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You are here: Home / Conflict Triggers / Climate Change Updates / Carbon Fee & Dividend Beats Carbon Tax

Carbon Fee & Dividend Beats Carbon Tax

August 31, 2017 by Rudy Sovinee 1 Comment




James Hansen and others talk of a CARBON FEE AND DIVIDEND (making a carbon tax revenue neutral.) Its very granular cost aspects gives every manager and family a real incentive to transition off fossil fuels. While he and others have spoken of the process, I’ve never seen or heard these plans converted into dollar amounts.

Details for a Carbon Tax & Dividend
James Hansen’s CARBON FEE AND DIVIDEND proposal extrapolated into dividend amounts for 3 countries and an average estimate for Africa. Note the top portion shows which countries and income brackets contribute the most CO2

This chart expands James Hansen’s proposal into dividend amounts for 3 countries and an average estimate for Africa. As Hansen points out – it is the only way to get a global focus on change at every level. Once 2 or 3 larger nations set this into effect it would behoove more nations to adopt the plan, just so their own citizens would get the benefit of the dividend.

Which Nations Generate the Most CO2?

Recent and historical production of CO2 by nations and regions
Who should do what to mitigate the damages to life and property? Current and past emissions will most quickly affect people and nations who least caused the problems.

Not a “Carbon TAX” – Who would respond to such a policy?

Basics first, by giving all the fees collected back to the people, it constrains political complaints of “Big Government” feeding itself more cash. The fee & dividend proposal by James Hansen has been adopted as a starting point for many proposals. One group in the forefront is the Citizens Climate Lobby. It supports returning all fees collected to all US citizens in equal shares. Lower-income people will receive more in dividends than they will spend on higher prices.

High income people (about the top one third) consume so many products and services that they will spend more on higher prices than they get back in dividends. It is much easier, of course, for high income people to alter their consumption practices, and most of them will move to more energy-efficient, more local, and more cleanly made goods as soon as the prices of “dirty” goods start to climb. The top-most of the rich will add solar panels to their homes and buy e-cars (or such) that they can show their PC concern, but will (mostly) continue flying at the same rate and complain about the “carbon tax” because they will pay more for such energy use.

 

Who generates CO2
Most CO2 is generated by the highest income people. They buy more goods. This is true for individuals and for nations. Though among individuals, the 10% can be approximated as ►Academics ►Business Leaders ►Policy Makers & ►Frequent Fliers

The balance of the top few percent will also convert and cause much of the initial early benefits from the plan as they transition to non-carbon/renewable energy options. This will lower the CO2 emissions => lowering the total fee collected, and thus lowering the rate of growth in the dividend.

Those at the bottom still consume less but energy is embedded in many products, especially food processing and delivery, so the savings there will happen via the corporations also looking to avoid the carbon tax at their end by doing the transition off carbon fuels. Growth in the renewable energy supply will allow continued dropping of production costs per kWh generated, to the point where more people can afford to individually convert to greener energy, making it more accessible to more families.

Remaining Questions

Large Families?

The Citizens Climate Lobby does strike a balance that I asked about – whether to limit the number of children eligible so as to not encourage population growth – itself a huge cause of increased CO2:

Equal Per-Person Monthly Dividend Payments: Equal monthly per-person dividend payments shall be made to all American households (½ payment per child under 18 years old, with a limit of 2 children per family) each month. The total value of all monthly dividend payments shall represent 100% of the total carbon fees collected per month.”

My question was and remains “where is the break even point likely?” and though listed by some as at about the 67th percentile, I did not spot that statement or its analysis.

What About Cap-n-Trade?

Carbon trading schemes appeal to those in power – but carbon usage is so ubiquitous throughout the economic fabric that they break down and become subject to Wall St schemes for profits over substance.
A search of scholarly reports of abuse yields pages of results – that give abstracts, but are then behind pay walls. 1 example:

“Carbon trading: how it works and why it fails”

Abstract:
Carbon trading is the flagship policy for tackling climate change within Europe, and it is failing badly. While in theory it provides a cheap and efficient means to limit greenhouse gas reductions within an ever-tightening cap, in practice it has rewarded major polluters with huge windfall profits, whilst undermining efforts to reduce pollution and achieve a more equitable and sustainable economy. This article briefly examines the theory of carbon trading, then looks at the empirical record of both the EU Emissions Trading System (EU ETS) and the UN Clean Development Mechanism, which are the world’s largest carbon trading schemes. In conclusion, it briefly surveys the plethora of ways to tackle climate change in a more just and equitable manner. Abstract
Most of the articles on the topic were from the 2009 – 2011 years when bills on the topic were in congress. One of the more scathing examples of abuse more recently in the news is from Europe, involving Ukraine and Russia
 
Trying to overcome those abuses then leads to proposals for better, more detailed reporting – enough to make one’s head spin.
 
Lastly, I have seen many stories on rain-forests being cleared to make room for palm oil plantations… as a “green” project on corporate ledgers.
 
Reality is that applying a tax at the mining site or well head for the carbon extracted from the ground (IMO that must include leakage of gas) is a far simpler accounting tool that is far less susceptible to having foxes in the hen-house. THEN a dividend on a per capita or per household basis will ease the ripple through effects to those who can least afford the added costs.
Carbon Tax(Fee) and Dividend is a far superior, more finely grained approach to doing the needed transition off carbon based energy usage. It faces up to the already high societal costs of storms, flooding, crop failures, and health costs and gets each business and each family looking to alternatives instead of business as usual.

 

 

Filed Under: Climate Change Updates, Conflict Triggers, Population

Comments

  1. Rudy Sovinee says

    September 21, 2017 at 3:48 pm

    Good news – will it catch on?
    “Speaking at a climate change conference held by former Secretary of State John Kerry at Yale University, the South Carolina Republican called for a “price on carbon,” saying he would take the idea to the White House for consideration.

    “”I’m a Republican. I believe that the greenhouse effect is real, that CO2 emissions generated by man is creating our greenhouse gas effect that traps heat, and the planet is warming,” said Graham. “A price on carbon—that’s the way to go in my view.””

    Author: Justin Worland / New Haven, Conn. Sep 19, 2017
    http://time.com/4947960/lindsay-graham-climate-change-carbon-tax/

    Reply

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