Citizen’s Climate Lobby is one of the most effective grassroots organizations working on specifically on the issue of climate change.
Citizen’s Climate Lobby is one of the most effective grassroots organizations working on specifically on the issue of climate change.
“Citizens”, eh? Mighty slick, and now calling for increased fossil fuel taxation with no mention of a dividend. The “Citizens’ Climate Lobby” appears to be the voice of oil and gad money.
So you smell a conspiracy, huh? It’s hard to keep track of them all, isn’t it?.
I’d like to think that they’re putting out a simple and understandable message about renewables (even if their math is a bit “bright-sided”), and at the same time priming the pump a bit for a carbon tax, which is the only way we’ll make any quick progress on AGW and implementing renewables.
Perhaps having the debate on whether or not there should be a dividend, and how big it should be, and how it gets distributed would be a good debate to have IF and WHEN the idea that a carbon tax is needed is accepted by all. That’s the first hurdle, and I’d bet that they have lots of answers in hand to use when the deniers start screaming about how “unfair” the tax is. Being able to show that the tax is “unfair” only to the bottom line of the greedy fossil fuel interests is a good position to be in.
There’s a lot that they didn’t mention.
http://citizensclimatelobby.org/carbon-fee-and-dividend/
The problems with both the liberal fee-and-dividend and the conservative corporate tax break systems of making a carbon-tax revenue system neutral is that they would tend to neutralize its effectiveness.
A fee and dividend is basically meant to give the poor and middle classes the money back that they’d lose from a carbon tax. If that was done, instead of figuring out ways to conserve energy (and not spend the money in the first place), they’d continue to spend the money and use energy as before. In addition, the system would greatly ramp up bureaucratic administration, increasing the costs of the system and diluting its effectiveness further.
A corporate tax break would just increase profits to companies. Most of it would go directly to shareholders. Some of it would fund expansion, increasing energy use.
The best way to use the money from a carbon tax would be to directly fund renewables and other alternative energy sources. It would effectively double the impact and intent of the carbon tax in the first place, which is to de-carbonize energy, not amplify growth.
“The best way to use the money from a carbon tax would be to directly fund renewables and other alternative energy sources”.
Yup!
In Canada and the US I think merely getting a carbon tax or cap & trade system installed would be a huge hurdle. If there need to be some giveaways to get the legislation passed which dilute the short-term impact, that’ll still be better than the status quo.
“A fee and dividend is basically meant to give the poor and middle classes the money back that they’d lose from a carbon tax. If that was done, instead of figuring out ways to conserve energy (and not spend the money in the first place), they’d continue to spend the money and use energy as before.”
Theoretically, emissions should even increase in the short term. High income people have a higher carbon footprint, but are less likely to react to an increase in the price of gasoline. Low/middle income people with a higher propensity to consume will consume more with their dividend income. Empirically, British Columbia’s carbon footprint significantly declined after running this experiment.
“In addition, the system would greatly ramp up bureaucratic administration, increasing the costs of the system and diluting its effectiveness further.”
Overhead estimates are 3.4% of revenue in the first year, falling to 2% once the kinks are worked out.
“The best way to use the money from a carbon tax would be to directly fund renewables and other alternative energy sources.”
True. But the politically possible better is better than the politically impossible best. 🙂
“True. But the politically possible better is better than the politically impossible best.”
Well, this is true enough. But I would put the chances of a fee-and-dividend carbon tax system in the United States at zero percent. That leaves tax breaks to the wealthiest in exchange for a carbon tax that will most affect the poor and middle – and this in a country where income inequality is already skyrocketing. I personally think the liberal position here should be to push not for a revenue-neutral system but for a use of the tax that will benefit everyone, and not just this generation. I think it could be sold politically a heckuva lot better than fee-and-dividend here.
We barely passed a health care law here in one of the extremely rare times that both houses of Congress and the White House were Democratically-controlled, and the main impact of that has merely been to strengthen the position of the health insurance industry itself:
http://www.nytimes.com/2014/11/18/us/politics/health-law-turns-obama-and-insurers-into-allies.html?_r=0
What has been posted here in past as a ‘compromise’ to enact a carbon tax in the States is so far neutered, it might even be a net negative environmentally:
http://climatecrocks.com/2014/11/01/conservative-quandary-on-climate/
My suggestion was for a sane world, which sadly, this is not.
From Citizens Climate Lobby:
“Place a steadily rising fee on carbon-based fuels
100% of the revenue from the carbon fee is held in a Carbon Fees Trust fund and returned directly to households as a monthly dividend.
The vast majority of households will receive more than they will pay for increased energy costs. This feature will inject billions into the economy, protect family budgets, free households to make independent choices about their energy usage, spur innovation and build aggregate demand for low-carbon products at the consumer level.”
That’s a huge bureaucratic increase over a simple income tax break and tax credit system (as in British Columbia). It wouldn’t be 2-4% of costs.
BC model:
http://www.motherjones.com/environment/2014/03/british-columbia-carbon-tax-sanity
“Overall, the tax has brought in some $5 billion in revenue so far, and more than $3 billion has then been returned in the form of business tax cuts, along with over $1 billion in personal tax breaks, and nearly $1 billion in low-income tax credits (to protect those for whom rising fuel costs could mean the greatest economic hardship). “
“Well, this is true enough. But I would put the chances of a fee-and-dividend carbon tax system in the United States at zero percent.”
True. I wouldn’t risk $1 to win $100 that the 114th congress would even consider it.
“That leaves tax breaks to the wealthiest in exchange for a carbon tax that will most affect the poor and middle – and this in a country where income inequality is already skyrocketing.”
As I understand the concept, money will transfer from people who emit more than the average GHG to people who emit less than the average. The lowest quintile spends $22,000/yr including $2,200 on fuel and utilities. The highest quintile spends $99,000/yr including $5,300 on fuel and utilities. CCL estimates that for 2/3 of households, the dividend will be greater than the tax.
The administrative overhead for Social Security to make monthly payments to recipients is about 2%. Taxing fossil fuel at the points of extraction (or the pipelines), ports of entry, and assessing “border adjustments” (import taxes) on products from lagging countries would of course add some additional cost.
http://citizensclimatelobby.org/administrative-cost/
“CCL estimates that for 2/3 of households, the dividend will be greater than the tax.”
This might be so. My point on my follow-up comment was that this concept would never fly in the U.S. It’s basically redistribution. I have no problem with it personally. Most Americans would, though, and our media would ensure it gets tar-and-feathered. Our politicians would listen to their campaign donors over the handful of those who support it.
Therefore, what we’d likely actually see as a compromise to a carbon tax is something like a corporate tax break (my comment “That leaves tax breaks to the wealthiest”). Eli Lehrer and company are asking for more than just that, however. They also want an erosion of existing environmental regulations and investment tax breaks, in exchange for granting us a carbon tax. It’s basically like saying they’ll grant a market approach to tackling climate change for the benefit of humanity as long the wealthiest in the country get a payoff. However, in this country, that is the most politically realistic version of a carbon tax we’ll get – if we’re talking strictly about getting the “politically possible better”.
I personally think we’re wasting time on fee-and-dividend, both from a political perspective (it won’t pass Congress) and from a practical perspective (we’re better off putting the money straight towards R&D, direct funding, and infrastructural improvements). I think liberals could sell that approach better to the country than a redistribution scheme, as it would benefit all classes and all sectors of the economy – and not just this generation, but many generations to come.
We could argue all day about administrative costs of the CCL concept, but it’s a minor point. The CCL method of fee-and-dividend would be no less intensive than SSA, and as you point out, there’s also the point of collection. The SSA currently employs just under 70,000 people:
http://www.ssa.gov/policy/docs/statcomps/supplement/2011/2f1-2f3.html#table2.f2
Any carbon tax would have administrative costs, of course. My concern was that the fee-and-dividend system of CCL would naturally have higher costs than other methods. They claim very low costs of 0.4% to 4.8% – fine.
Well, no. The point of the carbon tax is that anyone anywhere who uses less fossil carbon makes money, and anyone anywhere who doesn’t do that loses money. And that’s true regardless of how government distributes the revenues.
Suppose you’re an average Joe and spend an extra $200 per year on the carbon tax, and the government sends you a check for $200 at the end of the year. If you turn around and spend that on more gasoline next year, you’re not making anything. But if you can figure out how to NOT use more gasoline, or even use less, that $200 (or a portion of it) stays in your pocket.
Essentially, passing a carbon tax puts 300 million brains to work figuring out how to make money by avoiding the tax.
That’s my first point, that revenue-neutral plans (fee and dividend and/or corporate tax breaks, etc.) tend to dilute the effectiveness of a carbon tax – NOT that they wouldn’t work at all. Of course they would have some effect, using the mechanism you described.
However, the money they receive WILL be pumped back into the economy, increasing energy use, and therefore using fossil carbon – hence, the dilution.
Americans don’t save money anymore. They have to spend it:
http://money.cnn.com/2013/06/24/pf/emergency-savings/
Or, we could choose to use carbon tax revenues towards actually building and researching renewables and nuclear and paying for the infrastructure necessary to support it (we’d have to spend that money, anyway). That would force both the conservation measures that you describe and directly decrease the percentage of fossil carbon used in the system.
I know we live in Crazyville, though, where such an idea is too radical to pass Congress as well.
We have a system where wealth is concentrated in the hands of a few. These schemes don’t change that. They keep BAU and give incentives to move investments off FF. clever ways of working the system. In this system, Elon Musk is doing exactly the right thing. One must swerve investments away from FF to alternatives. That leaves criticism that wealthy are benefitting open, but the wealthy will be the first to invest. No less than Warren Buffet is doing exactly that. And on the other side, Kochs.
Starting from where we are, that is a pragmatic and necessary approach. The problem is that it only delays facing the inevitable. It’s the system that got us into the trouble we are in today. It still puts money in the hands of the few, a very undemocratic result, and it encourages unrestrained economic exponential economic growth and natural resource exploitation. It represents the opposite of the goal of sustainability.
Those that argue against these schemes have a not so hidden distrust that they will lose, and a tacit admission that the system is rigged for winner takes all. They just prefer to be at the finish line of the rat race first, and changing the rules gets in their way.
Well said, Christopher – F&D necessary, but it doesn’t get at the core of the problem, which is Growth as Ultimate Value, and out-competing the other guy in exploiting natural resources.
On CCL, I’m surprised to hear so many naysayers here. It’s the cleanest and most efficient mechanism I have every heard for de-motivating FF use and motivating non-carbon use of all kinds. It’s not EXPLICITLY redistribution from rich to poor and so it’s hard to tar it with that epithet. This is where I have a problem with the Democrat philiosophy, that being poor per se makes you more worthy of largesse of some sort. CCL benefits the low-carbon user, not necessarily the poor. Suddenly, with that dividend check you may want to reconsider buying $10 gasoline for your car and instead opt for a hybrid, or other items less affected by the carbon tax. But we need a very stiff tax to make any real difference – $200-300/ton, not the $8/ton CO2 which I’ve heard bandied about.
No, it’s not explicitly redistribution. It’s implicitly redistribution. Like I said, I don’t have a personal problem with it. But it wouldn’t pass Congress, and one of the reasons is your statement:
“This is where I have a problem with the Democrat philiosophy, that being poor per se makes you more worthy of largesse of some sort.”
Most Americans believe that BS. Of course the poor deserve largesse. But they won’t get it in the land of Ayn Rand.
That’s my point, that we should focus on making a carbon tax stronger by using the funds towards its direct purpose, which is to build out alternative energy, instead of hand it out to this (the wealthy) or that (the poor) social group.
“The land of Ayn Rand”. Indeed. Great phrase. I was thinking every man/woman for themselves, but land of Ayn Rand does it better.
Christopher,
Another term of art for the dystopia Ayn Rand promoted is Hobbesian. Here’s an example:
“This outlook, written by Supreme Court Justice Anthony Kennedy in the famous Citizens United case, understands and celebrates America as a brutal and Hobbesian competitive struggle among self-interested actors attempting to use money to gain personal benefits in the public sphere.”
http://tinyurl.com/ov6wzkn
Hobbes may not be as well known as Ayn Rand. More interesting is that the SC buys this
Citizens United case, understands and celebrates America as a brutal and Hobbesian competitive struggle among self-interested actors attempting to use money to gain personal benefits in the public sphere.”
It is tantamount to an open admission that American ethics is nothing but a cock fight. Its like a game that uses blood sport as its spinning wheel pointer arrow.
WHOA! Correct me if I’m wrong , Ray, but quoting someone’s OPINION who was writing a review of a book about Citizen’s United does not extend to saying “More interesting is that THE SC BUYS THIS”
Who says the SC “buys this”? Did Kennedy ever mention “a brutal and Hobbesian competitive struggle—etc.” in his writing? Don’t think so. That’s just after-the-fact axe-grinding by the author and/or reviewer.
And although this is colorful prose (“It is tantamount to an open admission that American ethics is nothing but a cock fight. Its like a game that uses blood sport as its spinning wheel pointer arrow”), it’s a bit of over-the-top hyperbole and exaggeration. “….TANTAMOUNT TO an open admission….” and “blood sport pointer arrow”? Give us a break! (and is that Arcus speaking or an unattributed quote?)
indy – you have touched the heart of the matter.
“caveat emptor and each person pursues their own interests as Adam Smith would say, that if you pursue your own self interests and don’t even think about anyone else’s interests, somehow you will benefit the common good. I always though this was a strange dictum by Adam Smith, but so be it. ”
34:00 to 34:17.
You seem to be responding to this philosophy as I do. IMO, its socially repugnant.
Jeremy Rifkin has something to say on the subject of this matter and the coming revolution of the collaborative commons. There is a whole system outside the world of capitalism and GDP. He suggests we are moving from a Capitalist to a collaborative economy and it might be the basis of a new sustainable system.
Carbon tax? Brilliant, I’m all for it. Replacing coal with wind? Won’t work, can’t work, been tried in Germany, and proven too expensive. Wind is cheap only when it’s built on top of a reliable grid with a lot of dispatchable generation. If we want wind to work (and we do!), we need a lot of non-fossil dispatchable power to back it up with, when the wind dies. That means hydro and geothermal where available, and nuclear where not.
Tropes galore. Start with the myth of base load power and educate yourself. Inflexible nuclear of all sources is the least able to respond to variable loads much less variable generation. Nuclear requires fast reserves to back up unplanned outages and gas turbines, or other peaker power plants to follow loads that it cannot. Solar naturally follows daytime loads and has resulted in the collapse of daytime wholesale rates, an effect that has seen large numbers of coal and nuclear plants taken offline in Germany. Likewise, pumped storage has been cut back in Germany because of solar removing the day/night arbitrage market. Operating nuclear and coal to follow load destroys its economics because it is operated at less than full capacity in load following.
http://climatecrocks.com/2014/07/19/the-myth-of-energy-storage-vs-baseload/