The behaviour of consumers cannot be changed by a mere wave of a price wand either. Price signals alone are not going to deal with the 1 0 percent of carbon dioxide produced by car journeys, or the 1 8 percent used in heating and lighting buildings13-except possibly until temperatures have risen much above the 2 degree level. People are stuck with their existing, poorly insulated homes and patterns of dwelling and work that make them dependent upon car travel unless governments do much more than provide "signals" .
There i s an even more assertive version of the argument about the capacity of capitalism to successfully reshape itself than that put by Hamilton. It holds that the complete restructuring of industry to counter climate change would be beneficial to capitalism, since it would "create investment". The economic problem for capitalism in the 21st century is not, however, that there is some shortage of possible ways of investment. It is that such investments are not profitable enough.
The system today, as we have seen in the previous chapters, is dominated by giant firms based in particular states but operating across several states and sometimes the system as a whole. Each firm is caught between the need to undertake big and expensive investments in order to remain competitive and uncertainties about the profitability of such investments. Investing in new forms of energy or more energy eficient equipment and products is not going to overcome that contradiction. Indeed, doing so would make it worse for many firms, probably most. They can be relied on to pressurise states-and to threaten to relocate if necessaryto minimise price signals that clash with profitability. Governments themselves, identifying with nationally based accumulation, will resist anything that interferes with national competitiveness and go a fair bit of the way with the demands made by firms. This is why the "signals" are so weak, and why those who rely on influencing governments, like Stern, end up watering down targets in order to make them seem "realistic".
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The Runaway System