freedom to appropriate and dispose of the general wealth produced by
the proletarians”.4 What does "extraordinary mobilisation" mean? Strikes proclaimed two months earlier or perhaps, in a "more" incisive way,
all-out strikes, permanent marches, occupation of factories and companies in general? Depriving the bourgeoisie of the "freedom to
appropriate wealth ..." means killing it as a class, drying up the source that gives life to the capitalist mode of production, but at this point an
economic-trade union mobilisation, however extraordinary and radical, is grossly insufficient. "Taking over the streets" or "taking control of the
factory" is not enough if large sectors of the proletariat, the most conscious, do not take power: power, through its revolutionary organisms
(the councils), not the appointment of some minister in a ‘left’ government emanating from some bourgeois parliament. (It goes without saying
that for us the active presence of the revolutionary party in the class is indispensable, so that awareness of the need for the revolutionary leap
can mature inside significant sectors of it.)

History is full of examples where a magnificent proletarian surge was led by radical reformist pipers — it
doesn't matter whether in good or bad faith — to momentous defeats. From the factory occupations of a century ago
to the Popular Fronts of 1936 — to name some of the most painful proletarian defeats — an extremely determined
proletariat halted at the gates of the bourgeois state and then paid most painfully for the consequences. But this
is forgotten, or ignored, by the 21st century version of that socialist maximalism which has done so much harm to the
working class. They want to impose measures on the bourgeoisie that would constitute the first,
immediate measures of proletarian power. Yet it is never mentioned that first it is necessary to conquer
that power, break the capitalist state machine and replace it with organs of proletarian self-government, with the
dictatorship of the proletariat. On the other hand, once the proletariat has the strength to impose those "points"
on the bourgeoisie, it might as well directly seize power for itself.

Capitalist growth is unsustainable and existential. Decoupling is impossible.

Sorman ’23 [Alevgul; March 1; Research Fellow at the Basque Center for Climate Change; “Deceitful
Decoupling: Misconceptions of a Persistent Myth,” The Barcelona School of Ecological Economics and
Political Ecology, pp. 165-167, https://link.springer.com/chapter/10.1007/978-3-031-22566-6_15]

The long-standing tension revolving around the "possibility of decoupling" among the green growth versus post/de-growth
narratives has muddied the waters of tackling the climate crisis we are currently facing. These “decoupling wars” (Jackson &
Victor, 2019) have, on the one hand, been seeking to answer whether reductions in resource and energy use and respective emissions are
possible without modifying our accustomed growth trajectories. On the other hand, post/de-growth narratives argue for doing things
differently: urging for the reconsideration of a reduction of resource and energy dependency as objective in itself, valuing collective well-being
(People’s Conference on Climate Change and the Rights of Mother Earth, 2010) instead of indicators such as GDP as a metric to be maximised
(Costanza et al., 2014; van den Bergh, 2009) on a resource-constrained planet.

The recent COVID-19 pandemic has resurfaced the debate yet once again, creating yet another bifurcation in the road. The question remains on
whether we can achieve a post-COVID-19 green economic recovery (UNEP, 2020) based on assumptions of efficiency and decoupling while re-
growing; confronted with movements mirrored by globalised Fridays for Future or Extinction RebellionFootnote1 urging for profound
transformation in the way things are done to tackle the ecological emergency and breakdown (Monbiot, 2018).

The debate, albeit has occupied the agenda over decades in the form of the infamous Environmental Kuznets Curve (EKC) (Kuznets,
1955; Stern, 2004)Footnote2 and the IPAT formulaFootnote3 advocating for the possibility of a green economy. Such claims,
attempting to overcome “limits to growth” (Meadows et al., 1972) or the “spaceship earth” (Boulding, 1966) claustrophobia,
have been contested by many scholars and the ecological economics community (Martinez-Alier, 1995, 2012). Affluence,
capital accumulation (Hornborg, 1998, 2009), and accumulation by dispossession (Harvey, 2004) indeed occupy a significant
role in shaping our interactions between socio-economic systems and the environment (Scheidel et al., 2018).
Materials and energy flows (Fischer-Kowalski & Amann, 2001) help self-organize, maintain and develop internal
functions and structures of societies forming the backbone of our societal metabolisms (Giampietro et al., 2011; Şorman, 2014).
Nevertheless, societal metabolisms have associated socio-ecological interdependencies, mostly stemming from the unequal
distribution of ecological goods and services (Martínez-Alier, 2002). Studies indicate that even if the metabolisms of
industrial countries were kept stable at 2000 levels, for the rest of the world to catch up would result in a
quadrupling of global emissions by 2050 (Fischer-Kowalski et al., 2011). Moreover, the evolution of the global North-South
(McGregor & Hill, 2009) divide has reinforced commodity chains and extraction frontiers (Martinez-Alier et al., 2010),
manifestations of exploitative labour and trade relationships (Hornborg, 2020) surfacing via contentious political processes and powerful
multilateral institutions. Therefore, as previously argued, the win-win promise of a “ sustainability” scenario of letting humankind “have
our cake and eat it” (Rees, 1990, p. 435) has not been achieved in the last 30 years, despite all goodwill and green growth promises
with a decoupling intent.

The decoupling debate reappeared over the years in the form of eco-efficiency, eco-innovation, and the circular economy, fostering sustainable
consumption, especially relevant in the European Union’s Action Plans (EU Circular Economy Action Plan, 2020). The European Green Deal
(EGD),Footnote4 for example, aims to radically transform economic activities to make substantial progress towards creating a circular economy.
However, full circularity is unattainable since there is entropic decay in materials, as discussed in further detail in
Sect. 15.4. Moreover, the same notion is engraved within the Sustainable Development Goals (SDGs), where “Decent Work and Economic
Growth” (Goal 8) (United Nations, 2020), although inclusive and sustainable in principle, base their premise on an ever-increasing pie of
economic growth. However, the Barcelona School of ecological economics has long contested that developing growth-oriented policies
around the expectation that decoupling is or will be possible has been a misleading policy while also criticising the use of GDP as a
proxy for well-being (Ward et al., 2016). Recently, Hickel and Kallis (2020) have once again claimed that green growth is a misguided objective;
that absolute decoupling from carbon emissions is highly unlikely to be achieved at a rate rapid enough to prevent global warming over 1.5 °C
or 2 °C, even under favourable policy conditions.

In essence, decoupling has a foundational role within the Barcelona School of Ecological Economics and Political Ecology. First, due to the lack
of evidence in absolute decoupling between resource and energy dependency and growth (Parrique et al.,
2019), there is a crucial need to look at “how the world operates” and rethink alternative pathways of living within
planetary boundaries. This calls for new ways of doing economics which interrogates economic processes limited by biophysical
constraints both on the supply side in terms of resources and the sink side recognising environmental limits from the local to the
global. Second, decoupling (and its lack thereof) calls for scrutinising embedded societal relations that interrogate “why we do what we
do” that cover socio-political factors such as power dynamics, institutional arrangements, cultural variables, and
economic and financial drivers. These questions also explore the unequal access to and distribution of goods and services, benefits, and
burdens (Robbins, 2011) while inquiring into participation and decision-making mechanisms over how the world’s resources are (un)used.
Third, the absence of decoupling also calls for deliberation over individual and collective action on “how we envision alternative imaginaries” in
post normal times (Funtowicz & Ravetz, 1993). This means creating spaces and opening up the discussion for new actors and different futures
departing from the business as usual growth-based scenarios.

Along my academic journey – deeply rooted in the Barcelona school Ecological Economics and Political Ecology – I try to scrutinise these notions
of decoupling, having closely worked on energy metabolism, the study of energy flows that are required to sustain societies; energy justice
calling for a re-evaluation of ethical and gender concerns in energy decision making and my research on energy cultures, delving deeper on role
individual and collective behaviour toward energy in transformational research and action.

In the remainder of this chapter, Sect. 15.2 focuses on the different concepts of decoupling and system boundaries; Sect. 15.3 reviews and
synthesises further empirical evidence that analyses trends of decoupling both in terms of resources and emissions; Sect. 15.4 dissects claims
for a circular economy and rebound effects, a phenomenon closely observed during the COVID-19 global pandemic that goes hand in hand with
the decoupling narrative; Sect. 15.5 wraps up the discussion of decoupling as a deceitful narrative that is prolonged as a
persistent myth hindering genuine systemic and transformative change.
2 Different Decoupling Concepts and Accounting Mechanisms

Decoupling is typically categorised based on environmental pressures stemming from the production side, referring to resource decoupling
including materials, energy, and the less obvious water; and the impact side of our actions framed around impact decoupling including
greenhouse gasses, land, water pollutants, and biodiversity loss (Parrique et al., 2019).

Relative (or weak) decoupling indicates that the rate at which materials, energy use, or emissions increase is lower than the rate at
which GDP increases (Burton, 2015), or in other terms that the economic growth outpaces environmental impact. Although this may seem like
a favourable veneer, it still maps out as extractivism or greenhouse gases accumulating in the atmosphere, beating our overall target
to tackle climate change and live within our ecological boundaries in the long run. Already, the UNEP emissions gap report indicates (UNEP,
2019) that now in 2020, we need to reduce emissions by 7.6% per annum globally every year until 2030; otherwise, limiting
global warming to 1.5 °C will be a missed chance (see also (Patterson et al., 2018)). Similarly, the Production Gap Report (SEI et al.,
2019), assessing the world’s current pace of fossil fuel extraction to align with Paris Agreement goals, indicates that the world is to
produce far more coal, oil, and gas than is consistent with limiting warming to 1.5 °C or 2 °C, creating a
"production gap" that makes climate goals much harder to reach.

Absolute (or strong) decoupling, on the other hand, claims that economic performance behaves independently from
material or energy extraction or emissions. Newer terms extending the potential boundaries and glossary definitions of decoupling have
also been defined such as “virtual decoupling” (Moreau & Vuille, 2018) referring to developed countries outsourcing intensive
industrial production chains to lesser developed countries, also known as the carbon leakage phenomena. The role of increased
“tertiarization” (or dematerialization through services) (Heiskanen & Jalas, 2000) as a complementary angle also shifts attention
given to emissions, with the know-how (immaterial) sectors occupying a greater weight in the composition of the more "developed"
economies. Vadén et al. (2020) also argue that relationships between resources and emissions decoupling might not be so straightforward and
linear; such that there may be instances of material efficiency (Schandl et al., 2016) or a boost in “financialisation” (the role and weight of the
financial sphere within the economy) (Kovacic et al., 2018), which may all lead to somewhat decoupling with very different implications.

In terms of accounting for impact, discussions center around shifting current accounting mechanisms from one based on
territorial emissions (production-based accounting with GHG emissions assigned based on the source localisation) to one based on a
consumption-based accounting (CBA) (Lininger, 2015; Davis & Caldeira, 2010; Peters, 2008; Munksgaard & Pedersen, 2001). CBA, initially
used for Carbon Footprint measurements (Ireland, 2018), takes into account the outsourcing effect (Bastianoni et al., 2014); somewhat
internalising responsibilities based on re-integrating externalities. It is often argued that CBA should be mainstreamed in climate
policy for disclosing “real” corresponding emissions per country as it will serve for constructing policies with a holistic perspective for
crucial innovations (Wiedenhofer et al., 2020) for tackling the global climate emergency and ecological crisis. Approximate numbers
indicate that production-based emissions in the Global South are 10–15% higher than consumption-based emissions,
and vice versa for the Global North (Fuhr, 2019). Similarly, research illustrates (Wood et al., 2018) that approximately one-quarter of
the global land use (Weinzettel et al., 2013), 40% of materials (Wiedmann et al., 2015), 20–30% of global water use (Lenzen et al., 2013), and
over 20% of greenhouse gas (GHG) emissions (Peters & Hertwich, 2008) reside embodied in trade.

In terms of “truth-ful” accounting and defining adequate policy mechanisms based on political realities (Afionis et al., 2017) for tackling issues
of equity and justice appropriately and for proposing alternative exit strategies, such realities must urgently be confronted.

3 Results from Empirical Evidence and Reviews

Recent literature argues that there is little

or no evidence in terms of absolute decoupling looking into embodied energy
in trade, material consumption, resource use, and emissions.

Akizu-Gardoki et al. (2018) devise an alternative “Decoupling Index” that uses 126 countries’ total primary energy footprints
(rather than total primary energy supplies), taking into account embodied energy imported with goods and services. Within a
14-year period of analysis (2000–2014), the authors empirically show that 93 countries disprove decoupling; while 27 show
absolute decoupling for the analysis period, with only 6 countries (ESP, ITA, HUN, GBR, JPN, and FRA) with a Human Development Index of
0.8 above maintain absolute decoupling over time (ibid.).

Regarding global material flows covering over half a century of analysis (1950–2010) Schaffartzik et al. (2014) reveal that although
industrial metabolic profiles stabilize over time with equal shares of biomass, fossil energy, and construction minerals; they
are surpassed by other regions like Asia, replicating patterns of industrial growth engines. However, this does not translate into "per
capita" affluence or material consumption and instead adds to the growing bubble of global resource use and extraction (ibid.). On a similar
note, after an analysis of 40 years of resource productivity analysis Krausmann et al. (2017) summarise that althoughsome countries
may be decoupling in absolute terms, this value is cancelled out when trade is taken into account. Wood et al.
(2018) confirm that impacts embodied in trade, especially regarding material goods, led by clothing and footwear , are growing
tremendously, with energy and GHG emissions following in a less pronounced manner. Wu et al. (2018) highlight the
differences in a decoupling index, where “developed countries” primarily continue to develop high-tech and high-
efficiency GDP growth drivers, whereas “developing countries” have not undergone a transformation to absolute decoupling due to a
lack in energy efficiency measures, disorganised industrial structures, and absence of Information Technologies (IT) in capital investment. These
studies highlight a threefold causality: (1) we have lengthened commodity supply chains due to the abundance of readily available
transport fuel; (2) this has been made possible by notably shifting and outsourcing more significant impacts to developing regions
that take on primary extractive and secondary industries; (3) meanwhile, we have bought into the promise of circularity regarding the reuse of
materials. Hass et al. (2015) illustrate that circularity is low mainly because most materials are not available for recycling in the first place and
that the growth of materials injection into our systems outpaces any potential recycling attempt (See Sect. 15.4 for more details).

Similarly, recently conducted reviews of empirical research conclude no robust evidence regarding decoupling.
(For an exhaustive literature review of decoupling literature, see Parrique et al., 2019; Koirala et al., 2011; Mardani et al., 2019 among others).
The Decoupling Debunked document (Parrique et al., 2019) concludes that there is no indication of decoupling that is
absolute, global, permanent, and sufficiently fast and large enough both in terms of resources or
impacts. Likewise, a review of 179 decoupling articles (Vadén et al., 2020) that appeared between 1990 and 2019 concluded
with no evidence of economy-wide, national/international absolute resource decoupling and reckons that “the goal of decoupling
rests partly on faith.” A recent exhaustive review, composed of a bibliometric mapping of 835 peer-reviewed
articles (published in two parts, part I (Wiedenhofer et al., 2020) and part II (Haberl et al., 2020)) also highlight the need for substantial
advances in both theoretical and empirical research required while also being complemented by alternative goals and ambitions.

With unsuccessful robust and systemic evidence, reaffirming the findings of Hickel and Kallis (2020), absolute decoupling from resource
use cannot be achieved on a global scale against a global scale backdrop of continued economic growth.
In terms of accounting for emissions decoupling, a recent study by the Breakthrough Institute (Hausfather, 2021) highlights that 32 countries
have managed to demonstrate economic growth while CO2 emissions declined since 2005, even when accounting for emissions embodied in
the goods consumed in a country. However, they note with caution that these economies are already wealthy-service driven economies and
that very few examples are present from low- or middle-income countries based on extractive industries and energy-intensive manufacturing to
date. While this study can present a departure narrative of consumption-based emissions and absolute decoupling as we switch to clearer
technologies, we must not forget that extraction and resource dependence remain intact on the supply side – supplies and sinks being the two
sides of the same coin of the decoupling phenomena.

4 The “Not-So-Circular” Economy and Rebound Effects

The industrial economy is not as circular as claims make it be; but rather is entropic (Georgescu-Roegen, 1971) with the depletion
of low entropy materials from the environment, resulting in an accumulation of high entropy wastes and
exotic materials in the environment (Daly, 1992; Kerschner, 2010). This, also highlighted in a review of decoupling literature by
Wiedenhofer et al. (2020), is frequently disregarded in decoupling studies, where the phenomena itself is usually approached from a
statistical/econometric viewpoint, often overlooking thermodynamic principles of energy and materials and their core role and function in
defining societal metabolisms.

As Haas et al. (2015) show, on a global metabolism, only 6% of all processed materials are recycled, against the backdrop of
global material consumption increasing by 3.6% in a decade (Schaffartzik et al., 2014). These numbers only slightly improve for the
European Union amidst convincing circular economy narratives (Haas et al., 2015). Over half of the total solid material throughput in
economies (52% or 3.5 GT/year) (Giampietro & Funtowicz, 2020) is composed of either food or energy inputs that are subject to
entropic decay (especially in terms of energy quality). Only when biomass is included among the recycled solid flows, total circularity only
increases to 37% (Haas et al., 2015). The remaining 45% of materials that are used form the backbones of social systems,
becoming infrastructure and construction and “immovables” of societies; while only a minute percent of material flow, 3% or 0.7
GT/year, is associated with consumable and durable products (Giampietro & Funtowicz, 2020). Moreover, all of these social structures
and metabolisms come at the expense of ecosystem services at our disposal (Costanza et al., 2017), with water throughput
often ignored in stabilising socio-ecological systems (Giampietro & Funtowicz, 2020).

The COVID-19 pandemic and confinement period has also been an occasion to observe decoupling and rebounds (Alcott, 2005; Polimeni, 2012)
within societies adjusting to a dramatic, involuntary downscaling of socio-economic activities due to global lockdowns. In April 2020, in
comparison to 2019 values, daily global CO2 emissions had decreased by around 17% (Le Quéré et al., 2020). Values exhibited in the peak low
of emissions during COVID-19 were equal to those corresponding to 2006 values – 14 years ago (Canadell et al., 2020). However, several
months after, studies detected a rapid rebound (Harvey, 2020), and in 2021 global energy-related CO2 emissions are projected
to grow once again by 4.8% (IEA, 2021). It is often argued that decoupling is bound by temporal features such that
decoupling is usually followed by periods of no decoupling or even recoupling, making it a challenge for becoming a
permanent and continuous matter (Vadén et al., 2020; Williamson, 2021). The notion of rebound is also captured where in some
instances, the very act of solving environmental problems in itself spends resources and may even create additional problems that were
previously unthinkable (Allen et al., 2003).

5 Discussion and Conclusions

Most empirical literature and reviews illustrate little to no evidence of resource or impact decoupling in absolute terms
that is extensive and effective enough to be accepted as given. Moreover, when externalities are to some degree accounted for,
decoupling attempts are cancelled out by the impacts and consequences of trade or the exertion of built-in power
asymmetries and extractive frontiers prolonging the North-South divide and socio-environmental inequalities in terms of
benefits and burdens – primary research loci of the Ecological Economics and Political Ecology disciplines.

The study of decoupling needs to be scrutinized holistically, such that both demand-side and supply-side analyses go hand in hand.
For embarking on a transformative path, we require a holistic vision regarding tracing the origins of resources, internalizing
externalities, and, better yet, downscaling dependencies. This implies moving away from “certain” narratives (Lazarevic & Valve,
2017), like decoupling or the circular economy. Instead, the intersectionality of resource use and socio-ecological well-being needs scrutiny for
transformative policy and change. Recent directions for example taken by the European Environmental Agency (2021) evaluate alternative
narratives other than growth accepting a long-lasting, absolute decoupling of economic growth and environmental pressures.

Decoupling is not only a biophysical constraint or a matter of efficiency limited to the technosphere but rather is
one of distribution, one where far-reaching lifestyle changes (Wiedmann et al., 2020) complement technological
advancements and one which embraces principles of environmental and social justice (Parrique et al., 2019). Ivan Illich had alluded to
principles of sufficiency and justice in terms of putting limits to energy use back in the 1970s, where he recalled that a ceiling on energy use
could indeed bring upon social relations characterised with high levels of equity (Illich, 1974). Some studies argue that a 2–6 times increase in
sustainable resources at the global level would universally attain more qualitative goals (O’Neill et al., 2018); others (Millward-Hopkins et al.,
2020) indicate that in the year 2050, final energy consumption globally could be reduced to 1960 levels, despite a tripling in the population.

Pathways that entail less dependency on resources need to be formulated based on alternative policies that
comply with sufficiency-oriented strategies with strict enforcement of absolute reduction targets (Haberl et al., 2020). These, as such, may
promote alternative forms of existence like that of degrowth (Kallis et al., 2020) or other prosperous ways down (Odum & Odum,
2008) that link resource use and emissions to collective well-being rather than provoking ecological destruction. What is
clear, however, as per COVID-19 pandemic times faced with unprecedented conditions, we are indeed able to adapt genuinely and responsively
to change. Similarly, when tackling the climate crises and our dependence on resources, sufficiency for defining alternative futures is an
alternative worth considering. While technological advancements proceed in all sectors, behavioral and narrative
changes are crucial, if not more, in guiding this transformation.

Innovation has peaked for every technology.

Smil ’23 [Vaclav; February 16; professor emeritus of environmental science at the University of
Manitoba; Wall Street Journal, “Tech Progress Is Slowing Down”, https://www.wsj.com/articles/tech-
progress-is-slowing-down-b7fcaee0] KL

Title: Tech Progress Is Slowing Down

Nothing has affected, and warped, modern thinking about the pace of technological invention more than the rapid exponential advances of
solid-state electronics. The conviction that we have left the age of gradual growth behind began with our ability to crowd ever more
components onto a silicon wafer, a process captured by Gordon Moore’s now-famous law that initially ordained a doubling every 18 months,
later adjusted to about two years. By 2020, microchips had more than 10 million times as many components as the first microprocessor, the
Intel 4004, released in 1971.
Moore’s law was the foundation for the rapid rise of businesses based on electronic data processing, from PayPal to Amazon to Facebook. It
made it possible to go in a lifetime from bulky landline phones to palm-size smartphones. These gains are widely seen today as harbingers of
similarly impressive gains in other realms, such as solar cells, batteries, electric cars and even urban farming.

Bestselling tech prophets like Ray Kurzweil and Yuval Noah Harari argue that exponential growth will allow us to disrupt our way into a future
devoid of disease and misery and abounding in material riches. In the words of investor Azeem Azhar, creator of the popular newsletter
Exponential View, “We are entering an age of abundance. The first period in human history in which energy, food, computation and much else
will be trivially cheap to produce.”

The problem is that the post-1970 ascent of electronic architecture and performance has no counterpart in other aspects of our lives.
Exponential growth has not taken place in the fundamental economic activities on which modern
civilization depends for its survival — ag riculture, energy production , transportation and large
engineering projects . Nor do we see rapid improvements in areas that directly affect health and
quality of life , such as new drug discoveries and gains in longevity.
To satisfy Moore’s law, microchip capacity has increased about 35% annually since 1970, with higher rates in the early years. In contrast, during
the first two decades of the 21st century, Asian rice harvests increased by 1% a year, and yields of sorghum, sub-Saharan Africa’s staple grain,
went up by only about 0.8% a year. Since 1960, the average per capita GDP of sub-Saharan Africa has grown no more than 0.7% annually.

Growth rates in productive capacity have been similarly restrained . Most of the world’s electricity is generated by
large steam turbines whose efficiency improved by about 1.5% a year over the past 100 years. We keep making steel
more efficiently, but the annual decline in energy use in the metal’s production averaged less than 2% during the past 70 years. In 1900 the best
battery had an energy density of 25 watt-hours per kilogram; in 2022 the best lithium-ion batteries deployed on a large commercial scale had an
energy density 12 times higher, corresponding to growth of just 2% a year.

The impressively declining cost of solar photovoltaic cells (PVs) has raised expectations that we are approaching a breakthrough in solar
electricity generation. If the cost of PVs were the only determinant of the actual cost of power generation, solar generation would soon be too
cheap to meter. In reality, detailed U.S. data for residential PV systems show that the cost of the solar panels is now only about 15% of the total
investment. The rest is needed to cover structural and electrical components, labor, permitting and inspection, and taxes.

None of those components is tending to zero, and hence the overall cost of solar power—measured in dollars per watt of direct current
delivered—shows a distinctly declining rate of improvement. Between 2010 and 2015 it fell by 55%, between 2015 and 2020 by just 20%. Even
as the costs of renewable electricity generation have been plummeting, the three EU countries with the highest share of energy from wind and
solar—Denmark, Ireland and Germany—have the continent’s highest electricity prices.

The conclusion that progress is not accelerating in the most fundamental human activities is supported by a paper published in
2020 by the National Bureau of Economic Research. The authors, four American economists led by Bryan Kelly of the Yale School of
Management, studied innovation across American industries from 1840 to 2010, using textual analysis of patent documents to construct
indexes of long-term change. They found that the wave of breakthrough patents in furniture, textiles, apparel,
transportation , metal, wood, paper, printing and construction all peaked before 1900 . Mining, coal,
petroleum, electrical equipment, rubber and plastics had their innovative peaks before 1950 . The only
industrial sectors with post-1970 peaks have been agriculture (dominated by genetically modified organisms), medical equipment and, of
course, computers and electronics.

Even the rapid exponential growth of many microprocessor-enabled activities has already entered a more moderate expansion stage. Printing
with ever-shorter wavelengths of light made it possible to crowd in larger numbers of thinner transistors on a microchip. The process began
with transistors 80 micrometers wide; in 2021 IBM announced the world’s first 2-nanometer chip, to be produced as early as 2024. Because the
size of a silicon atom is about 0.2 nanometers, a 2-nanometer connection would be just 10 atoms wide, so the physical limit of this 50-year-old
reduction process is in sight.

Between 1993 (Pentium) and 2013 (the AMD 608), the highest single-processor transistor count went from 3.1 million to 105.9 million, a bit
higher than prescribed by Moore’s law. But since then, progress has slowed. In 2008 the Xeon had 1.9 billion transistors, and a decade later the
GC2 packed in 23.6 billion, whereas a doubling every two years should have brought the total to about 60 billion. As a result, the growth of the
best processor performance has slowed from 52% a year between 1986 and 2003, to 23% a year between 2003 and 2011, to less than 4%
between 2015 and 2018. For computers, as for every other tech nology before, the period of rapid exponential growth
will soon become history
Socialized innovation is vital to restrain converging existential risks.
Jodi Masters-Gonzales 20, Division of Global Leadership and Change, Graduate School of Education
and Psychology, Pepperdine University, "Plausible Futures of Socialized Risk: Integral Sustainability or
Globalized Dystopia?" Advanced Global Leadership Studies & Research, July 2020, pg. 2-22. //JDi

Contemporary corporate and governance structures do not go far enough to protect the public against the
socialization of market risks —particularly during states of globalized crises occurring with increased
frequency. While many have written about these problematic structures, this article introduces a novel concept of “transunity,” the
desired state of a globalized ecosystem that continuously leverages its collective intelligence in harmonious knowledge
production and innovation to achieve a shared strategic vision of integral sustainability . This article also
describes the required leadership capacity of State and institutional actors capable of leading such an incredible movement of change. What is
transunity? Simply put, it is a state of harmonious, yet sovereign, sustained globalized cooperation. The “blue moon” opportunity
for transunity arises amid rare catalyzing events that compound existential risks in the short- and long-
term, producing a level of destabilization so great, that only a dystopian future is plausible. The key
element for producing a transformative outcome is a shared vision extending beyond what is currently known and
seen as possible. This article has three goals: First, to explain the current state and its prevailing root causes, highlighting the failure of the
current neoliberal system. Second, to introduce and define the concept of transunity, a novel, complex state of harmony
enabled in a globalized system of governance whose optimal performance increases with heterogeneity.
Finally, the article examines plausible challenges at the edge of chaos—the phase of forming transunity—and the culturally diverse leadership
and institutional fortitude required to move into harmonious complexity and actualization of the moonshot vision.

Introduction

At the present moment, the world is in the grip of a global pandemic and economic crisis, the full effect of which will likely not be fully realized for years to come. Based on data from the
European Center for Disease Control (ECDC), as of July 26, 2020, there have been 644,832 confirmed deaths globally due to the Novel coronavirus (COVID-19), a total that is likely to be higher
than reported as testing and reporting capacity varies greatly across the globe (Roser, et al., 2020). Worldwide death projections from this pandemic also vary a great deal, with most
projections providing three main scenarios: mandated mask use, quarantine softening, and the mean between the two (Institute for Health Metrics and Evaluation, 2020). Massachusetts
Institute of Technology Data Scientist, Gu, projects that as of November 1, 2020, the mean number of deaths total will be 222,047 in the United States, 201,995 in Europe, and 660,183 in the
rest of the world for a total of 1,084,225 deaths worldwide (2020). Meanwhile, the World 12 Bank and others warn that the associated economic shutdown is already signaling “the deepest
global recession in decades” (Figure 1), with “emerging markets and developing countries” suffering the worst outcomes (Organisation for Economic Co-operation and Development, 2020;
World Bank, 2020ab).

Growth rates for emerging and developing countries were already slowing pre-COVID-19 and forecasts estimate major setbacks in accumulative output and production at negative eight points
over the next five years at a 90% confidence rate (World Bank, 2020b). It’s easy to forget that major decreases and production translate into unprecedented unemployment levels for millions
of people.

[Figure omitted]

Worldwide, second-quarter 2020 unemployment is predicted as high as 11.9% or 340 million jobs lost, affecting women the most as 40% of women work in the services sector (Figure 2), one
of the most gravely impacted sectors of this economic downturn (International Labour Organization, 2020). Other factors that impact women include participation in the informal workforce
which may not be included in these numbers, the difference between temporary job loss (where unemployment and other social safety net services are available) and permanent job loss, gaps
in gender pay, and employment which previously persisted, and the ever-present vulnerability of domestic workers which are overwhelmingly female and migrant in most cases. Last, many
women work as unpaid care workers. Any gains in gender equity are quickly deteriorating.

[Figure omitted]

The World Bank projects a contraction of -5.2% in the global economy due to key factors that include, extreme uncertainty and speed to which the pandemic has presented (underlying root
cause); "how deep, how wide and how synchronized” the recession has hit global economies as a group; a shock to developing countries where millions of people are already in extreme
poverty, and the additional loss of income will push more people into poverty with public resources already limited or insufficient; long-term negative effects for developing countries’ ability to
service their debt, attract foreign direct investment, create social safety nets and continue much-needed capacity building; and best-case economic scenario projections of a global contraction
of -4% are “devastating" (2020b). Projections from the Organisation for Economic Co-operation and Development (OECD) increase the global economic contraction estimate to -7.5% in the
event of a single wave and -9.3%, should a second wave of the pandemic emerge (Figure 3), nearly doubling the estimate of the World Bank in the worst-case scenario (2020).

Despite the devastating forecast in the near and long-term, researchers see a silver lining insomuch as this period may be an opportunity to rebuild in “unprecedented ways” (Ted.com, 2020;
Lu, 2020). So far, states and financial institutions are responding predictably as lenders of last resort. However, in the face of another global market failure, it is clear that global financial
governance coordination and reforms by states and international organizations (IOs), such as the United States, European Union, and the International Monetary Fund (IMF) over the last 12
years have done little to prevent the increasing chaos of the present moment (Momani, 2018, p. 591).

[Figure omitted]

Beyond the health and economic threats outlined previously, the spillover threat to the maintenance of international peace and security are
many. On April 9, 2020, before the UN Security Council, Secretary-General of the United Nations Guterres sounded the alarm about
eight specific risks that include, “the erosion of trust in public institutions, increased risks from terrorism
and bioterrorism , and worsening existing h uman r ights abuses” (Weiss et al., 2020, p. 36).

The Armed Conflict Location & Event Data Project (ACLED) tracks global COVID-19-related political violence and protest, from demonstration
activity, to state repression ; from mob violence to armed conflict (Zenevich et al., 2020). Figure 4 shows the current reported
conflict globally. Overcoming the current crisis peacefully relies on public trust and compliance.

[Figure omitted]

A report by the International Food Policy Research Institute (IFPRI) highlights the root causes of the current state and institutional
delegitimization which include polarization, conflicting expert information, miscommunication, abuse of power, and lack of accountability
(Resnick, 2020).

The Imagination of Collective Intelligence (CI) During Chaos

At an estimated and growing $9 trillion dollars of aggregate global emergency response spending and lending (Battersby et al., 2020), the
difference in state and IO policy and reforms underway underpin a growing global financial crisis and threat to the maintenance of world peace.
Who might assume the risk if and when this bubble bursts?

The 2008 financial crisis which represented the long-term outcome of mature neoliberal capitalism arose due to “an asset bubble of such great
proportions that it enable[d] a large part of the population to borrow and consume beyond its means” (Kotz, 2009). Katz estimates that
“another expansion, within the existing neoliberal model, would require a new asset bubble even more massive than the housing bubble, and it
is difficult to imagine how this could arise.” To what extent, if at all, might a debt bubble create a market failure this time around?

Might this pandemic and financial crisis be the unimaginable perfect storm to create the social-democratic, capital-labor compromise needed to
force government intervention in restructuring capitalism? (Haworth N. and Hughes, S., 2018; Kotz, 2009; Sinclair, 2018) Such post-
structuralism propositions of global governance highlight the “forms of organization and cooperation that exceed, and therefore fundamentally
problematize, the sovereign imaginary of politics” (Brassett, 2018, p. 195). Who will lead us through this crisis?

Mazzucato’s essay, The COVID Crisis is a Chance to do Capitalism Differently and subsequent TedTalk on the subject urges us to “Do everything
we can not to go back to normal,” arguing the current neoliberal capitalist system is what led us to the present three-factor (not two-factor)
state of unprecedented global crisis (2020; Ted.com, 2020). In addition to the health crisis previously discussed, she highlights the economic
crisis through the lens of problematic corporate and governance structures that perpetuate financial crises that end up “financing themselves”
with public funds enabled by problematic governments that do nothing more than fix their way from one market failure to the next.

This enabling environment further exacerbates the ever-present environmental crisis — while the rest of the
world is distracted by the health and financial crises, neoliberal capitalists and their apparatus lobby for emergency easing of regulations, tax
breaks, and other special accommodations that feed the aforementioned bubbles to disastrous additional
consequences (Centre for Research on Energy and Clean Air, 2020; Ross, 2020).
Experts agree that the root cause, at least to a high degree, is the underlying contracts that hold together the corporate-government-civil society ecosystem (Sinclair, 2020, p. 386, 388; Ted.com 2020). Reimagining this ecosystem will require market co-creation, argues Mazzucato, which
begins with a mindset of being “an active market shaper and co-creator [who develop] capabilities to create, to think outside of the box, to be dynamic and flexible.” She continues, “This agenda needs new economic theory and also curriculum for bureaucrats.” In other words, state and
institutional actors who are capable of leading incredible movements of change that inspire and engage from the bottom-up and top-down at the margin in co-creation through collective intelligence.

Harnessing Collective Intelligence of Non-State Actors

Collective intelligence (CI) was coined by Dr. Douglas Engelbart as a construct in the pursuit of high-performing organizations with “ever-increasing speed, agility, precision, and vision—extending beyond improvements to their perception and reflexes, to include boosting their reasoning,
memory, foresight, learning, and planning abilities as well” (Engelbart, 1994, page 10). Bootstrapping CI beings with people in an organizational unit (i.e., corporations, organizations, communities, even nations) with knowledge processes that produce a knowledge product (i.e., proposals,
plans, budgets, legal contracts) across domains in an ideal status wherein its current project status is transparent and available to all, leading to organizational memory and an evolving knowledge base, known as CoDIAK - the Concurrent Development Integration and Application of
Knowledge (page 12). CoDIAK is highly interdisciplinary and when cooperation exists between large organizations, it “puts new demands on knowledge-work interchange” (page 18).

It is not enough to have processes that produce knowledge within an organization, the key element is a vision to extend beyond what is currently known and seen as possible. The most successful outcomes possess a diverse cohort of contributors and collaborators who, in the present
context, collectively seek to dissolve the chaos, the “societal challenges that are characteristically volatile, uncertain, complex and ambiguous,” in co-creation (or co-design) locally and globally toward “integral sustainability” (Alfoqahaa and Jones, 2020; Laszlo, 2017; van Egmond, 2011).
Such a transdisciplinary approach to solving our present crisis of humanity, stemming from inequalities created by neoliberal capitalism, is urgent so that we may avoid an additional fourth crisis—increased conflict and violence which will further exacerbate the first three crises in a zero-
sum game, a game in which everybody loses (Schockman et al., 2019; Weiss and Wilkinson, 2017, p. 587-589; Aboelela, et al., 2007.)

Taking Interdisciplinary Visionary Leadership to a Global Transdisciplinary Context

Alfoqahaa and Jones (2020) present a compelling argument about what is required to lead sustainable equitable change during chaos, specifically the construct of cultural diversity leadership which can emerge in the context of any given time and space (p. 235). They propose a multi-level
model that mediates the two extremes of chaos and complexity theory through cultural diversity leadership, a process whereby a leader emerges and is sustained from the bottom-up and is able to simultaneously transform chaos (a state of cultural diversity conflict) into complexity (a
state of cultural diversity integration) from the top-down (p. 218).

Characteristically, the process of leadership emergence and sustainability is similar to Hollander’s “idiosyncrasy credits” whereby a leader’s legitimization is built and sustained on a form of social capital derived through common group membership which presumably assumes a high level
of cultural competency (Schockman et al, 2019, p. 5). Alfoqahaa et al. extend this concept to include the transformative power of the leader to mediate the conflict that is often present in the context of a nation, specifically, “relational, global and social paradigms [that are] a complex
social dynamic system” - the chaos into the complex state of peace through integration or an interdisciplinary approach (p. 218).

Their model shares interesting characteristics with Englebart and others’ frameworks of CI at the organizational unit level. Figure 5 integrates these frameworks into a single map, capturing the two key organizing elements of complexity (the harmonious state of integration), the catalyzing
event through which conflicted constituents may fall into cooperation (enter into collective dynamic) from which the leader emerges. “Leader tags emerge out of and owe their existence to interactive dynamics but they rarely create an interactive dynamic themselves; rather they are
produced by the dynamic” (Alfoqahaa et al., 2019, p. 236).

[Figure omitted]

Anticipating the need to move beyond an interdisciplinary approach to one that is transdisciplinary in nature, is what Engelbart (1994) foreshadows in the exponential benefit of the “knowledge-work interchange” scenario between two large organizations (applied in this context to
nations and/or international organizations) (1994, page 14). In this application, we propose the idea of transunity as opposed to integration as the desired complex state of harmony. If the pursuit is global governance that benefits multiple organizations simultaneously (i.e., nations or
other constructs of social worlds by Engelbart’s definition), might the aim be to generate a leadership-knowledge-work-interchange between them so that their CI output enhances their respective approaches and leadership in unity (not uniformity) accounting for their various
configurations, cultural contexts and stages of development over time (Jensenius, 2012)? Perhaps an open-ended construct of transunity (transdisciplinary) as opposed to intraunity (interdisciplinary)? The difference between examining the outputs (or transformations) which are
produced from the CI of social worlds as a whole and examining those produced from the CI of the network of social worlds that make up the whole? Thereby allowing us to transcend the time and space of the synchronic—and the diachronic of its parts as part of the whole as well (Cox,
R., 2018, p. 162).

The Way Forward

What might constructing the new normal look like? Park (2018) brings clarity to this question of international interaction, “Not only to highlight the role of IOs in classifying and categorizing the world but also in midrange theorizing alongside rationalist approaches to explain how norms
advanced by IOs and states intersect with material interests to create new categories of action” (p. 147).

To what extent, if at all, are IOs “changing the rules and norms” through CI toward equitable outcomes—or reinforcing existing ones to maintain the status quo?

A Changing World Paradigm?

The latest Congressional Research Report signals a conflict between the different policy approaches of the US and other actors, highlighting and expressing concern about the potential threat that these differences may, “inflict longer-term damage to the global economy by impairing
international political, trade, and economic relations, particularly between countries that promote nationalism and those that argue for a coordinated international response to the pandemic” (Weiss et al., 2020, p. 1).

This conflict in policy priority reflects, on one hand, culturally diverse leaders who have emerged through the collective dynamic (i.e., the Eurozone) in action realizing their collective output (response) to the catalyzing pandemic crisis is of greater value than if they acted alone, and on the
other hand, a charismatic leader (i.e., Trump) grounded in xenophobic nationalism in action through the CI of a much smaller organizational unit whose main interest appears to be self-preservation at the expense, exclusion, and accusation of “non-natives,” internally and externally (Betz,
2017; Immelman, 2017).

What questions and concerns might these challenges between existing alliances present in terms of overcoming this seemingly insurmountable crisis for the whole and sum of the world’s parts?

Increasing Debt Bubble

Weiss et al. also warm of a “solvency crisis,” particularly facing developing countries whose expense ratio is expected to double, increasing the likelihood of defaults due to high debt levels which, “could become ‘unmanageable’ and test the resilience of banks in some countries” (p. 7). To
make matters worse, the globe is pegged to the US dollar making the Federal Reserve Bank the de-facto global governor of fiscal policy, influencer of market mechanisms that have some corrective measures during a non-crises state, while also serving as a primary lender to central banks
who, if faced with illiquidity, will have no present way to meet emergency cash flow needs (p. 29).

Of concern is the “unsustained expansion” that neoliberal capitalism requires. Most Multilateral Development Banks
(MDBs) have more conservative fiduciary rules that underpin accountability contracts between states and IOs which should work, at least in
part, to protect the most vulnerable developing countries they serve. Sinclair asserts, “the essence of structured finance is to be found in the
legal rights to revenues organized in the contracts and trusts that underpin the securities... the [previous] global financial crisis has
not been kind to anyone, but it has highlighted the necessary and vital role of government in times of upheaval”
(p. 366, 388).

The US is in the process of pushing for fiduciary reforms which will allow for increased callable capital to dramatically increase the liquidity of four MDBs it is a member of—two at the World
Bank and two at the African Development Bank. This callable capital will support US interests through investment in infrastructure to fight terrorism, developing and opening markets for US
business interests, and “drive private sector investment and growth, promoting rules and policies around lending that are conducive to U.S. interests” (U.S. Department of the Treasury,
International Programs, 2020.) Figure 7 displays US levels of callable capital in its member MDBs for fiscal year 2019 (pre-COVID-19).

[Figure omitted]

These investments use callable capital without the reserve capital in hand (a concern that has to date not manifested, as no MDB has ever had to make this call.) However, Sinclair points to the
relationship between “narrow interests” and, “in times of crisis, such interests can make crises worse” (p. 389). To what extent, if at all, might current conditions of the crises create illiquidity
at MDBs, requiring a call on callable debt that may not be available? What or who makes up the “narrow interests” Sinclair warns us of in the current crises?

Perhaps the question is where—from where might these narrow interests emerge to “make crises better or worse?” To step into transunity or away from it? To illustrate this point, Weiss
(2020) explains how the North American Development Bank (NADB) was created in 1994 to mitigate concerns created by the increased economic activity of the North American Free Trade
Agreement (NAFTA), particularly concerns related to the environment (p. 1). Its main purpose is to fund public and private infrastructure projects on both sides of the border, which over the
last five years have strained its resources causing a change in credit rating requiring a higher capital adequacy ratio.

Competition from private finance, independent oversight to ensure technical, environmental, and social integrity along with changing executive administrations have resulted in current
legislation that has shifted project focus from green energy to fossil fuels and mandated financing reforms. These reforms are to “develop and implement efficiency improvements to
streamline and accelerate the project certification and financing process” (p. 3). Might the “where” be found in the processes of the collective dynamic? In the output of enabling contracts that
hold together the corporate-government-civil society ecosystem as Mazzucato argues (Ted.com, 2020)? In this case, enabling the status-quo of neoliberal capitalism and deterioration of an
institution whose contracts were conditioned to mitigate environmental risk?

Coordinated International Response

The Organisation for Economic Co-operation and Development (OECD) an IO of 37 member countries, called for “immediate, large-scale and coordinated actions” which included “(1) more
international cooperation to address the health crisis; (2) coordinated government actions to increase spending to support health care, individuals, and firms; (3) coordinated central bank
action to supervise and regulate financial markets; and (4) policies directed at restoring confidence” (Weiss et al., p. 34). Although this “call” isn’t a contract per se, it’s a first step in what
Mazzucato calls “joining the club to show you are part of the solution,” the entry point into what she also called the “dynamic capabilities of the public sector,” dynamic capabilities created by
CI (ted.com, 2020).

Mazzucato argues that market co-creation requires a shift from the mindset and system that enables
“lender of last resort outcomes” to outcomes that are created by being “investors of first resort” (Ted.com,
2020). She contends that in addition to creating value for the public through public investments and creating a return on
investment, these public investments must be mission-driven and project-based. An example of such a mission is the
European Central Bank (ECB) which in March 2020 reported its efforts to structurally focus, as part of its larger integration efforts in the region,
on green initiatives and investment to decarbonize European Union investment (2020). They are explicit in detailing their mission to “green”
the EU economy through green bonds and other measures which are more effective than traditional debt-based initiatives over time.

Figure 8 shows the relationship between shifting away from “brown” debt to “green” equity. Although it is a long-term vision, this move will
end up greening the entire region, from the economy to the environment; from jobs to industry; from the health and well-being of its citizens
to those around the world. It will create an enabling environment and model of CI that produces contracts and public benefit for those at the
local level to those at the global level.
[Figure omitted]

Germany is another example of an investor of the first resort in the green mission. In June 2020, German Minister of Economic Affairs and
Energy, Peter Altmaier, announced the acquisition of an approximate 23% stake in CureVac, a pharmaceutical company that has developed a
promising vaccine for COVID-19 (Bratulic, 2020). For Germany, this contract represents a move to protect its national security amid attempts
from Trump to make a deal with the company for exclusive US use, this corporate-government-civil society contract ensures that the vaccine
will be available to everyone at a reasonable market rate while creating a return on investment for the German public (Schüller, 2020).

Conclusion

How might the global network of social worlds (i.e., IOs, states, and non-state actors) leverage this catalyzing present
moment to lead us in a collective dynamic toward harmonious outcomes? Or are we destined for greater
chaos, conflict, and violence ? The proposed construct of transunity is characteristic of a type of shared governance—an
output of reimagined and co-created corporate-government-civil society global ecosystem— capable of enabling fluid, integral, and
sustainable unification despite catalyzing events that lead to chaos—greatly reducing the likelihood of
additional existential risks , such as market failures, war or mutual destruction.
Think tanks, international organizations, non-state actors, and global policy networks are examples of potentially influential culturally diverse
leaders engaged in CI throughout the world. One such institution is the University College London (UCL) Institute of Innovation in Public Policy
(IIPP), founded by Mariana Mazzucato in 2017 and known for its, “radical thinking about space, design, and sustainability.” IIPP is on a mission
to, “change how public value is imagined, practiced and evaluated to tackle societal challenges and
achieve economic growth that is more innovation-led, sustainable and inclusive” (UCL Institute for Innovation and
Public Purpose, n.d.). Mazzucato’s leadership and work have already influenced new policies in states and regions around the globe, from the
EU to the Vatican (Ted.com, 2020)

Growth causes nuclear war with Russia and China.

Cox ’23 [Ronald; November 20; Professor of Politics and International Relations at Florida International
University;
Studies in Critical Social Sciences, “Capitalism and Class Power,” vol. 270]

From the outset of the Russian invasion of Ukraine, the U.S.

national security establishment has unequivocally endorsed, with
Congressional bipartisan approval, over one hundred billion dollars in weapons sales to Ukraine that are intended to be used not
just to aid Ukrainian troops, but as part of a proxy war of the U.S. targeting Russia. A recent release of classified U.S. classified

documents has exposed the extent to which U.S. military and intelligence officials are directly involved “in virtually
every aspect of the war,” including identifying Russian targets (DeYoung, 2023). The direct engagement of U.S. military and intelligence personnel in
the prosecution of the Ukrainian War has escalated the conflict from a war of liberation to a possible nuclear war

between the U.S. and Russia. At the same time, the interests comprising the military industrial complex are
reaping outsized profits as a result of the escalation of U.S. weapons production, much of which will not even be
produced for years and therefore unable to help Ukraine, but is being added to the bill of U.S. taxpayers as part of the long-term costs of the war, including long-
term war-planning against Russia. Even before the war in Ukraine, the Pentagon was slated to receive $7.3 trillion over the next decade to pay for large-scale
weapon systems. That figure could easily rise to an additional trillion dollars of expenditures (over the next decade) based on a range of long-term big ticket weapon
systems that has been justified by the Ukraine War itself, most of which will never likely be used in the Ukraine War (Hartung and Gledhill, 2022; Klare, 2022).

As the Ukraine war continues, the U.S. has escalated its global campaign to wage economic, geopolitical, and geostrategic containment of China. Starting in 2017,
the Trump Administration identified China and Russia as the primary threats to U.S. national security. Even earlier, the Obama Administration identified China as an
increasingly hostile actor, which was based on an assessment of Chinese military, economic and political actions in Asia and globally. What is striking about these
developments is the relative shift from decades of U.S. economic and political cooperation with China. By the middle of the 2010s, U.S. foreign policy shifted toward
greater confrontation with China and less cooperation. What explains the pivot of the U.S. toward a more confrontational foreign policy strategy toward China?

For decades, the U.S. led the creation of a global neoliberal economic architecture that facilitated, rewarded, and encouraged an expansion of transnational
capitalist investment through global value chains. As part of this approach, U.S. policymakers supported giving China most-favored nation status and entering the
World Trade Organization. Transnational capitalist investors, especially in the information technology sector, lobbied U.S. policymakers to pursue policies that
lowered the costs of expanding global value chains to China, a process that I have written about extensively (Cox and Lee, 2012; Cox and Wartenbe, 2018). From the
early 2000s to the 2010s, China has been at the center of transnational globalization, partnering with transnational capitalist investors in a mutually profitable wave
of foreign direct investment strategies, focusing China’s economic policies toward an exportled growth model that has integrated China with Western financial and
investment markets.

The business and political coalitions in U.S. foreign policy advocating political and economic cooperation with China have been eclipsed from the mid-2010s to the
present. Global capitalist crises, starting with the 2008 global recession, have sharpened the tensions
between U.S. corporations who have long benefitted from locating their global value chains within the China market and those
corporations who have long felt threatened by the competition posed by Chinese exports (Cox, 2019). Meanwhile the
Chinese government has sought to exert more concessions from foreign investors and to increase the scope and scale of state intervention toward an upscaling of
Chinese capacity in 5G technology and artificial intelligence. An acceleration of Chinese nationalist political strategies in recent years, combined with the global
political and economic crises of the covid pandemic, have increased the costs of foreign direct investments for Western corporations. Corporations that have long
been in competition with China, especially in the steel and aluminum sectors, have aggressively led the campaign for sanctions against China (and were major
contributors to President Trump’s campaign). At the same time, interest
groups within the military-industrial complex, which
have long sought to identify China as a threat justification for higher military budgets, have identified an expansion
of Chinese military capacity and utilization, especially in the South China Sea, but also throughout East Asia, as a threat to U.S. extra-regional
hegemony in Asia (Grazier, 2021). The rise of China’s economic and military capacity in Asia and its long-term claim to the island of Taiwan, with newly rising military
maneuvers and tensions in recent years, has accelerated an increasing confrontational posture between the U.S. and
China (Grazier, 2022).
The national security establishment in the U.S. has used the threat of China to justify another round of large-scale increases in the U.S. military budget. At the very
moment when it appeared that lowering the military commitments associated with the war on terror would provide the space for reductions in military spending,
the China (and Russia) threats have been utilized as a broadbrush for justifying a new period of robust expansion in U.S. military expenditure. The U.S. could have
acknowledged China’s rise as an economic competitor and responded with its own government economic policies designed to fortify U.S. capacity to acquire,
develop and profit from 5G and ai technologies. That is certainly part of what the Biden Administration and the U.S. Congress has done with the chips Act, providing
large-scale subsidies to corporations locating their high technology production activities within the United States. However, the
U.S. government and
national security officials have not stopped there: the escalation of global sanctions against China that started under
Trump has intensified under Biden, alongside dramatic increases in military spending that has provided military

contractors with large-scale appropriations extending through the 2030s and 2040s, consistent with the expectation of prolonged

global military conflict with China. Indeed, the voices of the national security establishment, as well as both wings of the two U.S. corporate-
backed political parties, are increasingly (and openly) talking about war scenarios with China (Klare, 2022).

As with past escalations of U.S. military spending, this current escalation is very much tied to the agenda-setting
architecture of lobbying networks and think-tanks of the military-industrial complex, which has a profit-making interest in a hawkish diagnosis
of, and response to, the “China threat.” The public affairs database Quorum provides tracking of policy issues in the U.S. Congress through how often particular
mentions of issues occur within specified time intervals. There
have been spikes in references to “Chinese military” in
Congressional floor debates that have been especially pronounced from 2018 to the present. Similarly, use of the LexisNexis
database shows how articles focused on the “Chinese military” and threats posed by that military, have
increased dramatically in recent years, especially in the U.S. and Western press (Grazier, 2022).
The framing of the Chinese military threat, as it pertains to U.S. national security, is being led by think-tanks directly tied to the military-industrial complex, who are
well-represented in the U.S. Congress in terms of lobbies, campaign donations and networks that connect U.S. government officials directly to military contractors
when it comes to yearly appropriation decisions. These
think-tanks are the sources for Congressional testimony
pertaining to the “China threat,” and for news reports about the “China threat” (Grazier, 2021). In contrast, there is no comparable
alternative set of policy voices representing a different assessment of Chinese military power, capability, and intent. There is also an absence, or at least a very
limited presence, of any alternative think-tanks or scholars or activists who are recommending an alternative set of policy responses. The dominance of the military-
industrial complex is consistently unchallenged in legislative forums, executive branch deliberations, media coverage and cultural propaganda. As William Hartung
has noted, the influence of the military-industrial complex is at an all-time high, which in turn has kept military spending at the highest levels since World War ii:

Lobbying expenditures by all the denizens of the mic are even higher during the last two election cycles. Such funds are used to employ 820 lobbyists, or more than
one for every member of Congress. And mind you, more than two-thirds of these lobbyists had swirled through Washington’s infamous revolving door from jobs at
the Pentagon or in Congress to lobby for the arms industry. Their contacts in government and knowledge of arcane acquisition procedures help ensure that the
money keeps flowing for more guns, tanks, ships and missiles. Just last month, the office of Senator Elizabeth Warren (D-Mass.) reported that nearly 700

former high-ranking government officials, including former generals and admirals, now work for defense contractors.
While a few of them are corporate board members of highly paid executives, 91 percent of them become Pentagon lobbyists , according
to the report.
The MIC political and economic power structure has been fully institutionalized across all branches of the U.S.
government. The result has been a threat inflation that is almost never subject to serious public debate or scrutiny. This is
evident in the policy rhetoric about China, whose recent increases in military spending have still kept Chinese military
spending three times lower than the U.S. and nowhere near the global capacity of the U.S. military, especially when combining
U.S. military power with that of countries allied with the U.S. In fact, China’s focus on military expansion and modernization
is overwhelmingly focused on creating a “defensive buffer extending outward from the Chinese coast”
(Grazier, 2022). As a 2022 report by the Project on Government Oversight concludes, “In many discussions about China’s intentions, the
strategy is understood to create an exclusion zone inside the so-called ‘first island chain.’ This defensive line extends from
the southern tip of Japan through the Ryukyu Islands, past the western edge of the Philippine Islands, and then curls around the edge of the
South China Sea. Taiwan, notably, sits inside this line” (Grazier, 2022).

In contrast, the commentary emerging from well-entrenched MIC lobbying networks , think tanks and the Defense
Department extrapolate global ambitions and long-term global expansionism as the aim of Chinese military
spending. In this way, the current alarmist propaganda serves the same political and economic functions as previous MIC
propaganda. First, the China threat is escalated for domestic political purposes, to deflect attention from policy failures in
the U.S. by blaming China for these failures. This was evident during the global COVID pandemic (Layne, 2020). Second, the speculation
about Chinese long-term global military ambitions allows for a perpetual escalation of U.S. military
spending across the next few decades, including planning for hypothetical wars with China or with China
and Russia simultaneously (Klare, 2023). Third, the escalating U.S. military budgets lock-in U.S. discretionary spending overwhelmingly
towards war preparation and war itself, linking U.S. industrial policy to military spending and threat inflation, while
there is less room for social welfare spending or industrial policy that can be directed toward public
purposes. The emphasis is on focusing expenditures toward private sector military accumulation at public
expense, which satisfies financial investors who move large pools of money liberally around profitable investment opportunities.

The alternative is to expropriate the expropriators. A planned economy solves every

benefit to the 1AC, but would abolish taxes in favor of nationalization.
Thomas 23 [Orla; September 27, 2023; Edinburgh IMT; “Wealth taxes are no solution – we must fight
for revolution,” https://communist.red/wealth-taxes-are-no-solution-we-must-fight-for-revolution/]
brett
Dodgy dealings

Furthermore, even if such a reform was introduced, under pressure from the working class, the capitalists will always find a way
around any obstacles that stand between them and their profits.

In Norway, for example, the country’s billionaires and multimillionaires all moved to Switzerland when the country’s
wealth tax on the super-rich rose earlier this year. Closer to home, Liz Truss was quickly ousted from Downing Street with the help of the
markets, after her reckless economic antics caused panic amongst investors.

Or the bosses will simply avoid and evade such taxes altogether – often with help from their friends in
government.

The Tories are already assisting Jeff Bezos in his dodgy dealings, for example. Amazon has received corporate tax deductions to
the point of contributing nothing at all to the exchequer over the past two years, after the infamous multinational threatened to
move its operations elsewhere.
Expropriate the billionaires

This highlights
the main limitation of calls to ‘tax the rich’. At the end of the day, such reforms and regulations do
nothing to challenge the power and grip of the capitalists class.

As long as they own and control the means by which wealth is produced, we will continue to live under
a dictatorship of bankers and bosses. And inequality will continue to grow, as fortunes accumulate at one
pole, and misery accumulates at the other.

All of society’s problems, at root, are down to the laws and logic of the capitalist system – a system based on
private ownership, production for profit, and the anarchy of the market. Redistributing a slice of wealth
from the super-rich to the rest does nothing to upend this broken status quo.

To solve questions like homelessness, hunger, poverty, climate chaos, and more, we
need economic planning, not superficial
tweaks. But you cannot plan what you do not control. And you cannot control what you do not own.

The working class are the creators of all the wealth in society. Why should we not be the ones to own and
control it?

Instead of merely demanding higher taxes on the rich, therefore, workers

and youth must fight to expropriate the
billionaires; to take ownership of the big banks and monopolies; and to plan the economy along socialist
lines – for the many, not for the few.

On this basis, we
could do away with the parasites who plunder and hoard the wealth that we create, and
allocate society’s enormous resources rationally and democratically, in order to provide decent homes, jobs,
and services for all.
No more scrambling over crumbs. It’s time to demand the whole bakery, and fight for revolution.

Even if the ALT is not immediately effective, organizing around the communist party
provides an avenue to scale up mutual aid projects that solve their impacts in the
interim.
Escalante ’18 [Alyson, philosophy at U of Oregon. 08/24/2018. “Against Electoralism, For Dual
Power!” https://theforgenews.org/2018/08/24/against-electoralism-for-dual-power/] pat recut brett

I am sure that at this point, the opportunists reading this have already begun to type out their typical objection: the world is different
than it was in 1917, and the conditions of the United States in no way echo the conditions which enabled the Bolsheviks to achieve
revolutionary success.

To this tried and true objection, there is one simple answer: you are entirely correct, and that is why we need to
abandon electoralism and working within the bourgeois state .

What were the conditions which allowed the Bolsheviks to successfully revolt? The conditions were that of Dual Power.
Alongside the capitalist state, there existed a whole set of institutions and councils which met the needs of the
workers. The soviets, a parallel socialist government made up of individual councils, successfully took over many governmental
responsibilities in some parts of Petrograd. In the radical Viborg district, the Bolshevik controlled soviets provided
government services like mail, alongside programs that could meet the needs of workers. When a far right coup was attempted
against the provisional government, it was troops loyal to the Bolshevik factions within the soviet who repelled
the coup plotters, proving concretely to the workers of Petrograd that the socialists could not only
provide for their needs, but also for their defense.
In short: the Bolsheviks recognized that instead of integrating into the bourgeois state, they could operate outside of it to build dual power.
They could establish programs of elected representatives who would serve the workers. They would not bolster the capitalist
state in the name of socialism, they would offer an alternative to it .

masses were already to loyal to the Bolsheviks. The only party who had
And so, when the time came for revolt, the
never compromised, who had denounced the unpopular imperialist wars, who had rejected the provisional government entirely, was
the party who successfully gained the support of the workers.
And so, many of us on the more radical fringes of the socialist movement wonder why it is the the DSA and other socialist opportunists seem to
think that we can win by bolstering the capitalist state? We wonder, given this powerful historical precedent, why they devote their energy to
getting more Ocasios elected; what good does one more left democrat who will abandon the workers do for
us?

The answer we receive in return is always the same: we want to win small changes that will make life for
the workers easier ; we want to protect food stamps and healthcare .

And do this, we reply: what makes you think reform ism is the only way to do this. When the bourgeois state in California
was happy to let black children go to school unfed, the Black Panthers didn’t rally around democratic candidates, they
became militant and fed the children themselves. In the 40s and 50s, socialists in New York saw people going
without healthcare and instead of rallying behind democratic candidates, they built the IWO to provide
healthcare directly. Both these groups took up our pressing revolutionary task: building dual power .

Imagine if all those hours the DSA poured into electing Ocasio were instead used to feed the people of
New York, to provide them with medical care , to ensure their needs were met. Imagine the masses

seeing socialism not as a pipe dream we might achieve through electing more imperialists, but as a
concrete movement which is currently meeting their needs?
The fact is, we are not nearly ready for revolution. Socialists in the United States have failed to meet the needs of the people, and as long as
their only concrete interaction with the masses is handing them a voter registration form, they will continue to fail the people. Our
task
now is not to elect representatives to advocate for the people; it is much more gruelingly laborious than that. Our
task is to serve the people . Our task is to build dual power.
The movement to do this is underway. Members of the DSA refoundation caucus have begun to move the left of the DSA in this direct,
socialist groups like Philly Socialists have begun to build dual power through GED programs and tenants
unions, many branches of the P arty For S ocialism and L iberation have begun to feed the people and
provide for their concrete needs, and Red Guard collectives in Los Angeles have built serve the people
programs and taken on a stance of militant resistance to gentrification. The movement is growing, its time is coming,
and dual power is achievable within our life time.

The opportunists are, in a sense, correct. We are not where we were in 1917, but we can begin to move in that direction and dual power can
take us there. In order to achieve dual power we have to recognize that Lenin was right: there will be no socialist gains by working within state
institutions designed to crush socialism. Furthermore, we must recognize that the strategies of the electoral opportunists trade off with dual
power. Electing candidates drains resources, time, and energy away from actually serving the people.

And so, we should commit to undertake the difficult and dangerous task of building dual power. We
must reject opportunism, we
must name the democratic party as our enemy, we must rally around power directly in the hands of the
socialist movement. We do not have a parallel system of soviets in the United States. We can change that. Someday the cry “all power
to the soviets” will be heard again. Lets make it happen.

Framework: The affirmative must defend a worldview centering its justifications. The
negative can engage through an alternative worldview or opportunity cost.
1---Reciprocity: The AFF gets to weigh their research to justify the plan and can fiat
away political barriers to plan implementation, the NEG should get to critique that
research and imagine away barriers to the ALT.
2---Ground: You cannot separate form from content, in order to do something, you
must first believe in the desirability of your end goal which means our links to their
epistemological endpoint disprove the better world they’ve committed themselves to
for 6 minutes. Their interp artificially insulates them from testing.
3---Policy Relevance DA: scenario planning and cost benefit analyses operate on false
neutrality—turns debate into an engine for accumulation.
Jones 9 (Lee Jones, lecturer in International Relations at Queen Mary, University of London,
“International Relations Scholarship and the Tyranny of Policy Relevance,” Journal of Critical
Globalisation Studies, Issue 1 (2009))

However, the general complaint is a common enough refrain, not just in the US but in the UK – that academics must be
‘policy relevant’ in their choice of research topics, their research methodology, and the way they disseminate their findings to various so-
called ‘stakeholders’. In the UK, this imperative is reinforced by the bureaucratic diktat of the various government-backed
funding councils. It fits with the viewpoint enunciated since the 1980s that (a) the primary task of academics is
research and (b) academics must be ‘accountable’ for the way they spend public money. It naturally follows
from this that academics should do ‘relevant’ research (who would defend ‘irrelevant’ research?) which addresses itself to the contemporary
requirements of policy (or the economy – a subject for another time). Despite
acquiring a taken-for-granted quality, these
ideas are a very recent innovation . For centuries, the job of people staffing universities was primarily to
teach their students, not to conduct research . Then, only a few decades into an age where ordinary people could
aspire for the first time to become university students, suddenly the mission of universities underwent radical
transformation as governments refused might well be argued that the academy’s initial mission has actually been
usurped. Putting those questions aside for now, what of the broader relationship between the state and the academy? Let us concede that Nye
has a point, even if he is taking aim at the wrong targets. We should concede that academics are often poor at communicating their ideas to
society at large. All too often we are content to write for each other, knowing full well that our work will never be consumed beyond a narrow,
disciplinary clique. We need to do much better. Equally, however, there is no need to reduce this to the banal process of ‘knowledge transfer’
being promoted by the UK research councils, which seeks to justify research by appealing to its value to British firms. We should be trying to
communicate our work to our students, trade unions, citizens’ groups, non-governmental organisations, and citizens who are simply curious
about the world – not to improve companies’ balance sheets but to play a positive role in ‘cultivating our humanity’ as Seneca once urged
(Nussbaum, 1997). Nye also complains that the American Political Science Review never publishes policy-relevant articles – or even articles that
policymakers can comprehend. That is undeniably true, but the real problem here is actually one of methodology – which he hints at by swiping
at scholars obsessed with modelling. What he really criticises is the mania for quantitative methods and formal modelling that has gripped the
US academy and which is gradually infecting the British academy. The most influential IR journals, like Foreign Affairs, contain absolutely no
articles of a quantitative bent. There is no doubt that the average APSR article is impenetrable to any normal person lacking econometric
training, but this is not the only reason such research is not policy relevant: it is also because very few questions of major import actually lend
themselves to being studied properly in this fashion. Hedley Bull once commented that a commitment to quantitative methods is a
commitment to the ‘marginalia of the subject that are susceptible of measurement and direct observation’ (Bull, 1966, p. 363). The real
problem is that marginalia are increasingly the core of our discipline. This is clearly linked to the overall conception of social science to which we
subscribe – whether we believe people are like particles and can be studied using similar methods to those used in Physics. Our beliefs about
social science are influenced strongly by the overall political economy of research funding – Physics attracts the most funding as a ‘hard’
science; Economics models itself on Physics to attract the most funding in the social sciences; and the other, envious social sciences model
themselves on Economics. Physics undeniably generates a great deal of very useful research (although the constant push for immediately
‘useful’ research ‘outputs’ may well now be undermining ‘blue skies’ research that expands the limits of human understanding). Whether
Economics has done likewise is clearly open to debate, especially in light of the current global economic crisis. Ironically, IR scholars still labour
beneath the shadow of the work of Kenneth Waltz, who sought explicitly to import models used in Economics to understand the emergence of
a balance of power between states. At root this is a problem of all human knowledge being judged by a set of extremely idealised, monolithic
notions of how ‘science’ works.1 The more abstract and bizarre these models become, the more removed they become from reality, the less
impact they are likely to have on reality in turn. But the problem here is not ‘policy relevance’ – it is rather a two-fold issue: a far deeper
philosophical question as to what social science can accomplish and what it is for, combined with a funding structure which assumes the wrong
answer to these questions. Policy-relevant material will not be produced by the sort of exhortations Nye issues, but only by addressing these
two broader issues. Having conceded where Nye has a point, let’s now consider the ways in which he may simply be wrong. His assumption
is that the academic should be, needs to be, policy-relevant. As indicated above, this can be a very pernicious
assumption . As an invitation to academics to contribute to discussions about the direction of society and policy, no one could reasonably
object: those who wished to contribute could do so, while others could be left to investigate topics of perhaps dubious immediate ‘relevance’
that nonetheless enrich human understanding and thus contribute to the accumulation of knowledge and general social progress (and, quite
probably, to those scholars’ research communities and their students). As
an imperative, however, it creates all sorts of
distortions that are injurious to academic freedom. It encourages academics to study certain things, in certain
ways, with certain outcomes and certain ways of disseminating one’s findings. This ‘encouragement’ is
more or less coercive , backed as it is by the allure of large research grants which advance one’s institution

and personal career, versus the threat of a fate as an entirely marginal scholar incapable of attracting
research funding – a nowadays a standard criteria for academic employment and promotion. Furthermore, those funding
‘policy-relevant’ research already have predefined notions of what is ‘relevant’ . This means both that
academics risk being drawn into policy-based evidence-making , rather than its much-vaunted opposite, and that
academics will tend to be selected by the policy world based on whether they will reflect, endorse
and legitimise the overall interests and ideologies that underpin the prevailing order . Consider the
examples Nye gives as leading examples of policy-relevant scholars: Henry Kissinger and Zbigniew Brzezinski,
both of whom served as National Security Advisers (under Nixon and Carter respectively), while Kissinger also went on to become Secretary of
State (under Nixon and Ford). Kissinger, as is now widely known, is a war criminal who does not travel very much outside the USA for
fear of being arrested à la General Pinochet (Hitchens, 2001). Brzezinski has not yet been subject to the same scrutiny and even popped up
to advise Obama recently, but can hardly be regarded as a particularly progressive individual. Under his watch, after
Vietnam overthrew the genocidal Khmer Rouge in 1978, Washington sent tens of millions of dollars to help
them regroup and rearm on Thai soil as a proxy force against Hanoi (Peou, 2000, p. 143). Clearly, a rejection
of US imperialism was not part of whatever Kissinger and Brzezinski added to the policy mix . In addition
to them, Nye says that of the top twenty-five most influential scholars as identified by a recent survey, only
three have served in policy circles (Jordan et al, 2009). This apparently referred to himself (ranked sixth), Samuel
Huntington (eighth), and John Ikenberry (twenty-fourth).2 Huntington, despite his reputation for iconoclasm, never
strayed far from reflecting elite concerns and prejudices (Jones, 2009). Nye and Ikenberry, despite their more ‘liberal’
credentials, have built their careers around the project of institutionalising, preserving and extending

American hegemony . This concern in Nye’s work spans from After Hegemony (1984), his book co-authored with Robert Keohane
(rated first most influential), which explicitly sought to maintain US power through institutional means, through cheer-leading post-Cold War US
hegemony in Bound to Lead (1990), to his exhortations for Washington to regain its battered post-Iraq standing in Soft Power: The Means to
Succeed in International Politics (2004). Ikenberry, who was a State Department advisor in 2003-04, has a very similar trajectory. He only
criticised the Bush administration’s ‘imperial ambition’ on the pragmatic grounds that empire was not
attainable, not that it was undesirable , and he is currently engaged in a Nye-esque project proposing
ways to bolster the US-led ‘liberal’ order. These scholars’ commitment to the continued ‘benign’
dominance of US values, capital and power overrides any superficial dissimilarities occasioned by their personal
‘conservative’ or ‘liberal’ predilections. It is this that qualifies them to act as advisers to the modern-day ‘prince’;
genuinely critical voices are unlikely to ever hear the call to serve . The idea of, say, Noam Chomsky as
Assistant Secretary of State is simply absurd. At stake here is the fundamental distinction between
‘problem-solving’ and ‘critical’ theory , which Robert Cox introduced in a famous article in 1981. Cox argued that theory,
despite being presented as a neutral analytical tool, was ‘always for someone and for some purpose’. Problem-solving
theories ultimately endorsed the prevailing system by generating suggestions as to how the system
could be run more smoothly . Critical theories , by contrast, seek to explain why the system exists in the
first place and what could be done to transform it. What unifies Nye, Ikenberry Huntington, Brzezinski and Kissinger (along with the
majority of IR scholars) is their problem-solving approach. Naturally, policy-makers want academics to be
problemsolvers, since policies seek precisely to – well, solve problems. But this does not necessarily mean
that this should be the function of the academy . Indeed, the tyranny of ‘policy relevance’ achieves its
most destructive form when it becomes so dominant that it imperils the space the academy is
supposed to provide to allow scholars to think about the foundations of prevailing orders in a critical,

even hostile, fashion . Taking clear inspiration from Marx, Cox produced pathbreaking work showing how
different social orders, corresponding to different modes of production, generated different world
orders, and looked for contradictions within the existing orders to see how the world might be
changing.1 Marxist theories of world order are unlikely to be seen as very ‘policy relevant’ by capitalist
elites (despite the fact that, where Marxist theory is good, it is not only ‘critical’ but also potentially ‘problem-solving’, a possibility that Cox
overlooked). Does this mean that such inquiry should be replaced by government-funded policy wonkery?
Absolutely not, especially when we consider the horrors that entails . At one recent conference, for
instance, a Kings College London team which had won a gargantuan sum of money from the government
to study civil contingency plans in the event of terrorist attacks presented their ‘research outputs’ . They
suggested a raft of measures to securitise everyday life , including developing clearly sign-posted escape routes from
London to enable citizens to flee the capital. There are always plenty of academics who are willing to turn their hand
to repressive, official agendas . There are some who produce fine problem-solving work who ought to disseminate their ideas much
more widely, beyond the narrow confines of academia. There are far fewer who are genuinely critical . The political
economy of research funding combines with the tyranny of ‘policy relevance’ to entrench a hierarchy
topped by tame academics . ‘Policy relevance’, then, is a double-edged sword. No one would wish to
describe their work as ‘irrelevant’, so the key question, as always, is ‘relevant to whom?’ Relevance to
one’s research community, students, and so on, ought to be more than enough justification for academic
freedom, provided that scholars shoulder their responsibilities to teach and to communicate their subjects to society at large, and thus repay
something to the society that supports them. But beyond that, we also need to fully respect work that will never be
‘policy-relevant’, because it refuses to swallow fashionable concerns or toe the line on government
agendas . Truly critical voices are worth more to the progress of human civilisation than ten thousand
Deputy Undersecretaries of State for Security Assistance, Science, and Technology .
 Climate
Ambitious policies are not inevitable, but the plan jumps the gun.
Cochrane ’21 [John; November 19; Senior Fellow at the Hoover Institution, former professor of
finance at the University of Chicago; The Grumpy Economist, “A convenient myth: Climate risk and the
financial system,” https://johnhcochrane.blogspot.com/2021/11/a-convenient-myth-climate-risk-
and.html]

Pressed, advocates
will quickly admit that’s not what they mean. Instead, they say, they worry about the risk of
“stranded assets,” “transition risks,” losses in fossil fuel and other legacy industries.

Will environmental regulators, legislators, presidents, prime ministers, really fly back from Glasgow and pass
laws and regulations so onerous that they tank the economy and financial system? Well, they just might. But
then at least one might be honest and call it “climate-policy risk!”

But even this story does not pass muster. Climate-policy advocates are turning to financial regulation precisely because
presidents and legislatures, accountable to voters, are refusing to impose draconian carbon-killing
policies. It has some chutzpah, too: Carbon regulations might kill the fossil-fuel industry. So we have to. .
. kill the fossil-fuel industry first.

Limiting U.S. emissions is insufficient.

Zycher ’24 [Benjamin; March 19; visiting scholar at the American Enterprise Institute, a senior fellow at
the Pacific Research Institute, Ph.D. in Economics from UCLA; American Enterprise Institute, “Climate
Policy Is a Federal Issue,” https://www.aei.org/op-eds/climate-policy-is-a-federal-issue/]

The Honolulu lawsuit, like the others around the country, is meritless in its claims, first because U.S.
emissions alone are virtually
irrelevant as a component of global emissions. U.S. GHG emissions (in CO2 equivalents) from all fossil fuel
consumption in 2021 were about 4.6 billion metric tons, rising slightly to about 4.7 bmt in 2022. Global emissions
were about 41.3 bmt in 2022. If we estimate the climate effects of that U.S. GHG emissions share of 11.4%,
using the Environmental Protection Agency climate model under assumptions that exaggerate those effects, U.S. GHG
emissions would increase global temperatures in the year 2050 by 0.056°C. By 2100: 0.157°C. Even the
predicted impact by 2100 would be barely detectable, because the normal year-to-year variation (“standard
deviation”) in the surface temperature trend is about 0.11°C.

Trump destroys follow on---withdraws from Paris, unleashes fossil development,

destroys climate regulations.
Domestic action fails and modelling is impossible.
Scafetta ’24 [Dr. Nicola; March; PhD, Associate Professor, Department of Earth Sciences, University of
Naples Federico II; Geoscience Frontiers, “Impacts and Risks of ‘Realistic’ Global Warming Projections for
the 21st Century,” Vol. 15, Issue 2]

In fact, fossil
fuels continue to supply most of the inexpensive energy that is today used worldwide, which is
allowing developing countries to quickly raise their living and welfare standards. Indeed, while wealthy
Western Nations seek to phase out coal power plants and, in general, are attempting to substantially limit the use
of fossil fuels through impractical, expensive and unpopular rapid-decarbonization policies, the majority of
the rest of the world is significantly increasing their emissions (Crippa et al., 2023). In particular, China, India,
Indonesia, Japan and Vietnam, among other Asian countries, are constructing about 400 coal-fired power
plants and planning to build another 400 units in the future years (GEM, 2023). Furthermore, the rapid
depletion of critical metals required for a rapid shift from fossil fuel to renewable green-energies calls
the possibility of such a technological transition into serious doubt (Groves et al., 2023) and, in general, economic
meta-analyses indicate that the costs of implementing the net-zero policies required to meet the Paris climate targets
may outweigh the benefits even in the worst-case-scenario global warming (Tol, 2023). As a result, there is no
political agreement among world nations on how to manage future climate-change-related hazards.

World nations disagree on the actual threats, and, in fact, they prioritize different issues, likely because of
the scientific uncertainty about future climate changes, as well as of their potential impacts and associated
risks. The still existing large scientific uncertainty on this matter may lead to detrimental decisions either if a
climatic alarm is overstated or understated. Policy disparities among countries would make finding effective solutions to
potential climate-change-related hazards hard, while also risking harmful economic imbalances in the
interactions between and within states. It should be evident to all that if a few wealthy countries significantly
reduce their emissions while all the others significantly raise them, total emissions may not fall but, instead,
increase and climate change will not be mitigated. For example, net-zero emission policies are being strongly advocated in
the 27 nations of the European Union that, however, in 2022 contributed only 6.7% of the GHG global total emissions (Crippa et al., 2023);
moreover, in the year 2022 several EU countries – including Italy (6.70 t CO2eq/cap) and France (6.50 t CO2eq/cap) – produced GHG per capita
emissions less than the world global average (6.76 t CO2eq/cap).
 Finance
Economic decline doesn’t cause war.
Walt ’20 [Stephen; 5/13/20; Professor of International Relations at Harvard University; "Will a Global
Depression Trigger Another World War?" https://foreignpolicy.com/2020/05/13/coronavirus-pandemic-
depression-economy-world-war/]

On balance, however, Ido not think that even the extraordinary economic conditions we are witnessing today are going to
have much impact on the likelihood of war. Why? First of all, if depressions were a powerful cause of war, there
would be a lot more of the latter. To take one example, the United States has suffered 40 or more recessions since
the country was founded, yet it has fought perhaps 20 interstate wars, most of them unrelated to the state of the
economy. To paraphrase the economist Paul Samuelson’s famous quip about the stock market, if recessions were a powerful cause of war,
they would have predicted “nine out of the last five (or fewer).”

Second, states do not start wars unless they believe they will win a quick and relatively cheap victory . As
John Mearsheimer showed in his classic book Conventional Deterrence, national leaders avoid war when they are convinced it
will be long, bloody, costly, and uncertain. To choose war, political leaders have to convince themselves they can either win a
quick, cheap, and decisive victory or achieve some limited objective at low cost. Europe went to war in 1914 with each side believing it would
win a rapid and easy victory, and Nazi Germany developed the strategy of blitzkrieg in order to subdue its foes as quickly and cheaply as
possible. Iraq attacked Iran in 1980 because Saddam believed the Islamic Republic was in disarray and would be easy to defeat, and George W.
Bush invaded Iraq in 2003 convinced the war would be short, successful, and pay for itself.

The fact that each of these leaders miscalculated badly does not alter the main point: No matter what a country’s
economic condition might be, its leaders will not go to war unless they think they can do so quickly, cheaply,
and with a reasonable probability of success.

Third, and most important, the primary motivation for most wars is the desire for security, not economic gain. For this
reason, the odds of war increase when states believe the long-term balance of power may be shifting against them, when they are convinced
that adversaries are unalterably hostile and cannot be accommodated, and when they are confident they can reverse the unfavorable trends
and establish a secure position if they act now. The historian A.J.P. Taylor once observed that “every
war between Great Powers
[between 1848 and 1918] … started as a preventive war, not as a war of conquest,” and that remains true of
most wars fought since then.

The bottom line: Economic conditions (i.e., a depression) may affect the broader political environment in which decisions for war or
peace are made, but they are only one factor among many and rarely the most significant. Even if the COVID-19
pandemic has large, lasting, and negative effects on the world economy—as seems quite likely—it is not likely to affect the
probability of war very much, especially in the short term.

Blockchain technologies are functionally untaxable AND enable mass evasion.

Iacurci ’21 [Greg; May 31; Personal finance reporter; CNBC, “Cryptocurrency poses a significant risk of
tax evasion,” https://www.cnbc.com/2021/05/31/cryptocurrency-poses-a-significant-risk-of-tax-
evasion.html]

Virtual currencies like bitcoin and ethereum, which are collectively valued around $2 trillion, offer investors a way to
shield income from tax authorities.

In that way, the crypto economy contributes to the U.S. “tax gap” — the difference between tax paid and tax owed,
according to the Treasury Department. The White House estimates a $7 trillion gap over the next decade.
The Treasury seems particularly concerned about wealthy Americans who shift taxable assets into the crypto economy to
avoid tax.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly
including tax evasion,” according to a Treasury report issued last week, which outlined the Biden administration’s tax-compliance
agenda.

Crypto tax evasion

But just how does cryptocurrency lead to tax evasion?

It largely comes down to lax reporting requirements, according to tax experts.

The IRS may not be able to trace crypto income or transactions if they go unreported by exchanges,
businesses and other third parties. And that means the income may not be taxed.

“No one has put out clear rules on it, so there’s a lot of non-reporting going on,” according to Jon Feldhammer, a
partner at law firm Baker Botts and a former IRS senior litigator.

“Any time you create a path of non-reporting, you create a way to benefit from tax fraud in an
untraceable or a much-harder-to-trace way,” he said.
Crypto is fast becoming an alternative to cash as more merchants accept bitcoin and other virtual currencies as payment. But cash is more
heavily regulated.

For example, a business that receives more than $10,000 in cash from a customer must file a currency transaction report. This may happen if a
consumer buys a car for more than $10,000 in cash, if someone wins big at the casino or if a bank receives a hefty cash deposit.

These reports tell the government that a buyer has lots of money that may or may not be reported on a tax return.

But the same rules don’t apply to crypto. A used-car business that receives $20,000 of bitcoin from a customer doesn’t have to
file a currency transaction report; that income may also go untaxed if it’s unreported on the business owner’s tax return, Feldhammer said.

“Despite constituting a relatively small portion of business income today, cryptocurrency transactions are
likely to rise in importance in the next decade, especially in the presence of a broad-based financial account
reporting regime,” the Treasury report said.

Plus, virtual
currencies don’t have to be bought or sold through an exchange, making those transactions more
opaque to government officials.

The IRS is overwhelmed and non-functional.

Wilber ’21 [Pinar; May 24; Executive Vice President and Chief Economist of the American Council for
Capital Formation; The Hill, “Overworked and Underfunded, IRS Struggles to Carry Out Core Mission,”
https://thehill.com/opinion/finance/554914-overworked-and-underfunded-irs-struggles-to-carry-out-
core-function]

Last week, the Internal Revenue Service (IRS) was inundated with millions of returns from taxpayers who received a brief
reprieve with the 30-day extension of the tax filing deadline to May 17. While nobody professes love for the IRS, it is important to recognize the
government agency that has been working tirelessly since the beginning of the COVID-19 pandemic and has shouldered a much-expanded
workload. While more than 158 million American households wait for the latest round of stimulus checks administered by the agency, the IRS
also continues with its usual tax administration duties. Not surprisingly these herculean tasks have highlighted the agency’s
prior struggles and needs, drawing the attention of both the Biden administration and Congress.
Over the years, even
before the pandemic, various reports have discussed how recent budget and staffing cuts have
impacted the effectiveness and quality of certain IRS services. According to some estimates, the agency’s budget has
fallen by 20 percent in inflation-adjusted dollars since 2010, resulting in the elimination of 22 percent of its staff.
At the same time, the number of taxpayers has grown, and shifts in global economic structures have
resulted in changes to the mix of income sources the agency has to deal with. These changes have made
it more difficult for the IRS to effectively carry out its core function of revenue collection. A just-released
paper by the American Council for Capital Formation highlights some of these issues.

Why do we care about the agency’s resources? To answer this question, we need to remember three important duties the agency is tasked
with: Tax return processing, taxpayer service and enforcement. They have additional duties such as drafting regulations, conducting criminal
investigations and overseeing tax-exempt organization and qualified retirement plans. But among all these, probably the most important duty is
revenue collection and enforcement, to which the IRS devotes a big chunk (almost 40 percent) of its operating budget. The agency’s goal is to
collect the revenue due within the legislative framework provided and ensure that the appropriate level of revenue is collected by minimizing
under-reporting and tax evasion.

However, in line with budget cuts, the chances of being audited has decreased over the years, increasing the tax
gap (the difference between tax liability in a given tax year and the amount paid) and potentially missing out on a significant amount of
revenue. According to most recent figures, when all the taxes are factored in, the tax gap was estimated to be $441 billion for tax years 2011-
2013, before enforcement. In a recent three-hour appearance before the Senate Finance Committee, IRS Commissioner Charles Rettig
reiterated the importance of enforcement by estimating the tax gap in coming years. Partly due to the growth of cryptocurrencies and foreign
source income, the estimated tax gap may be much larger than previously estimated, potentially passing $1 trillion per year in the coming
years.

Another paper, published by the National Bureau of Economic Research, highlights the importance of the tax evasion, especially at the top of
the U.S. income distribution. The data
show that random audits underestimate tax evasion at the highest income
levels, especially due to the prevalence of offshore accounts and income from pass-through businesses
in this income group. If the unpaid federal income tax of the top 1 percent were to be collected, the authors estimate that an additional
$175 billion in annual tax revenue could be generated.

No stranded assets.
Skinner ’21 [Christina Parajon; 2021; Assistant Professor, The Wharton School of the University of
Pennsylvania; Vanderbilt Law Review, “Central Banks and Climate Change,” Vol 74:5]

Some predict that climate risk is precisely such an unknown risk lurking on bank balance sheets.96 Presently,
however, there are reasons to think a climate-contagion scenario relatively unlikely. 97 For one, there is the
factual question of how much exposure to such assets really does exist on banks’ balance sheets. As just discussed, a review of big
banks’ balance sheets shows that they are not, in fact, heavily exposed to “carbon-intensive” assets, like oil
and gas or auto company loans.98 And evidence gathered by the Basel Committee indicates the market is already increasingly
pricing in climate risk.99
[[FN 99]]

99. As the Basel Committee notes, there are a number of data points suggesting that the market is moving away from climate-related credit
risk, even in the absence of more forward-leaning central bank interventions; this evidence includes, for example, that “financial markets may
be beginning to price in transition risks for corporates,” “investors may already be demanding compensation” via a “carbon
premium” for certain assets, and “flood risks and rises in sea levels may already be partially priced into selected
residential real estate valuations.” BASEL COMM. ON BANKING SUPERVISION, supra note 33, at 17. Further evidence suggests that
“banks reduce exposures to climate-sensitive assets once identified,” “that some banks improve their capital positions
following repeated natural disasters,” and “that banks are starting to mitigate their exposure to transition risk drivers.” Id. at 29. The U.S.
banking system is further buffered from climate-related credit risk thanks to the depth of its capital
markets which afford banks’ options for securitization, hedging and derivatives products, which enables them to spread out
their exposure to climate risk. See id. at 27–31. This is seen by the Basel Committee as a helpful “[m]itigant[ ]” to climate risk. Id. at 27–28.
[[END FN 99]]

Banks have sufficient buffers to cushion losses.

Skinner ’21 [Christina Parajon; 2021; Assistant Professor at The Wharton School of the University of
Pennsylvania, J.D. from Yale Law School; Vanderbilt Law Review, “Central Banks and Climate Change,”
Vol. 74, No. 5]
On average, large BHCs lend at around fifty percent (or lower) LTC/LTV. 67 This means that a big bank’s loan is very unlikely to become impaired
unless the borrower’s cost of doing business increases by fifty percent (where the LTC measure was used) or the value of its collateral declines
by fifty percent (where the LTV measure was used). Accordingly, a corporate or home borrower would have to realize losses of fifty percent or
more due to physical or transition risks in order for climate change to have reduced the quality of asset values on a bank’s balance sheet.68
More on this to follow.69

[[Footnote 68-9]]

68. The stranded asset problem seems even more remote where securitization is concerned. Again, understanding underwriting
is important. By virtue of that process, banks are likely to have very few incentives (let alone approvals from their
risk committees) to securitize pools of loans to, for example, coal companies (or from analogously carbon-concentrated
pools). To do so would defy the very purpose of securitization—risk and geographic diversification. For that reason, it
seems equally improbable that a bond would be rated investment grade, thereby limiting demand for such a
product. Moreover, given the growing investor-driven consensus that financial institutions should step away
from carbon-facing assets, demand will likely be quite small. See Christopher Flavelle, Climate Change Poses ‘Systemic
Threat’ to the Economy, Big Investors Warn, N.Y. TIMES (July 21, 2020), https://www.nytimes.com/2020/07/21/climate/investors-climate-
threatregulators.html?referringSource=articleShare [https://perma.cc/23S5-5TQN].

69. Some researchers have

claimed that that “[w]hile accurately-priced risk and returns are part of the typical formula for financial
portfolio composition, the
mispricing of mortgage risk, carried onto securitizers’ balance sheets, can be a source of
unhedged and unanticipated systemic risk.” Amine Ouazad & Matthew E. Kahn, Mortgage Finance in the Face of Rising Climate Risk 7
(Nat’l Bureau of Econ. Rsch., Working Paper No. 26322, 2019) (citation omitted),
https://www.nber.org/system/files/working_papers/w26322/w26322.pdf [https://perma.cc/L8AV3U8U]. However, securitization is subject
to much more robust underwriting now as well. Banksare now much more incentivized than they were before 2008 to
conduct due diligence on the loans that they packaged in securities. Specifically, post-2008 crisis reforms now require
banks to retain a five percent first-loss or ‘vertical’ piece of any securitized bond that they sell. This forces banks
to keep some “skin in the game,” by ensuring their diligence and underwriting practices are robust to any and all manners of risk
associated with the loans that form the basis for a securitization.

[[END Footnote 68-9]]

Perhaps most squarely to the point, it appears that banks may not presently hold sufficient concentration of carbon-
intensive credit assets for physical or transition risks to threaten their solvency. 70 Consider a snapshot based on existing
data. These big bank balance sheets are geographically and sectorally diversified.71 Consider recent data from the
balance sheets of the largest, most systemically important banks. For example, at year end 2019, JPMorgan Chase had $41,570 million in
wholesale credit exposures in its oil and gas portfolio.72 While that number seems enormous, it is 4.6 percent of that bank’s total
credit exposure. (That number decreased to $37,516 million by the end of 2020.73)

At the
highest range is Citigroup, whose credit exposure in the energy and commodities industry constitutes around seven
percent of its total credit exposure for its corporate credit portfolio.74 Yet other globally systemically important banks
such as Wells Fargo, BNY Mellon, and Barclays fall at the lower end of the four to seven percent exposure
range in their portfolios (when looking at their exposure to the oil and gas industry respectively).75 Meanwhile, the amount of equity
capital available to absorb loan losses is triple or quadruple credit exposure at all of these big banks.76
Taking automotive industry loans into account changes these banks’ exposure slightly, but not significantly. 77 For example, JPMorgan’s and
Wells Fargo’s wholesale credit exposure increases by less than four percent each, while Citigroup’s credit exposure increases by 6.86 percent.78
This remains true even when panning out wider to account for loans across the entire transportation industry. Including transportation
increases JPMorgan’s credit exposure by less than two percent, Citigroup’s by less than four percent, Wells Fargo’s by around 2.5 percent, and
Barclays’s around one percent.79 Banks are otherwise diversified across a range of sectors: real estate, consumer and retail, technology,
industrials, asset managers, banks and financial companies, healthcare, utilities, state and municipal governments, automotive, chemicals and
plastics, metals and mining, central governments, transportation, insurance, securities firms, and financial market infrastructures.80

Events of 2020 lend support to the narrative suggested by the balance sheet data discussed above. Specifically, in spring of 2020, large
banks faced historic declines in oil prices (which fell below zero dollars) thanks to COVID-related shelter-in-
place orders. 81 While banks suffered some losses on their wholesale credit portfolios connected to the oil and gas industry,82
their soundness or solvency did not come into question.83 Indeed, the Fed’s own data shows no statistically significant increase
in nonperforming loans between Q4 2019 and Q1 2020 for the largest banks84—for further context, while nonperforming loans were at about
one percent of these banks’ balance sheets after these events of 2020, shortly after the financial crisis of 2008 they hovered around 3.5
percent. 85 These recent events—and banks’ balance sheet reactions—suggest that even
significant exogenous climate-related
shocks cannot so drastically impair asset quality so as to push banks toward insolvency. 86 The lesson here is
that where banks remained resilient, in accordance with Basel III requirements, they have been able to withstand significant
exogenous shocks.

[[Footnote 86]]

86. It is also worth noting none of these banks approached insolvency following previous “billion-dollar” natural disasters
that occurred between 2004 and 2012, including Hurricanes Katrina, Irma, and Sandy. Ouazad & Kahn, supra note 69, at 4.

[[END Footnote 86]]

It is also unclear whether transition risk will undermine bank soundness. Well-managed
banks continuously adjust for changing
credit and market conditions, and thus generally prepare for a certain amount of credit losses in a given year. 87
Climate-related risks are likely to be no exception. Indeed, several large banks have already begun to factor climate-related risks
into their underwriting process. As Citigroup explains in a 2019 quarterly report, it “has incorporated environmental factors like climate risk
assessments and reporting criteria for certain obligors . . . . Factors evaluated include consideration of climate risk to an obligor’s business and
physical assets and, when relevant, consideration of cost-effective options to reduce greenhouse gas emissions.”88