"Capitalism can save the planet – but first, we need to update it"

We live in an era of incredible progress. Humans have has built cities, flown across continents, and explored space. Yet, we constantly clash with the planet’s boundaries – climate crises, biodiversity loss, and increasing pollution.

The same system that has brought wealth and innovation has also pushed us to the brink, depleting nature’s resources faster than they can recover. So how can we adapt capitalism to address today’s realities?

Over the past 150 years, population growth and technological advancements have created unprecedented prosperity – but at the cost of exponentially growing resource demands. We now live in an age where human activity shapes the planet's ecosystems. Scientists warn that we’ve already crossed six out of nine planetary boundaries. Unless we break the link between growth and resource consumption, we risk not just exacerbating the climate crisis but triggering a broader system collapse that could undo the wealth we’ve built.

AI and other technologies hold enormous potential for driving resource efficiency, offering a glimmer of hope. But as long as the system rewards overconsumption, innovation alone won’t be enough.

Jevons paradox, coined by 19th-century economist William Stanley Jevons, reveals a counterintuitive truth: making resources cheaper and more efficient to use often leads to greater consumption. First observed with coal during the Industrial Revolution, it explains why innovations like fuel-efficient engines can drive up overall resource use instead of reducing it. To avoid collapse, we must rethink the fundamental logic of our economic system.

Our current system is like a powerful piece of software that hasn’t been updated to meet today’s challenges. It’s time for a system upgrade. By shifting taxes from labour to natural resources, we can steer society towards sustainability. If hiring people becomes cheaper, while consuming nature’s resources gets more expensive, the incentives across the entire economy change. Companies that achieve more with fewer resources will thrive.

To avoid collapse, we must rethink the fundamental logic of our economic system

For this to work, taxes should be applied where consumption happens – much like VAT. Consumption drives resource use, yet this crucial aspect is often overlooked in debates, which tend to focus on criticising companies extracting natural resources.

By taxing resource use at the point of consumption, we place responsibility where it belongs and make it easier for consumers to make the right choices. Instead of being overwhelmed by complex decisions, sustainable options become the default, empowering individuals and improving the system’s overall efficiency.

With an updated system, circular business models, recycling, and resource efficiency won’t just be good ideas – they’ll be economic imperatives. We can continue fostering innovation and prosperity but within the limits of what the planet can sustain. This isn’t just possible – it’s essential.

We can no longer rely on minor tweaks. If we believe in market forces and innovation, we must set the right framework. It’s time to hit "install now" and upgrade capitalism – for continued welfare, harmony with nature, and a sustainable future on our incredible planet.