Climate Ultimatum: Beyond Capitalism, Towards a Just and Democratic Transition

Introduction: The Scientific Ultimatum and the Paradigm Crisis

Humanity faces an ultimatum. This is not a political demand or a diplomatic negotiation, but a verdict issued by the laws of physics and chemistry that govern our planet's climate system. The scientific data are unequivocal and form the basis of this ultimatum: human industrial activity, organized under the aegis of global capitalism, has destabilized Earth's climate to a point that threatens the very continuity of organized civilization. The average global temperature has already risen approximately 1.18 °C (2.12 °F) above the 20th-century average, with the warming rate since 1982 being more than three times higher than the historical average since 1850. The ten warmest years on record have all occurred in the last decade (2015-2024), with 2024 setting a new and alarming record as the warmest year in history.

This accelerated warming is a direct consequence of increasing concentrations of greenhouse gases (GHG) in the atmosphere, and the gap between political rhetoric and physical reality is abysmal. The United Nations Environment Programme (UNEP), in its Emissions Gap Report, warns that, even with the full implementation of all current national pledges (Nationally Determined Contributions, or NDCs), the world is on track for catastrophic warming of 2.6 °C to 3.1 °C by the end of the century. To align the global trajectory with the 1.5 °C target of the Paris Agreement — a threshold beyond which climate impacts become exponentially more dangerous — global emissions would need to be cut by 42% by 2030 and by 57% by 2035. The scale of this challenge reveals the monumental failure of the global political approach to date.

However, framing this crisis as a mere political failure or implementation flaw is to ignore its fundamental cause. This report argues that the climate crisis is not an accident, an unforeseen side effect, or a market failure to be corrected with technical adjustments. It is, instead, the logical and predictable result of a global economic system — capitalism — whose internal logic is structurally incompatible with ecological stability. Using the analytical framework of economist Richard Wolff, this report will dissect how the primacy of profit and the systematic externalization of social and environmental costs constitute the central driver of ecological destruction. The scientific ultimatum, therefore, is not just a call to reduce emissions; it is an ultimatum to the economic paradigm itself. The acceleration of the crisis does not indicate a system that slowly self-corrects, but rather a system whose negative results compound and feed back into each other, demonstrating its intrinsic unsustainability. The central question that the climate crisis imposes on us is not "how can we fix the climate within capitalism?", but rather "how can we transition beyond a system that is structurally incapable of solving the crisis it itself created?".

To answer this question, this report is structured into four chapters. Chapter 1 details the Wolffian critique of capitalism, focusing on the logic of cost externalization and how it manifests in profound carbon inequality. Chapter 2 exposes the architecture of inaction — the lobbying, disinformation, and financing strategies that the system uses to protect itself from regulation and change. Chapter 3 critically evaluates the dominant proposed solution, "green growth," and argues its empirical infeasibility, introducing "degrowth" as a more coherent alternative. Finally, Chapter 4 outlines the contours of a viable alternative, based on the synergy between economic democracy in the workplace, post-growth macroeconomic policies, and the imperatives of a just transition, with specific application to the Brazilian context.

Chapter 1: The Logic of Profit and the Externalization of Collapse: A Wolffian Critique

To understand the root of the climate crisis, it is imperative to analyze the fundamental structure of the economic system that produced it. The work of economist Richard Wolff offers a powerful critical lens for this task, arguing that environmental destruction is not an anomaly of capitalism but an intrinsic and functional characteristic. The core of his analysis lies in the concept of "cost externalization."

The Theory of Externalization and the Primacy of Profit

In calculating the viability and profitability of any enterprise, a capitalist firm considers only its private costs: wages, raw materials, rent, machinery, etc. However, the production process generates a myriad of other costs that do not appear on the firm's balance sheets. These are social costs or "externalities." As Wolff explains, when a factory pollutes the air, the associated costs — increased respiratory diseases, corrosion of house paint, the need for more frequent cleaning — are not borne by the capitalist who reaps the profit. They are, instead, externalized to society: "we, the people, bear the costs" (Wolff, 2020).

This failure to account for total social costs means that the cost-benefit calculations made by capitalists are fundamentally biased and socially irrational. A project may seem "profitable" from a private perspective, even if its social costs far outweigh its benefits. The claim that capitalism is an "efficient" system collapses under this scrutiny, as it systematically ignores a massive portion of the real costs of production.

This dynamic is not accidental; it is rooted in the system's primary directive: profit maximization, company growth, and market share capture. These are the "bottom lines" that determine the success or failure of a corporation and guide the decisions of its boards and shareholders. As Wolff points out, if protecting worker well-being or planetary health conflicts with these imperatives, they will be sacrificed. Executives may "feel very bad about it," but, within the systemic logic, they "have no choice" (Moyers, 2013). This is the structural reason why decades of appeals to voluntary "corporate social responsibility" and self-regulation have failed to produce the necessary changes. The logic of the system prevails over individual good intentions.

Carbon Inequality as a Manifestation of Externalization

The climate crisis is the largest and most dangerous externality in history. The connection between the abstract theory of externalization and the concrete reality of climate injustice is vividly illustrated by data on carbon inequality. The Oxfam report introduces the concept of "Pollutocrat Day": the milestone when the world's richest 1% exhaust their share of the global annual carbon budget — the amount of CO2 that can be emitted without exceeding 1.5 °C of warming. In 2025, this day arrived on just January 10th.

This global elite, comprising 77 million individuals, was responsible for 15.9% of global CO2 emissions in 2019. In stark contrast, the poorest half of the world's population — 3.9 billion people — was responsible for only 7.7% of emissions in the same year. The richest 1% collectively emit more than twice as much as the poorest 50%. To meet the 1.5 °C target, the richest 1% would need to reduce their emissions by 97% by 2030, a figure that exposes the radical unsustainability of their lifestyle and investment patterns.

This grotesque disparity is externalization on a planetary scale. The luxurious lifestyles, polluting investments, and wealth accumulation of a tiny minority are directly subsidized by the degradation of atmospheric stability that affects all humanity. The costs — in the form of droughts, floods, storms, and food insecurity — are pushed onto the most vulnerable populations, who are least responsible for the crisis. People in low- and lower-middle-income countries are about five times more likely to be displaced by sudden climate disasters than those in high-income countries. The climate crisis exacerbates poverty, hunger, and gender inequality, as women, who constitute 70% of the world's population below the poverty line, often bear the heaviest burdens of water and food scarcity.

The climate crisis and the inequality crisis are, therefore, not separate problems. They are two faces of the same systemic dynamic. The capitalist system operates by concentrating benefits (profits and wealth) in the hands of a few, while socializing and externalizing costs (environmental degradation and social collapse) to the majority. This process mirrors "Lauderdale's Paradox," articulated by James Maitland in the 18th century, who observed that the increase in "private riches" is often achieved through the destruction of "public wealth." Climate stability is the ultimate public good, and its destruction for private enrichment is the final manifestation of this tragic paradox.

Table 1: Carbon Inequality: Emissions and Responsibility by Global Income Group (2019 Data)

Population Group	Absolute Population (Approx.)	Percentage of Global CO2 Emissions	Per Capita Emissions (tCO2/year)	Emissions Reduction Needed by 2030 (for 1.5°C target)
Richest 1%	77 million	15.9%	76	97%
Richest 10%	770 million	48.0%	23	87%
Middle 40%	3.1 billion	44.3%	5	50%
Poorest 50%	3.9 billion	7.7%	0.7	- (already below target)

Source: Compiled based on data from Oxfam (2025).

The table above quantifies Wolff's critique. It demonstrates that responsibility for the climate crisis is immensely differentiated. The narrative that "we are all to blame" obscures the fact that the system is designed to disproportionately benefit a small elite, whose consumption and investment patterns are the primary driver of emissions, while the costs are imposed on those who contribute little to the problem.

Chapter 2: The Architecture of Inaction: Lobbying, Disinformation, and the Financing of Climate Chaos

The persistence of the climate crisis in the face of decades of scientific warnings cannot be attributed solely to inertia or ignorance. It is the result of an active and strategic defense of the status quo by the interests that benefit most from it. The capitalist system, confronted with the existential threat of climate regulation, has mobilized vast resources to ensure its self-preservation. This chapter examines the architecture of this deliberate inaction, focusing on fossil fuel industry lobbying, disinformation campaigns, and, crucially, the role of the financial sector as the engine fueling climate chaos. These actions confirm Richard Wolff's prediction that any attempt at significant regulation will be fought by "armies of lobbyists" to ensure it is "avoided, circumvented, and watered down" (Moyers, 2013).

The Paradigmatic Case of ExxonMobil: Know, Deny, Profit

ExxonMobil's history serves as a paradigmatic case study of deliberate cognitive dissonance of capital. Investigations based on internal company documents revealed that as early as the 1970s and 1980s, Exxon scientists were at the forefront of climate research. Their models predicted global warming with "shocking skill and accuracy," sometimes surpassing those of academic and government scientists. Their own researchers correctly predicted that human-caused global warming would become detectable around the year 2000 and estimated with reasonable accuracy the amount of CO2 that would lead to dangerous warming. A 1982 internal memo acknowledged the scientific consensus that a doubling of atmospheric CO2 would lead to a temperature increase of 3.0 °C (± 1.5 °C).

Despite this deep internal knowledge, the company's public stance was the antithesis of its science. From the late 1980s, ExxonMobil embarked on a multi-million-dollar, multi-decade campaign to "sow doubt" and "confuse the public." The company funded dozens of organizations and front groups that promoted climate denial, attacked scientific consensus, and emphasized "uncertainty." A content analysis by Harvard researchers concluded that while 83% of peer-reviewed scientific articles published by ExxonMobil acknowledged the reality of climate change, 81% of its "advertorials" (paid advertisements appearing as opinion pieces) in

The New York Times expressed doubt. This strategy was instrumental in blocking political action, notably the ratification of the Kyoto Protocol by the United States. The ExxonMobil case is not about ignorance, but about a calculated choice: profit protection was prioritized over scientific truth and planetary stability.

Regulatory Capture and the Socialization of Blame

ExxonMobil's strategy was replicated throughout the fossil fuel industry. Fossil fuel lobbying spent over $2 billion in the U.S. between 2000 and 2016 to influence legislation and block climate policies. This industry funded "shadow groups" to fight regulations like the

Clean Power Plan and the Kyoto Protocol, and continues to fight climate-friendly policies at state and federal levels.

One of the most insidious tactics of this campaign was to shift responsibility from systemic production to individual consumption. In 2004, oil company BP hired a public relations firm to popularize the concept of the individual "carbon footprint." The campaign was a remarkable success, instilling in the public consciousness the idea that the climate crisis was a matter of personal lifestyle choices (recycle more, drive less), rather than a consequence of industrial-scale fossil fuel production. This public relations maneuver served to depoliticize the crisis and protect the industry's business model, shifting the burden of the solution from producers to consumers.

The Financial Engine: Fueling Climate Chaos

If the fossil fuel industry is the body of the problem, the global financial sector is its circulatory system, pumping the capital that keeps it alive and expanding. The narrative that capital is voluntarily transitioning to a green economy is overwhelmingly refuted by the facts. The Banking on Climate Chaos 2025 report, an exhaustive analysis of fossil fuel financing, reveals a shocking reality: instead of decreasing, financing has increased dramatically.

In 2024, the 65 largest banks in the world channeled a total of $869 billion to the fossil fuel industry, an impressive increase of $162.5 billion (23%) over 2023. This increase reversed a trend of slight decline observed in previous years. Since the signing of the Paris Agreement in 2016, these same banks have injected a total of $7.9 trillion into the sector.

Crucially, a significant portion of this financing — $429 billion in 2024 — was directed to companies with active fossil fuel expansion plans, such as new pipelines, liquefied natural gas (LNG) terminals, and oil fields. This occurs despite the scientific consensus, articulated by the International Energy Agency (IEA), that there is no room for any new fossil fuel projects in a 1.5 °C compatible scenario.

U.S. banks are the main culprits, accounting for a third of all fossil fuel financing in 2024. JPMorgan Chase, Bank of America, and Citigroup lead the global ranking of climate chaos funders. This increase in financing coincides with the withdrawal of several large banks from voluntary climate alliances, such as the

Net-Zero Banking Alliance (NZBA), signaling an abandonment of their already weak climate pledges in the face of political pressure and the lure of easy profits.

The financial sector's behavior reveals the central flaw in the "green capitalism" narrative. While the defense of the fossil fuel industry can be seen as that of a legacy sector protecting its interests, the massive investment of the financial sector in fossil fuel expansion demonstrates that the problem lies in the very logic of capital accumulation. Financial capital seeks the highest return in the shortest possible time. As long as fossil fuels, aided by subsidies and externalized costs, offer these returns, capital will flow into them, regardless of the long-term planetary consequences. The financial system, in its current form, is not a potential savior, but rather a primary accelerator of the crisis.

As a counterpoint to this architecture of inaction, a growing wave of climate litigation is attempting to impose accountability. Cities, states, and citizen groups worldwide are suing fossil fuel companies and governments for climate damages, fraud, and human rights violations. Advisory opinions from international courts, such as the International Court of Justice (ICJ), are affirming states' legal obligations to regulate polluters and protect citizens from climate harms, based on customary international law. While their success is uncertain, this legal front represents one of the few remaining avenues to challenge the entrenched power of fossil capital within existing structures.

Table 2: Fossil Fuel Financing by Major Global Banks (2023-2024)

Bank	Headquarters Country	Total Financing in 2023 (US$ billions)	Total Financing in 2024 (US$ billions)	Change 2023-2024 (%)	Financing for Expansion in 2024 (US$ billions)
JPMorgan Chase	USA	40.8	53.5	+31.1%	23.1
Bank of America	USA	32.5	40.5	+24.6%	19.5
Citigroup	USA	28.5	40.4	+41.8%	20.4
Mizuho	Japan	37.0	40.3	+8.9%	18.8
MUFG	Japan	35.2	38.1	+8.2%	19.4
Barclays	United Kingdom	24.2	35.4	+46.3%	15.8
Wells Fargo	USA	26.1	33.5	+28.4%	14.7
Santander	Spain	14.5	17.3	+19.3%	8.2
BNP Paribas	France	15.1	16.5	+9.3%	7.0
SMBC	Japan	28.1	27.9	-0.7%	14.0

Source: Compiled based on data from the Banking on Climate Chaos 2025 report (Rainforest Action Network et al., 2025). 2023 values are based on data from the 2024 report, which used an expanded methodology.

Chapter 3: The Impasse of Market Solutions: "Green Growth" and the Fallacy of Absolute Decoupling

Confronted with overwhelming evidence of the climate crisis, the dominant economic paradigm has not remained silent. It has proposed a solution that promises to reconcile the irreconcilable: "green growth." This narrative, now hegemonic in institutions such as the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the United Nations, posits that economic prosperity, measured by Gross Domestic Product (GDP), can continue its perpetual expansion while its environmental impacts are drastically reduced. This chapter critically evaluates this proposal, arguing that green growth is a theoretical chimera and an empirical impossibility at the scale and within the timeframe demanded by the climate ultimatum. In its place, the paradigm of "degrowth" emerges as a more scientifically honest and ecologically coherent approach.

The Green Growth Paradigm and the Myth of Decoupling

The central pillar of green growth is the concept of "absolute decoupling." The theory holds that, through technological innovation, efficiency gains, and a transition to "green" industries, an economy can increase its GDP while decreasing its material consumption and greenhouse gas emissions in absolute terms. It is presented as a "win-win" strategy, capable of generating "green jobs" and tackling the climate crisis without requiring fundamental changes in the structure of a market economy based on accumulation.

However, the empirical evidence for this claim is extremely weak, if not non-existent. As economic anthropologist Jason Hickel and other ecological economists demonstrate, there is no single historical example of a country that has achieved an absolute decoupling of GDP from resource consumption and emissions at a rate remotely close to what is necessary to meet the Paris Agreement targets. The problem is twofold:

1. The Scale of the Decarbonization Challenge: Energy is the engine of economic growth. While clean energy capacity is increasing, it barely keeps pace with the growth in global energy demand. Between 2000 and the present, new clean energy capacity covered only 16% of new energy consumption, with the remaining 84% being met by fossil fuels. To maintain global GDP growth of 3% per year (the recent historical average) and at the same time stay within the carbon budget for 1.5 °C, the world economy would have to decarbonize at a rate of 10.5% per year. If growth slows to 2.1%, the required decarbonization rate would still be 9.6% per year. These rates are orders of magnitude greater than anything ever achieved or that empirical models deem feasible.

2. The Rebound Effect and Material Limits: The history of industrialization is replete with "Jevons' paradox" or the "rebound effect": efficiency gains, by making a resource or process cheaper, often lead to an increase in its total consumption, nullifying the environmental benefits. Furthermore, the very transition to a "green" economy has a massive material footprint. Building solar panels, wind turbines, and batteries requires the extraction of vast quantities of lithium, cobalt, copper, and other minerals. A growing global economy, even if powered by renewable energy, would continue to exert immense pressure on ecosystems through mining, deforestation, and biodiversity loss, pushing us beyond other planetary boundaries.

Green growth, therefore, does not appear to be a viable strategy, but rather a narrative of reassurance. It allows policymakers and business leaders to maintain a rhetorical commitment to climate action while avoiding the necessary structural changes and perpetuating the growth imperative that is at the root of the crisis. It is a form of "climate delay discourse."

The Coherent Alternative: Introducing Degrowth

If growth is incompatible with ecological survival, then a post-growth economy must be considered. "Degrowth" emerges here not as an undesirable recession, but as a deliberate political proposal: a planned, democratic, and equitable reduction of production and consumption in high-income nations, with the aim of bringing their economies back into balance with the living world.

The objective of degrowth is not to reduce GDP per se — that would be confusing the indicator with the goal. The goal is to abandon GDP growth as the primary barometer of social progress and, instead, focus directly on meeting human needs and ecological regeneration. This implies radically reducing ecologically destructive and socially less necessary forms of production (e.g., the fossil fuel industry, fast fashion, SUVs, advertising, industrially produced meat) and, at the same time, expanding sectors that improve well-being (e.g., universal healthcare, public education, renewable energy, regenerative agriculture).

This approach, far from being a utopian fantasy, is gaining ground in mainstream scientific discourse. The Intergovernmental Panel on Climate Change (IPCC) itself, in its Sixth Assessment Report, included a mitigation scenario called "Low Energy Demand" (LED). This scenario is the only one that achieves the 1.5 °C target without relying on speculative and potentially dangerous negative emissions technologies such as Bioenergy with Carbon Capture and Storage (BECCS). The LED scenario is, in its essence, a degrowth scenario: it projects a significant reduction in material and energy production and consumption, especially in Global North countries, while improving living standards. The inclusion of this scenario by the IPCC suggests that degrowth may be the only viable path to meet the Paris Agreement targets, marking a turning point in climate mitigation theory.

The debate between green growth and degrowth is, therefore, the central ideological battle over the future of climate action. Empirical evidence and climate models indicate that the degrowth position is more aligned with physical reality.

Table 3: Global Warming Scenarios and the Emissions Gap

Scenario	Projected Temperature Increase by 2100 (in °C)	Projected Annual Global Emissions in 2030 (GtCO2e)	Emissions Gap in 2030 (vs. 1.5°C) (GtCO2e)	% Emissions Reduction Needed by 2030 (vs. 2019)
Current Policies	3.1	58	34	N/A (increase)
Unconditional Pledges (NDCs)	2.8	55	31	7%
Conditional Pledges (NDCs)	2.6	53	29	11%
Path to 2.0°C	\< 2.0	41	17	28%
Path to 1.5°C	\< 1.5	24	0	42%

Source: Compiled based on data from the UNEP Emissions Gap Report (2024) and World Resources Institute (WRI).

The table above provides the quantitative "report card" of the failure of conventional approaches. It demonstrates the abyss between political rhetoric (the Paris Agreement targets) and the actual trajectory of emissions under current policies and pledges. The magnitude of the "emissions gap" — the difference between where we are going and where we need to be — makes it clear that mere incremental adjustments are insufficient. A paradigm shift is needed, one that questions the very premise of growth as a primary social objective.

Chapter 4: Outlining the Alternative: Economic Democracy and Ecological Well-being

After the critical deconstruction of the capitalist system and its false solutions, this final chapter is dedicated to constructing a coherent and viable vision for a sustainable and just future. The central premise is that a successful transformation requires a two-pronged, deeply synergistic approach: the democratization of the economy at the micro level (the workplace) and its reorientation at the macro level (post-growth policies). This entire process must be guided by the principles of a just transition, ensuring that no one is left behind.

The Structural Response: Democratizing the Workplace

Richard Wolff's fundamental solution to the contradictions of capitalism is not state ownership or central planning, but the transformation of firms' internal organization. He proposes replacing the hierarchical and autocratic structure of the capitalist firm with Worker Self-Directed Enterprises (WSDEs), more commonly known as worker cooperatives.

In a WSDE, the dichotomy between employer and employee is abolished. Workers, collectively and democratically, make the crucial decisions: what to produce, how and where to produce, and, most importantly, how to distribute the profits generated by their labor. The fundamental principle is "one worker, one vote." This structural change, Wolff argues, solves the central problem of cost externalization. Workers, who are simultaneously the owners and decision-makers of the firm, live in the communities where the firm operates. They will not vote to pollute their own air and water, to offshore their own jobs in search of cheaper labor, or to produce shoddy goods that they and their neighbors would consume.

In this model, social costs are internalized into the decision-making process. The firm's "bottom line" expands beyond monetary profit to include a broader set of objectives: the well-being of workers and their families, the health of the local community, the quality of working life, and environmental sustainability. The firm ceases to be an extractive entity, focused on maximizing value for distant shareholders, and becomes a community institution, accountable to its members and its environment.

The most prominent real-world example of this model is the Mondragon Corporation, a federation of worker cooperatives in the Basque Country, Spain. Founded in 1956, Mondragon has grown into a global conglomerate with tens of thousands of worker-members in areas ranging from industry and finance to distribution and knowledge. Its structure is based on principles of democratic governance, labor sovereignty, wage solidarity, and an explicit commitment to community development, donating 10% of its profits to social and educational projects. However, a critical analysis should not idealize Mondragon. The corporation faces the challenges of competing in a global capitalist market, and recent studies point to a lack of transparency in its sustainability reports and the risk of "greenwashing," raising questions about the depth of its environmental commitment in practice. This case demonstrates both the immense potential of workplace democracy and the complexities of implementing it within a global system hostile to its principles.

Policies for Post-Growth Prosperity

Workplace democracy alone is not enough. Democratic cooperatives, to flourish, need a macroeconomic environment that does not force them to compete on the destructive terms of conventional capitalism. This is where the policy proposals of the degrowth movement become an essential complement. The synergy between the micro (WSDEs) and the macro (degrowth policies) is key to systemic transformation.

Key policies proposed by Jason Hickel and other degrowth theorists aim to free society from its dependence on GDP growth to achieve social well-being. The main proposals include:

• Reduce destructive and unnecessary production: Implement legislation to end planned obsolescence, ensuring that products like appliances last decades instead of years. Introduce a universal "right to repair." Prohibit advertising in public spaces to reduce consumerist pressures. And, most importantly, actively reduce ecologically devastating industries, such as fossil fuels, fast fashion, SUV production, and industrial agriculture.

• Guarantee well-being and equity: Implement a significantly shorter working week (e.g., 32 hours or less) and a green job guarantee program, offering decent work in sectors such as ecosystem restoration, care, and renewable energy. Massively expand universal, high-quality public services — healthcare, education, housing, public transport, childcare — so that human well-being is decoupled from individual income capacity.

• Promote distributive justice: Establish a universal basic income along with a cap on income and wealth (e.g., through wage ratios and highly progressive taxes on wealth and inheritance). This serves to reduce inequality, which is a driver of positional consumption (consumption to display status) and excessive accumulation, and to finance the expansion of public services.

These macroeconomic policies create a stable and equitable environment where democratic firms (WSDEs) can thrive without the relentless pressure to grow at all costs. A shorter working week, for example, makes job sharing and employment guarantees more feasible, while universal public services reduce precarity and reliance on consumption for survival and well-being. Together, these two approaches form the pillars of a coherent post-capitalist economy.

Just Transition as an Ethical and Practical Imperative

Economic transformation of such magnitude — the transition from a fossil fuel and growth-based economy to one based on renewable energy and ecological well-being — will inevitably have winners and losers. Entire communities whose economies depend on coal, oil, and gas extraction will face massive disruption. For this transition to be politically viable and ethically defensible, it must be a "just transition."

The International Labour Organization's (ILO) "Guidelines for a just transition towards environmentally sustainable economies and societies for all" provide the global framework for this process. A just transition, according to the ILO, means greening the economy in a way that is as fair and inclusive as possible for all involved. Its fundamental pillars are:

• Social Dialogue: Meaningful involvement of all stakeholders — governments, employers, and workers' trade unions — in policy formulation.

• Social Protection: Creation of robust safety nets, such as unemployment benefits, health benefits, and pensions, to support workers and communities during the transition.

• Rights at Work: Respect for fundamental principles and rights at work, including freedom of association and collective bargaining.

• Creation of Decent Work and Reskilling: Massive investment in reskilling and skill development programs to prepare workers for jobs in the new green economy.

The application of these principles to the Brazilian context is crucial, especially in the Amazon. The region, which holds a central role in the country's renewable energy generation, but paradoxically relies on polluting thermal power plants for its own consumption, faces a sharp dilemma. A just transition in the Amazon requires an end to the extractive model and the promotion of a new development paradigm. Concrete proposals, supported by institutions such as the Institute for Climate and Society (iCS), include disinvestment in activities that destroy the forest (such as extensive livestock farming and illegal mining) and the redirection of investments to a bioeconomy based on the standing forest. This implies generating high value-added products from biodiversity, strengthening local production chains, ensuring the demarcation and protection of indigenous and quilombola territories, and channeling climate finance to local governments to implement adaptation and mitigation actions. The urgency of this transition is underscored by projections that climate change will have severe impacts on Brazilian agriculture, disproportionately affecting the poorest regions and less skilled workers, exacerbating existing inequalities. Without a just transition framework, climate action risks replicating the same injustices of the system it seeks to replace.

Conclusion: The Ultimatum Reconsidered – A Call for Socioeconomic Transformation

The climate ultimatum, as outlined by science, forces humanity to a historic crossroads. This report has argued that this is not an ultimatum that can be answered with marginal adjustments, isolated technological innovations, or market promises. The climate crisis is not a system failure; it is the system functioning as designed. It is the inevitable result of an economic logic that prioritizes short-term capital accumulation over long-term ecological stability and human well-being.

The analysis, guided by Richard Wolff's critique, demonstrated that the engine of this crisis is the systematic externalization of costs. Capitalism, in its relentless pursuit of profit, pushes environmental and social costs onto society, onto future generations, and, disproportionately, onto the most vulnerable nations and populations of the Global South. This dynamic is protected by a formidable architecture of inaction: a fossil fuel industry that, for decades, financed disinformation to sow doubt about the science that its own researchers confirmed; and a global financial sector that, even today, continues to inject hundreds of billions of dollars annually into the expansion of an industry it knows to be destructive.

Conventional solutions offered within this paradigm prove inadequate. "Green growth," the dominant narrative that we can decouple GDP growth from environmental impact, lacks any solid empirical basis. The scale and speed of decoupling required are physically implausible. This promise functions less as a viable strategy and more as a delaying mechanism, a way to avoid the deep structural changes that the crisis demands.

The ultimatum, therefore, must be reconsidered. It is not a choice between economic growth and stagnation, but rather between the continuation of a system organized for wealth accumulation by an elite and the construction of an economy designed for collective well-being on a habitable planet. The way to respond to this ultimatum is not technological, but fundamentally democratic.

This report outlined the contours of a coherent alternative, based on a powerful synergy between the micro and the macro. At the micro level, economic democracy, through worker cooperatives (WSDEs), internalizes costs and aligns production decisions with social and ecological goals. At the macro level, degrowth policies create an environment that frees society from dependence on growth, focusing on sufficiency, equity, and the expansion of commons. The transition to this new system must be guided by the ethical and practical imperative of a just transition, ensuring that the costs and benefits of transformation are shared equitably.

In this context, the growing wave of climate litigation emerges not as a panacea, but as a crucial tool for transitional justice. The legal and financial accountability of the architects of the crisis — large fossil fuel companies and their funders — is an essential step to dismantle their social license to operate, to reclaim a portion of illicit profits to finance the transition, and to create the necessary political space for the radical changes proposed here.

Ultimately, the climate crisis exposes the deepest contradiction of our era: the coexistence of nominal political democracy with real economic autocracy. As Wolff points out, the sphere where most adults spend most of their lives, the workplace, remains one of the most undemocratic institutions in society. Decisions made in these autocratic spaces have consequences that undermine the security and very viability of the democratic sphere. The climate ultimatum is, therefore, also a democratic ultimatum. Either we extend the principles of democracy to the economic sphere, or we will witness undemocratic economic power render political democracy irrelevant by destroying its own ecological foundations. The answer to the ultimatum lies not in finding a patch for the current system, but in having the courage to build one that is fundamentally different.

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