The political economy of the Climate Law: Changing the system, not the climate!

We are currently experiencing multiple crises (polycrisis). (Those interested can read our column on this subject dated July 17, 2023, titled "Global Risks: Polycrisis and Permacris." This multiple crisis also has the characteristic of permacrisis, or sticky, permanence! Within the context of this multiple crisis, one of the crises is the ecological crisis. Climate change is at the forefront of today's risks related to the ecological crisis. Of course, there are those who deny the climate crisis, both on the right and the left! According to documents that emerged later, deniers, especially on the right, were funded by the oil and coal lobbies (Exxon, coal giant Peabody Energy, etc.), and whoever paid the piper was calling the shots. A long-term study of carbon dioxide levels in nature over thousands of years reveals that the rise in the last 200 years has never been seen before. In other words, it's a green swan (like a black swan!). Because this problem is global, the solution must also be global. However, when looking at climate change from a class perspective, the system causing this problem is capitalism. Industrialized capitalist countries bear primary responsibility for this crisis. The cowboy economy, embodied in the consumer economy, has led individuals to a perverse understanding of happiness along the lines of "I consume, therefore I am." However, in the dilemma of "To Be or to Have," as E. Fromm called his famous book, quality of life can be enhanced not by having, but by being.

While international cooperation is being carried out in the context of this global solution, countries are undertaking to reduce their carbon emission levels through green transformation and gradually reduce them to zero.

For this reason, countries are preparing various legal regulations. In our country, Climate Law No. 7552 was enacted upon publication in Official Gazette No. 32951, dated July 9, 2025. This law appears to have been drafted taking into account the obligations and responsibilities arising from international agreements (such as the Paris Agreement, the UN Framework Convention on Climate Change, and the European Green Deal).

OVERVIEW OF THE LAW

In this law, some concepts (e.g., net zero emissions, just transition, climate justice, etc.) were defined, some concepts (carbon credits, emissions trading system - ETS -, allocation, green taxonomy, etc.) were brought into line with the legal language, and some market-based instruments (embodied emissions, carbon pricing instruments, sinks, etc.) were outlined.

The law provides legal status in environmental law for provisions such as the national contribution declaration, local action plans, and coordination boards. In fact, this law regulated the ETS for the first time. A pilot implementation period was designated for the ETS.

The regulations are an interdisciplinary field, encompassing environmental law, administrative law, energy law, and economic law, as well as other areas. Efforts have been made to structure the balance of authority and responsibility in accordance with the principle of public interest. Efforts have been made to institutionalize the carbon market within the framework of the rule of law.

WHAT DOES THE LAW NOT BRING AND WHAT DOES IT TAKE AWAY?

There are no binding transformation targets in the law! If anything, it's emissions trading! This aims to provide relief to the iron and steel, cement, electricity, fertilizer, hydrogen, and aluminum sectors, which will be subject to carbon tax burdens due to the EU Green Deal (Border Carbon Adjustment)! Well, when emissions trading expands, the money will surely be wasted! Can the law reduce greenhouse gas emissions? Where? Our country is obsessed with energy imports: 99 percent of gas, 90 percent of oil, and 50 percent of coal! Do we have a strategy for abandoning fossil fuels, transitioning to domestic and renewable energy, and also shifting to energy efficiency? No, CIS! We passed the so-called Energy Efficiency (ENVER) Law, but we haven't made any progress.

Is there any room in the law for social issues related to the climate crisis? No, cis!

It wouldn't be post-truth to suggest that the law could negatively impact our country's agriculture and lead to greater dependence on imports. It wouldn't be post-truth to suggest that Multinational Corporations (MNCs) will fill the void left by SMEs that have closed due to their inability to fund the necessary green transformation, and that Thoroughbreds will gallop us toward the exact opposite of our domestic and national economic goals. Don't mistake it for virtual reality (VR); it's augmented reality (AR) at best!

All in all, it looks like a law that will have a tsunami effect on the economy!

MINING AND ENERGY OMNI BILL VS CLIMATE BILL

If the "Proposed Law Amending the Mining Law and Certain Other Laws," commonly known as the "Super Permit Law," becomes law, it will undermine some of the issues in the Climate Law! For example, the use of carbon sinks (forests, agricultural lands, and wetlands) to prevent greenhouse gases from reaching the atmosphere will be eliminated! This is because not only will the trees that capture carbon dioxide in these sinks be cut down, but these sink areas will also be opened up to mining and other industrial projects!

In other words, it's like 'forty mules or forty cleavers?'

WHAT WAS CLIMATE CHANGE AND THE PARIS AGREEMENT, REALLY?

After 20 years of contentious and fruitless meetings, political representatives from nearly 200 countries signed a climate change agreement in Paris (at COP21). The agreement was met with enthusiasm in many media outlets, even The Guardian, which has been the most controversial publication on the subject.

However, the objectives and content agreed upon by the contract do not match the scientific working model outputs of the relevant and competent institutions.

First , let's look at what was stipulated in the agreement. The target was to limit global warming to below 2 degrees Celsius, with a target of 1.5 degrees Celsius being mentioned as a preferable option. However, the Intergovernmental Panel on Climate Change ( IPCC ) prepared a synthesis report model based on the Intended Nationally Determined Contribution ( NEUK ) Plans of the countries that signed the agreement , and it determined that global warming would be between 2.7 and 3.7 degrees Celsius. For example, to stay below 2 degrees Celsius, Turkey would need to double or triple its NEUK. What can we say about this? It's a mess!

If you're wondering if the contract mentions fossil fuels, coal, oil, and natural gas, we couldn't find any! We read the 32-page text, couldn't believe it, and then used the software's search, but still nothing! To be fair, the word "mother nature" was mentioned!

The signed agreement set a target requiring 80% of fossil fuels to remain underground. It was also agreed that the signatory countries would be held accountable every five years for achieving the target. It's also possible to interpret the Paris agreement as a new beginning, not an end.

We must point out that the signed agreement did not bring much in the short term to the people who were exposed to rising seas, stronger storms and deeper floods!

Governments' support for this decision and their efforts towards it were, of course, only possible if the public followed suit and exerted public pressure on their governments. Because the real and fundamental demand is not progress in this area, but a livable world. To achieve this, we must abandon all fossil fuels and transition to 100% renewable energy!

According to the agreement, greenhouse gas emissions will be reduced by 3 percent annually (with rich countries reducing by 10 percent annually) starting in 2020, when the Kyoto Protocol expires, until 2100, reaching zero carbon neutrality in 2050. However, the US withdrew from the Agreement during the Trump 2.0 era! While fate may not be the answer, intention is the key!

The Nationally Determined Contribution Plans (NDCs) for 2035, updated under the Paris Agreement, were to be determined by February 2025. Unfortunately, these have not yet been finalized! We will see both Chania and Konya at COP30, which will be held in Brazil in November 2025, 10 years after the Paris Agreement! It seems that climate change is accelerating! The world is still far from the targets set in the Paris Agreement in 2015; 2024 was a record-breaking year for temperatures, and the threshold set in the Agreement, 1.5 degrees Celsius, was exceeded for the first time! COP30 is of great importance as a technical deadline in the context of climate change! An evaluation of the Global Stocktake (GST) measurement, conducted every five years, will also be conducted.

British climatologist Kevin Anderson from the Tyndall Centre for Climate Change found the Paris Agreement target unrealistic. In order to stay below 2 degrees, rich countries had to reduce their greenhouse gas emissions by 70 percent by 2020 and 90 percent by 2030!

According to a model study conducted by HİDP, the maximum amount of carbon dioxide that can be released into the atmosphere is 2900 Gt (gigaton = 1 billion tons). 2140 Gt of this had already been released by 2014! The remaining 860 Gt until 2100! Let's deduct two more items: 60 Gt (deforestation impact), 150 Gt (cement industry emissions). That leaves 650 Gt! After the Paris Agreement was signed in 2015 (with annual emissions of approximately 37 Gt, let's say approximately 185 Gt), how will carbon neutralization or zero impact be achieved by 2050? Meanwhile, let's also share the information that monopolies operating in oil, natural gas, and coal have 2795 Gt of carbon in their reserves. Has the fight against monopolies inevitably become a priority?

In fact, James Hansen of NASA's Goddard Institute doesn't believe it's appropriate to focus on temperature increase targets, but rather on the energy balance. In a study conducted with ten other scientists, Hansen concluded that atmospheric carbon dioxide concentrations should be reduced to, and preferably below, 350 ppm (parts per million).

Jokes aside, if we remember that capitalism has become financialized and we're in the financial capitalist phase, financial capitalists are demanding climate regulations because they're negatively impacted by climate change. They're only asking for them on the condition that the public pays the costs and they profit from these regulations, but that's okay! We love arabesque, as Orhan Baba said: If it's my destiny, I'll suffer!

CLIMATE CRISIS AND FINANCIAL CRISIS RELATIONSHIP

In recent years, regulatory bodies have been warning that climate change is impacting the stability of the financial system. Following its strategy review in July 2021, the European Central Bank (ECB) has embarked on the development of a Climate Change Action Plan.

Let's recall that former Bank of England (BoE) Governor Mac Carney highlighted the financial risks stemming from climate change back in 2015! Similarly, the Commodity Futures Trading Commission in the US published a 200-page report: "Climate Change Poses a Substantial Risk Impact on the US Financial System." Some progressive Democrats, who claim that US Federal Reserve (FED) Chair Jerome Powell hasn't done much on the issue, are demanding that Joe Biden not reappoint Powell, but he was shown the blame again!

Will the climate crisis truly trigger a financial crisis? Preliminary stress tests conducted by central banks indicate a "yes" answer to this question. However, the package of political measures governments will implement in this regard is also important. These include carbon taxes to reduce carbon emissions, energy efficiency standards, and providing banks with sufficient time to prepare. So, how will this impact occur? Three possible paths are highlighted.

a) Transition risks

Through what regulators call "transition risks." If governments implement harsh climate policies, an economic restructuring could occur: capital would shift from polluting sectors to cleaner ones. Companies operating in polluting industries could become insolvent, and their stock values could plummet. Luck, there's nothing to be done!

b) Risk exposure of financial institutions

According to estimates by the Financial Stability Board (FSB), global economic losses from weather (climate change) skyrocketed from $214 billion in the 1980s to $1.62 trillion (three times global gross domestic product (GDP) in 2010s) at 2019 prices! These losses are generally incurred by insurers. These losses are undoubtedly passed on to customers over time in the form of higher premiums. Here's to fate: the 3Ps, or People Pay Principle. Blessed be the world's fastest elevator!

c) Increased fluctuations in asset prices

Academic studies on these asset price fluctuations, which are difficult to calculate, are not lacking. According to a study by the Network for Greening the Financial System, "a 3-degree Celsius warming relative to pre-industrial temperatures will have an impact on global GDP between 2% and 25%." They found that this impact will be even greater if migration increases due to climate change. This is very serious, even dire!

The impact of transition risks on asset prices is also highlighted. A Minsky moment (after the economist Hyman Minsky) is occurring as investors turn to mass sell-offs due to expectations regarding climate change policies, spreading this risk.

If we look at the extent of the impact on asset prices, according to Carbon Tracker, that's $18 trillion in global equities, $8 trillion in bonds, and $30 trillion in debt! Pretty substantial, isn't it? Regulators are particularly focused on systemically important banks and insurance companies for this impact.

Can this risk be managed? Research and stress tests by the Bank of France (BdF), the Dutch Central Bank (DNB), and the European Central Bank (ECB) have found this risk manageable. However, Mark Campanale of Carbon Tracker finds the results of these stress tests unreliable, stating that the models used are outdated, with a short-term timeframe of five years or so. He emphasizes, for example, that they do not measure the Minsky moment crisis.

SO WHAT SHOULD BE DONE?

The title of JB Foster's article (Monthly Review, November 2015) was: "System change, not climate change." In other words, Foster is saying, change the system; trying to change the climate is futile! Because capitalism's capital accumulation model is locked into climate change! Furthermore, the same thesis is put forward in a book of the same title edited by Martin Empson, a member of the UK Socialist Workers' Party and an environmental activist. The book also includes a chapter by the renowned Ian Angus, editor of the online publication Climate and Capitalism.

The problem of global warming can be mitigated through market-based efforts, such as the operation of an effective carbon market, but it cannot be solved; in fact, it will only get worse. It should not be forgotten that the fundamental solution lies in changing our lifestyles, transitioning to an eco-societal order, becoming more frugal and free of fossil fuels, and achieving an eco-societal life through the use of entirely renewable and clean energy. According to scientific studies, if warming reaches 2 degrees Celsius, 30 percent of the planet's species will face extinction. Would you like to buy a futures bond that guarantees that you, your child or grandchild, your cat or dog, the cherry tree in your garden, or the squirrel in your forest will not be included in this 30 percent? Then apply without delay to Eko-Kıyamet Menkul Kıyamet Anonim Şirketi, founded by İsrafil Bey. The website link is: www.ecoapocalypse.investments.com!

Our country announced its candidacy to host COP31. If we were to propose opening an Eco-Doomsday bond market in parallel with the ETS (carbon market), would it be like a Yellow Swan (or Black Swan) investment in the context of Trump 2.0?

NOTE: After this article, let's offer our readers some suggestions for climate crisis songs: 4 Degrees (Anohni); Despite Repeated Warnings (Paul McCartney); Shut It Down (Neil Young).