by Kate McFarland | Nov 24, 2016 | News
The Goenchi Mati Movement advocates for the reform of mining practices in the Indian state of Goa. Its proposals include the investment of all money from iron ore mining into a permanent fund, which would be used to finance a citizen’s dividend.
Similar to Alaska’s Permanent Fund Dividend, the fund’s income would be distributed equally to all citizens in the form of an unconditional cash grant, providing all Goans with a basic income.
Founded in 2014, the Goenchi Mati Movement (GMM) aspires to reform mining practices that it believes to deprive residents of Goa their deserved share of the natural resources in their homeland, while also rapidly depleting these resources and damaging the environment. Describing the state’s mining practices, the GMM’s Manifesto says, “The total loss was enormous: nearly twice the state revenues, or over 25% of per capita income, or thrice the poverty line. The loss was effectively a per head tax equally on everyone. A few have become rich from our children’s inheritance. This is clearly not a reasonable situation.”
While iron ore mining has a long history in Goa, it expanded rapidly during the mid-2000s, and quickly became plagued with malpractice and illegal activity. In September 2012, the Supreme Court of India temporarily suspended mining in the state while hearing a public interest litigation. In its final judgement in April 2014, the Supreme Court declared all mining activities to have been illegal, largely due to mining companies’ lack of valid leases and licenses.
The environmental action group The Goa Foundation submitted a series of letters to the government of Goa in 2014, wherein it demanded the recovery of losses due to illegal mining and a restructured mining system based on the Goenchi Mati Principles. However, the government did not respond and began renewing the leases of Goa’s iron ore mines near the end of the year. By early 2015, the government had renewed the leases of 88 mines.
The GMM Manifesto
The Goenchi Mati Movement has published a Manifesto that outlines its proposal, which centers on six core principles (bold typeface in original):
1. We, the people of Goa, own the minerals in common. The state government is merely a trustee of natural resources for the people and especially future generations.
2. As we have inherited the minerals, we are simply custodians and must pass them on to future generations.
3. Therefore, if we mine and we sell our mineral resources, we must ensure zero loss, i.e. capture of the full economic rent (sale price minus cost of extraction, cost including reasonable profit for miner). Any loss is a loss to all of us and our future generations.
4. All the money received from our minerals must be saved in the Goenchi Mati Permanent Fund, as already implemented all over the globe. Like the minerals, the Permanent Fund will also be part of the commons. The Supreme Court has ordered the creation of a Permanent Fund for Goan iron ore and already Rs. 94 crores [about 3.8 million USD] is deposited.
5. Any real income (after inflation) from the Goenchi Mati Permanent Fund must only be distributed to all as a right of ownership, a Citizen’s Dividend. This is like the comunidade zonn, but paid to everyone. [The comunidades of Goa are traditional villages in which land is owned collectively. Comunidades pay an annual dividend, called the zonn, to residents.]
6. The implementation of these principles will be done in a transparent participatory process with the people of Goa.
The GMM launched its Manifesto at a press conference on Monday, November 21, and hopes soon to publish it in multiple languages, as well as to develop a variety of supplemental materials (e.g. animated explainer videos, video-based FAQs, and even songs and street theatre).
GMM’s Claude Alvares and Rahul Basu at press conference
The Permanent Fund and Dividend
As stated in the manifesto, an important first step towards the creation of a Goan iron ore permanent fund is already in place: in April 2014, the Supreme Court of India issued an order that mandated the establishment of such a fund, which presently holds Rs 94 crores (or about 3.8 million USD). Commenting on the significance of the permanent fund, Rahul Basu of the GMM states, “It is, to our knowledge, the first such permanent fund on intergenerational equity grounds to be ordered by judicial pronouncement. If it stands up to the legal challenges, which will then also clarify some aspects of the order, it can become a global legal precedent, which makes it potentially very powerful.” However, the Supreme Court’s order did not require that the permanent fund be used to finance a citizen’s dividend.
GMM Workspace
According to the Goenchi Mati Movement, the citizen’s dividend is a crucial component of the mining reforms for several reasons. First, it gives Goan citizens a stake in the minerals in their land, creating a stronger bond between the citizens and the commons (as one of GMM’s blog posts puts it).
Second, it leaves the government without money from the sale of the state’s minerals. In the absence of money from iron ore, the government might then be forced to tax its citizens to raise revenue. Following thinkers like Daron Acemoglu and James Robinson (the authors of Why Nations Fail), GMM argues that this change would promote good governance: “If the government wants to do all the various good things that need to be done, let them make a case to the people directly. If the people feel the government is good, they will agree to whatever new tax is imposed.”
Third, it compensates for what GMM sees as a bald injustice. As Basu describes it, any appropriation of parts of the commons–such as minerals and the land containing them–is effectively a “per head tax” or a “negative UBI” (that is, a practice that takes a share of resources away from every citizen).
Further reflecting on the moral significance of the dividend, Basu comments:
“Fundamentally, we are turning a lump sum mineral into a perpetual stream of Citizen’s Dividend. The Citizen’s Dividend today is given equally to everyone, achieving intragenerational equity. The perpetual nature of the Citizen’s Dividend achieves intergenerational equity. In a sense, each generation benefits to the extent of the real income. From this, we get to a practical example of the Golden Rule (the principle of treating others as one would wish to be treated oneself), but even across generations.”
GMM has been influenced by the model of Alaska’s Permanent Fund and Dividend, and also considers itself closely aligned in its thinking with Our Children’s Trust, an Oregon-based organization that promotes global action for the adoption of carbon tax and dividend policies.
Speaking about GMM, BIEN co-founder and honorary co-president Guy Standing said:
This is the optimum way of promoting community development while giving every man, woman and child a sense of basic security and pride in their community. It is enlightened, it is sensible, and it is eminently feasible.
Goan State Elections
With state elections to take place in early 2017, the Goenchi Mati Movement is urging Goans to vote only for politicians who will implement its Manifesto, and is currently devoting much of its attention to this political action.
As other sources confirm, mining policy is expected to be a central area of debate in the 2017 state elections. The Aam Aadmi Party (AAP), a relatively young party in Goa, promises sustainable mining practices, while meanwhile calling for a doubling of the mining cap. Meanwhile, environmental groups such as the Goa Foundation oppose the AAP’s plans, calling for greater restrictions.
The two major parties in India, the Bharatiya Janata Party (BJP) and the Indian National Congress, were in power during the controversial and illegal practices documented by the Goa Foundation — the Congress while the illegal mining practice themselves were occurring, and the BJP when the leases of the companies were renewed.
GMM states, “We urge whichever Government is elected in 2017 to immediately cancel the leases and reframe a fair and just mining policy for the people of Goa. We request the Public to join our campaign, fight for what is rightfully theirs and urge them to vote for those politicians that will change the system.”
GMM has produced a short video to emphasize this message:
Other Activities
Outside of direct political action, the Goenchi Mati Movement has been adopting other strategies to raise awareness of its vision. For example, on November 11, it sponsored an art show intended to promote reflection on the shared inheritance of the citizens of Goa. While this initial show was centered on paintings, GMM plans to host a second art show featuring cartoons, and third featuring photography.
Basu states, “Artists are at the leading edge of thinking, and they influence the masses in subtle and long term ways.”
Scenes from GMM’s Art Exhibit
Additionally, the Goa Foundation is engaging in litigation — a challenge to the structure of the Goan permanent fund (including the demand for citizen’s dividend), and a challenge to the 2014-15 lease renewals of the mines — and beginning to undertake academic research.
GMM Members at Create-a-Thon
BI-Related Reading from GMM
Rahul Basu and Deepak Narayanan (August 3, 2016) “Viewpoint: What can we learn from a campaign for zero-loss mining in Goa?” Citizen’s Income Trust.
Connects the activities of the Goenchi Mati Movement to the worldwide movement for basic income. Published on the blog of BIEN’s UK affiliate, the Citizen’s Income Trust.
Goenchi Mati (September 20, 2016) “Why should all mineral receipts be saved in the Permanent Fund?”
Argues that mineral receipts should be saved only in a permanent fund.
Goenchi Mati (October 28, 2016) “Why a Citizen’s Dividend? Why only a Citizen’s Dividend?”
Addresses the counterargument that some of the revenue of the iron ore permanent fund should go to the government instead of directly to the citizens.
Longer Video on the Goenchi Mati Movement (22:59)
Thanks to Rahul Basu for supplying information and photos, and for reviewing an earlier draft of this article.
Cover Image CC Frederick Noronha
by Kate McFarland | Aug 16, 2016 | News
This summer, Jim Pugh (cofounder of the Universal Income Project) and Owen Poindexter launched the first podcast exclusively about basic income, which bears the apt name “The Basic Income Podcast“.
The Basic Income Podcast publishes new episodes approximately weekly, each featuring a different guest. The inaugural broadcast featured Che Wagner, one of the activists behind the basic income referendum in Switzerland. Subsequent guests have included Camila Thorndike of the Chesapeake Climate Action Network, who spoke about the campaign for a carbon tax and dividend, and Joe Huston of GiveDirectly.
Listen to past and future episodes at The Basic Income Podcast’s web home or on iTunes.
by Jason Burke Murphy | Aug 13, 2016 | News
Sustainable Consumption
I recently went to a fascinating conference organized by SCORAI, the Sustainable Consumption Research and Action Initiative. This organization is dedicated to interdisciplinary study of consumption and the ecological impact of that consumption. They take seriously the threat of climate change and posed strong questions about the ways that our consumption decisions are driven by corporate culture and social planning. I went to presentations on transportation, automation, and ideology. Topics included driverless cars, e-bikes, downshifting, ecological footprints, mindfulness, and consumer wisdom. The topic of sustainable consumption pushes the research into posing hard questions about how humans are living and how they can live well. The conference had a blend of policymakers and scholars that you do not often see. I was reminded of the Basic Income Earth Network and US Basic Income Guarantee Network Congresses where I see activists, policymakers, and scholars listen to each other. Readers here should also consult SCORAI and keep their future conferences in mind.
Getting the Word Out about a Carbon Tax and Dividend
There was a sense of urgency given what we know about the amount of resources we are using and using up. Carbon taxes came up often. After all, they could impose the real ecological costs of consumption and manufacturing. I am a strong believer that a carbon tax is one of the ways we should fund a dividend for all.
We have heard about the “Limits to Growth” since the Club of Rome put out a now famous report bearing that title in 1970. Dr. William Rees, the inventor of the term “ecological footprint” pointed out to the conference that their projections have proven accurate in the 46 years since publication. This report predicts a series of economic collapses as consumption outpaces resource availability. So far, so scary. Rees calls for carbon taxes but also for cities to plan around local sustainability.
However, I was daunted by how often I found myself explaining what basic income is to participants. Most participants had heard of it recently but a surprising number looked curious when I mentioned it. If you are reading this, you have likely seen quite a few articles on a universal basic income and you may think “everyone else” has heard of it as well. We are not there yet. These are very clever and concerned people. Most were sympathetic. Not everyone thought a basic income was part of the topic of sustainable consumption just like not everyone at a basic income gathering would think the environment was a central part of the struggle against poverty. But we have to keep talking.
Concerns about Basic Income and ‘what the neighbors will think’
Those who were not on board (or at least not enthusiastic as me) came from many different angles. Many were speculating about how well basic income would “play” among the general public or in Congress. Some just wanted to know if the issue would hurt or help the Democrats in the upcoming election. These are the hardest people to convince. They are not actually asking themselves what they believe. We hear these sorts of things often elsewhere. These concerns will be met once a greater portion of the public has heard of basic income. Again, we have to keep talking. We have got a long way to go.
Direct Concerns about Basic Income
Some participants raised some very strong reservations about a basic income and I want to share them here and pose an initial response to them and a slightly longer one that includes an introduction to “degrowth.”
Most participants who were considering basic income were earlier proponents of a carbon tax to be used to fund ecological initiatives like public transportation, ecological energy production, and enforcement of environmental laws. Would a basic income squeeze out the budget for these things? That is a very real concern. Basic income is often sold as replacing other government functions. We have to acknowledge that this is a large budget item and all budget items can be seen as competing with other governmental functions. The best solution for this is environmental organizations writing bills with basic income in them. In the US, we have Citizen’s Climate Lobby and the Healthy Climate and Family Security Act, which has several congressional and organizational sponsors.
Another concern was raised as a research question. There is a strong link between income and ecological destructive impact. Worldwide, and in the US, the larger one’s income, the larger one’s “ecological impact.” Would a basic income turn every low-income American into a middle-income American? Would it turn middle-income Americans into Hummer-driving suburban developers? That would be an environmental disaster. I want to stress that this was posed as a research question. I heard no one straight out submit this as a rebuttal of basic income.
Income Now Drives Carbon Output
Jean Boucher’s research, presented at SCORAI, gave me another reason to think a carbon tax is important. He interviewed people who believe that climate change is a serious problem and those who do not. He compiled other research into climate beliefs and consumption patterns. He showed that people who believed climate change was a threat still used more carbon as their income increased. They used as much carbon as people with similar incomes who did not believe climate change was a threat. He noted that “liberals” tended to use up the carbon they save elsewhere with travel.
The fact that income makes people more dangerous as consumers is a strong argument for carbon taxes and other ecological regulations. Boucher, who supports a carbon tax dividend, shows that convincing people that climate change is real will not generate a sufficient amount of vegetarians with solar panels to actually make an impact. Carbon must be made more expensive.
Boucher has campaigned for a carbon tax through the Citizen’s Climate Lobby, which seeks a dividend. But could a basic income or any dividend reverse the benefits of the carbon tax? Would we just eat more cattle and travel more and ruin the planet?
We Cannot Build a Better World on the Backs of the Poor
If the ecological movement were to adopt this sort of reasoning, that would be a political disaster. They are already accused of forsaking jobs and prosperity for the sake of natural preservation. A basic income is a way to get around this. It also offers something to someone who has good reason to doubt they will be getting one of these new high-tech ‘green’ jobs preserving the environment. Can you really tell a coal miner to become an environmental engineer or an organic farmer? Do we not owe people something for pulling out the rug from under them, like that coal miner, even if we needed to?
We need to understand why depressed communities do not believe movement leaders who promise them jobs. They been promised this sort of thing before. They have been told jobs were created and they have been unimpressed. As I write, I just saw the Democratic National Convention run a video claiming Bill Clinton created millions of jobs. There is a whole belt of communities that just are not seeing it. A dividend would be a visible support for them and their communities. And a new sort of job creator. And it would reach the invisible and despised. Without a dividend, we give the opponents of environmental regulations a better opportunity to recruit votes from the less powerful.
We do not have the right to use deprivation, or the threat of deprivation, to promote even the best outcomes. It is very bad when the privileged argue that we should keep the threat of poverty in play so that people will work bad jobs for less money. It is still bad to leave people in precariousness even if our intention is to promote ecological sustainability. To talk that way is to combine a political disaster with our current moral one. After all, we are using the threat of deprivation to organize large sections of the population.
Basic Income and Degrowth
Giorgios Kallis’ keynote presentation steered me towards my provisional answer to these questions. He supports a basic income alongside the promotion of universal access to low-consumption versions of public transportation, education, and health. He sees this as a way of shrinking the destructive aspects of our economy, driven by capital, and increasing other parts of economic that we value, though ignored by capital.
Kallis’ main project is combining political ecology and ecological economics. These are two separate movements that he draws from in an attempt to take more seriously the material conditions that undergird our economic activity. We have a very long history of a link between growth in gross domestic product and a growth in carbon emissions. Kallis has called for “prosperity without growth” and is part of a “degrowth” movement. We have a finite planet and we cannot keep growing in the ways we have measured growth.
I have to admit that I have often presented a basic income as a vehicle for growth in those communities too invisible for current markets and current public planners to take action. Because I found this ecological argument for degrowth plausible, I wondered what this would mean for how I see basic income working.
The Gibson Graham Iceberg Model
In the course of presenting his argument, Kallis’ showed us was this drawing of an iceberg devised by feminist economists Katherine Gibson and Julie Graham. I have not been able to get it out of my head. Let us look at two examples, talk about them, and then get back to basic income and degrowth.
Drawing by James Langdon
Drawing by Ken Byrne
They published under a combined name of “J.K. Gibson-Graham” and their work can be found at a website called “Community Economies.” Almost all economics, they argue, only looks at the “tip of the iceberg” which consists of capitalist markets and wage labor. Above the “water-line”, we have the sort of things that our market economy sees. If a price can be put on it, then someone with money to invest (a capitalist) or to consume (a customer) can make an offer for it. These are the things that our economics and our politics (and increasingly our culture) value.
Below the water-line are things that we do value but capital markets do not value in the same way we do. I went with two examples because the whole idea of the iceberg model is to get you thinking about the things you value and see where they stand. Think about how important so many of these “underwater” items are. We value culture, charity, education, health, and family life. We should not give these up in exchange for money. They have a value that is hard to reduce to a cash amount.
The list is not complete. Also, every item below the line has capital and wage versions. People pay for schools and policymakers do assign a monetary value to them. There is an art and music market. Lots of economic activity that used to take place in households are now taken care of with wage payments.
The problem is that we live in a world in which all of our decisions are being pressured to work using the terms we see above the line. Libraries and schools, when they submit their budgets, are asked to justify their existence in terms of capitalist markets and wage labor. Maybe we just want to learn. Environmental organizations are told to think about the “economy” as if we do not assign value to what we breathe, eat, drink, and look at.
Many of the terms below the water-line point to ways of belonging, to spaces where we recognize each other’s talents. Families are a large space and a lot of us would like to be able to work more with open-source technology and cooperative enterprises because we place a value on their less dominated character.
Markets and workplaces can also be such value-laden spaces but the values we use when we assess a market or a workplace must come from somewhere below the water-line. If all you thought about was money in evaluating health care at any level, you will not get to the goal of health. But so many health organizations’ decisions are driven only by the tip of the iceberg.
Giorgio Kallis shows us the Gibson Graham Iceberg Model in order to point out that the “degrowth” movement seeks to contract what is at the top of the iceberg in order to grow what is low on the iceberg.
Basic Income and Values Growth
Perhaps I am too indoctrinated by growth-oriented language but I cannot help but push against the word “degrowth”. Their adherents seem to be talking about “real growth” or “values growth” (“Values Growth” is a phrase I just invented). I suppose they need to be very clear that they think the earth can only be sustained if capital markets are organizing less of the planet’s resources. That part of the economy needs to shrink.
Giorgios Kallis makes it clear though that he is not talking about a sparser existence. Degrowth for him would not mean tightening our belts. He supports a carbon-tax-funded basic income precisely because he hopes people will opt out of the hurly-burly lives of wage-work and consumption of consumer goods. He actually hopes people opt out of the economy as it is right now. But they would live better as they see it.
Those who decide to try to live on just their basic income are, by definition, deciding they can live better with more time and less income than they would with the jobs they see available. These lives will consume less of what the capitalist market steers us now to consume. The lives they build will promote options for others as well. When we look around, we will see more than just the lives that corporations want us to value. It does not all have to be shopping between shifts at work.
When we present basic income, we are often called upon to prove that people will not opt out of the workforce. I often point out that a basic income is still yours when you take on a job. Right now, people dependent on disability worry about losing that support if they try out a job. (I am often referred by policy analysts to very complex regulations. MBA’s and lawyers disagree over the meaning of these rules. I hold a couple of degrees but I couldn’t tell anyone what would happen to them. Disability recipients, whether educated or not, are expected to understand how these policies will be interpreted. Basic income gets around all that.) Many start-ups will be buoyed by basic income.
But Kallis calls for a rethink here. For Kallis, this nightmare scenario is no nightmare at all. People who opt out of the wage-labor market simply will use up less of the earth. Everyone who opts out of the labor market in order to live more sparsely is buying the planet time.
We Do Not Need to Consume to Live or Live to Consume
Consumption becomes more expensive while we are empowered to give care and creativity the time they deserve. This answers Jean Boucher’s concerns about increased income and consumption. There are not a lot of low-consumption options now when we look at what to do with our income. There will be more with basic income, which will create new kinds of social actors.
Let us look back at the iceberg again. A basic income means that you have a property-like claim on an income. You do not have to please someone with money to have an income. You do not need a job or a patron. This means you can spend more money and time on things you care about besides capital markets, wage labor, and the people who run those things.
Basic income moves resources from the top of the iceberg to the bottom. We can see that markets are pushing their values onto other things we care about. A basic income large enough to live on is one that enables us to say “no” more often to the world on top of the iceberg. As we look around in order to build a life that we want, we will survey the values that are below the line. We will be more confident than ever that we know what we want.
We will have more examples of people living lives they value. These will include investor and entrepreneurs and job-holders but they will also include lives focused on culture, experience, ethics, and values. A basic income will increase the number of people who organize to promote what they consider to be good, fair, and true. We need more organizations besides for-profit corporations competing for our attention and time. We depend on people negotiating between their needs and wants and the beliefs and power relations that they have inherited. This new world may be more contentious, more diverse, than our current one. It also may be more deliberative if persuasion becomes a more important means to organizing people now being organized by capital and wage offerings. Combined with making environmental destruction more expensive, a basic income funded by taxing pollution will make less-destructive lives more meaningful.
Edit (August 13, 10:40 pm EST):
A line was changed by the author. The new version makes it more clear that many people with disabilities are highly educated.
by Michael Howard | Sep 14, 2015 | Opinion
An emerging proposal for a carbon fee and dividend would yield a substantial dividend payment, eventually exceeding the amount of Alaska’s Permanent Fund Dividend, to American households. Citizens’ Climate Lobby (CCL) is proposing a revenue-neutral carbon fee. This would be collected from the companies operating hydrocarbon mines and wellheads, wherever carbon is first introduced into the economy, from which 100% of the revenue would be returned to the citizens as dividends. CCL’s proposal starts with a fee of $15 per metric ton of carbon, then would raise the fee by at least $10 per year (higher if faster carbon reduction is warranted) until environmental target reductions are met.
Using a carbon tax and dividend calculator at the Carbon Tax Center, I calculated what the individual and household annual dividends would be for selected years from 2016 (the hypothetical initial year) to 2039 (the last year available in the calculator). Households are assumed to contain an average of 2.6 people.
|
Individual |
Household |
Carbon Emissions, % below 2005 Levels |
| 2016 |
$264 |
$686 |
13 |
| 2017 |
433 |
1185 |
15.2 |
| 2025 |
1,613 |
4,194 |
30.7 |
| 2030 |
2,247 |
5,843 |
38 |
| 2039 |
$3,325 |
$8,646 |
48 |
Although not a full basic income by any means, a carbon dividend promises to be a significant addition to individual and household incomes, surpassing the average amount of the Permanent Fund Dividend in less than a decade. By 2039, it is estimated the proposed carbon fee would reduce CO2 emissions 48% from 2005 levels, substantially more than the reductions projected for the EPA’s Clean Power Plan.
That sounds impressive, but is it enough? Citing experts at the Tyndall Center for Climate Change Research in her compelling vision for remaking the economy to combat global warming, This Changes Everything, Naomi Klein claims that “our only hope” of keeping global warming below 2°C, “is for wealthy countries to cut their emissions by somewhere between 8-10 percent a year….This level of emissions reduction has happened only in the context of economic collapse or deep depressions” (21).
Kevin Anderson of the Tyndall Center maintains that there needs to be an 80% cut in emissions in the Annex 1 (wealthier) countries by 2030, if we are to meet the 2°C target, and also allow developing countries’ emissions to peak somewhat later. This, he argues further, requires a “de-growth strategy,” a planned period of reduced economic activity. He does not think that carbon pricing will suffice to reduce carbon emissions at the rate required, for the following reasons:
To summarise, if:
- reductions in emissions greater than 3-4% p.a. [per annum] are incompatible with a growing economy,
- the 2°C obligation relates to a twenty-first century carbon budget,
- a 50% chance of exceeding 2°C is adjudged an acceptable risk of failure,
- and Non-Annex 1 nations peak emissions by 2025 & subsequently reduce at ~7% p.a.,
- then the wealthier nations’ carbon budget is the global 2°C budget minus the poorer nations’ budget,
- and consequently wealthier nations must reduce emissions at 8 to 10% p.a.,
- Q.E.D. Annex 1 mitigation rates for 2°C are incompatible with economic growth
James Hansen et al., making somewhat different assumptions, also call for steep carbon emission reductions of around 6% per year.
More ambitious projections
Suppose that we need to reduce our emissions 80% by 2039. How much of a carbon fee would be needed, and how much would it yield in dividends? Starting at $20/ton, and beginning in 2016, with increments of $40/ton/year, these are the results from the Carbon Tax calculator:
|
Tax/ton |
Revenue, $ billions |
Carbon Emissions, % below 2005 Levels |
Individual Dividend (100% return) |
Household Dividend (average of 2.6 people) |
| 2016 |
$20 |
$110 |
14.7 |
$345 |
$896 |
| 2018 |
100 |
451 |
32.4 |
1,394 |
3,624 |
| 2020 |
180 |
708 |
43.2 |
2,153 |
5,599 |
| 2025 |
380 |
1,130 |
60.7 |
3,309 |
8,603 |
| 2030 |
580 |
1,419 |
70.4 |
4,010 |
10,427 |
| 2035 |
780 |
1,635 |
76.8 |
4,476 |
11,637 |
| 2039 |
$940 |
$1,785 |
80.4 |
$4,802 |
$12,485 |
Note that emissions in the US rose around 17% from 1990 to 2005, so to get emissions down to 80% below 1990 levels, the annual increase would need to be at least $45. This would, by 2039, produce emissions 82.7% below 2005 levels, with a fee of $1,055 per ton, yielding revenue of $1,770 billion and an individual dividend of $4,761 ($12,380 for a household). Presumably the lower revenue and dividends compared to the scenario with a $40 increment is the consequence of declining fossil fuel use and a lower tax base. (To reach 82.4% reductions from 2005 by 2030, Anderson’s target date, the fee increment would need to be $70/year. The maximum individual dividend in 2039 would be $4,268).
The carbon fee would constitute a steadily rising percentage of gross domestic product (GDP) in terms of revenue. If GDP were held constant at $19 trillion, the fee would rise from 0.5% of GDP in 2016 to over 9% in 2039. Even if, as is more likely, GDP rises, the fee will still rise at a faster rate than GDP. Estimates for the 2030 US GDP range from $25.5 to $38.2 trillion. The percent of GDP of the carbon fee in 2030 would thus fall between 5.6 and 1.4, respectively.
At first glance, this suggests that the carbon fee would bring a halt to growth, as it would equal or exceed the normal growth rate of the economy (around 2%). However, accounting for the fact that the revenue is being returned as dividends, the effect may be to steer growth in another direction, away from carbon energy, which will quickly become unaffordable.
Of course, all this depends on the soundness of the projections for emissions reductions at various levels of carbon fee. We have no experience with carbon fees accelerating so rapidly. One case study suggests that carbon taxes may not be as effective as one would hope: the Norwegian carbon tax, one of the highest in Europe, resulted in relatively modest reductions of carbon emissions compared to business as usual, and over the 1990s, carbon emissions rose 15%. One problem was exempting industries on account of competitiveness, and another more telling issue was the inelasticity of demand for some forms of carbon use, such as transportation. The record of British Columbia’s revenue-neutral carbon tax is more encouraging, but since it topped out at $30 per ton in 2012, it is hard to extrapolate from that case to the more ambitious targets discussed here.
In the model discussed above, there are no exemptions. But with the more ambitious fee, it may not be possible for demand to shift rapidly enough from carbon fuel to renewables, and the effect of the fee could be mainly to depress demand, and with it economic activity, as has happened in the past when energy prices rise. Then it would appear that rapid carbon emissions reductions would not be compatible with economic growth.
For basic income researchers, I will conclude by noting the tension between analyses such as this, which envision basic income as part of equitable environmental policy and at least a transition period of de-growth, and those analyses that see basic income as an economic stimulus for growth.
