by Andre Coelho | Jan 29, 2019 | News
“The answer is blowing in the wind”. Picture credit to: BBC News.
It’s official. Twenty-seven Nobel Laureate economists, four former chairs of the Federal Reserve, fifteen former chairs of the Council of Economic Advisers and two former secretaries of the US Department of Treasury now agree: a carbon-tax must exist, and its dividends should be distributed back to all US citizens. It is relevant to say that most of these co-signatories are ‘former’ actors of these important economic institutions, which may leave an open question mark on whether the present officials at these institutions also corroborate their support for this basic income-like carbon taxation policy.
According to long-time basic income advocate and researcher Philippe van Parijs, “this amounts to the endorsement of the Paine argument for basic income by a remarkable congregation of US top economists of all colors”. That would be granting a basic income as a right of existence to each citizen, in this case for sharing the Earth’s atmosphere; hence the right to live in a clean, climate change-free version of it – at least while there are anthropogenic carbon emissions being dispersed into the atmosphere.
The “Economists’ Statement on Carbon Dividends” is written in the form of a short list; short enough to be replicated here:
Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations.
I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.
II. A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government. A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.
III. A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty companies need for long-term investment in clean-energy alternatives.
IV. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established. This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.
V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.
It may also be relevant to acknowledge that “economic growth” and “competitiveness of American firms” can be read as central in this statement, which might leave another question mark on whether these top economists and advisers would still support a related policy if it, by any chance, didn’t involve these iconic aspects of modern-day capitalist economy. Also interesting is the reference to “cumbersome regulations”, which should be scrapped, and of the acceleration and “diffusion of carbon-efficient goods and services”. This also sounds reminiscent of a contemporary known driver of orthodox, 21st century economic theory: green growth.
Guy Standing, another long-time defender of the basic income policy, writing from Davos, where the world’s richest discuss money and politics at the highest level, has said that he considers this Economists’ Statement as “a major move toward basic income”, adding that he “even had agreement from Larry Fink on one panel debate.” This could indeed be very relevant, since Fink is one of the richest people alive today and therefore his net contribution to a basic income-like policy is, potentially, very large. Other participants at Davos, such as Martin Wolf from the Financial Times, have expressed more cautious approaches to this radical proposal, having said, “I have not been in favor, but I would not be against it, if it were introduced”. This could arguably be the equivalent of saying if a basic income were introduced, he would not reject the payment, but would not support it, either.
The complete co-signatory list for the Economists’ Statement on Carbon Dividends can be read here.
Article reviewed by Dawn Howard.
by Andre Coelho | Jan 6, 2019 | News
Michael Howard. Picture credit to: University of Maine
Michael Howard, a professor of Philosophy and Political economy at the University of Maine, who also specializes in environmental issues, has published an article on how a carbon fee and dividend might help to solve an impending climate disaster.
In this article, Howard speaks of a recent bill (November 2018), introduced to the House of Representatives of the United States, supported by Democrats and Republicans, “that would reduce CO2 emissions [from the US] by 40% in 12 years, and 90% by 2050”. Called the “Energy Innovation and Carbon Dividend Act”, it aims to impose a 10 US$/metric tonne fee on carbon fuels produced or imported, rising to 15 US$/metric tonne, if the referred CO2 emissions goals are not fulfilled.
The generated revenue would be saved at a Carbon Dividend Trust Fund, and be unconditionally redistributed annually to all US citizens. Estimated point to a US$ 3456/year for a family of four (as an example). Of course, fuel prices would go up, but according to the Regional Economic Models Inc (REMI), “most households would receive more in cash dividends than they would pay in higher fuel costs”. That and an estimated amount of 2.1 million extra jobs over 10 years, and reduced mortality in 20 years (due to declining air pollution).
If the bill is passed, present-day authority of the US Environmental Protection Agency (EPA) over carbon emissions will be suspended, but only to be re-installed if CO2 reduction goals are not met. Nevertheless, the expectation is that this Energy Innovation and Carbon Dividend Act will reduce carbon emissions from the US “far more than the Obama administration’s Clear Power Plan”. On social grounds, according to Howard, the bill is progressive, as far as taxation is concerned, and the dividend is fair and acceptable by the public at large.
More information at:
Michael Howard, “We have two years to avoid climate disaster. A carbon fee and dividend will help”, Bangor Daily News, December 18th 2018 (link to article not accessible from Portugal)
by Kate McFarland | Jul 22, 2017 | News
The Universal Income Project, a basic income advocacy group headquartered in San Francisco, is hosting a Q&A with California state senator Bob Wieckowski on basic income and carbon dividends.
This free public event will take place on July 25 at Covo, a coworking space in San Francisco.
Bob Wieckowski, CC BY 2.0 Internet Association
Wieckowski, along with Senate President Pro Tempore Kevin de León, was a sponsor of Senate Bill 775 (SB 775), introduced earlier this year, which proposed to revise the state’s carbon cap-and-trade program and institute a small basic income in the state.
Under SB 775, a portion of the new carbon revenue would be directed towards a newly created California Climate Dividend Program, which would distribute quarterly cash payments to all individual residents of California. The bill proposed a Climate Dividend Access Board to work with state officials to develop a mechanism to deliver the quarterly dividends (see the previous Basic Income News article “California State Legislature to Consider Carbon Dividend”).
Many American proponents of basic income see a carbon dividend, such as that proposed by SB 775, as a politically feasible stepping stone to a universal basic income of a livable amount.
At present, however, California is unlikely actually to adopt such a policy: on Monday, July 17, the state legislature voted to extend the state’s current carbon cap-and-trade program, which had been set to expire in 2020, through 2030. This program does not include a dividend.
For more information about the Q&A with Bob Wieckowski, see Eventbrite and Facebook.
Top photo: Coal power plant in southern California, CC BY 2.0 Rennett Stowe.
by Kate McFarland | May 6, 2017 | News
California State Senators have introduced a bill that would establish a carbon “cap-and-trade” system and distribute a large portion of the revenues as a dividend to all state residents, that is, as a type of basic income.
California State Senator Bob Wieckowski and Senate President Pro Tempore Kevin de León (both members of the Democratic Party) have introduced the proposed legislation SB 775, which would establish a floor and ceiling on the price of carbon in the state. The policy would go into effect in 2020, with the price floor and ceiling increasing incrementally each year.
Among US states, California has been ambitious in its efforts to reduce carbon emissions, passing a law in 2006 that established a goal of reducing emissions to 1990-levels by 2020. This has been easier to keep track of in more recent times as many businesses are now required to report their carbon emissions, and many do so using carbon emissions software. So far, however, the state has primarily relied on regulation of emissions levels as a way to meet its targets. Legislators like Wieckowski and de León believe that pricing regulations will be more effective at reaching longer-term goals in limiting carbon emissions.
One specific feature of SB 775, however, is relevant to those with an interest in basic income: the establishment of the California Climate Dividend Program, which would distribute a portion of the program’s revenue in the form of quarterly cash payments, distributed in equal amount to all residents of California on an individual basis. The dividend is, then, a form of basic income, although the amount of the dividend is not yet known and presumably would remain far below a livable income.
If SB 775 becomes law, the California Climate Dividend Program is likely receive the majority of the new state revenue (around 90 percent according to MIT Technology Review, and between 50 to 90 percent according to Vox). Other revenue would be directed towards public infrastructure, disadvantaged communities, and research and development in clean energy. It is possible now to get cheaper energy suppliers for renewable energy solutions from companies like Pulse Power Texas. States are starting to fund these kinds of sustainable energy projects but if people are able to afford it, then they should try to get things like wind energy or solar panels onto their house.
The legislation would also establish a Climate Dividend Access Board, which would work with state tax officials to develop a mechanism for delivering the quarterly dividends to residents, and to “maximize the ease with which residents of the state may enroll in the program.”
Environmental advocates often endorse per capita dividends in conjunction with taxes or fees on carbon as a way to offset the cost to consumers of higher energy prices. In the words of SB 775, the dividend is introduced “for the public purpose of mitigating the costs of transitioning to a low-carbon economy.” Carbon dividends have gained cross-party support in the United States, with a group of prominent Republicans issuing a proposal for a carbon tax and dividend earlier in the year. Correspondingly, many American basic income supporters see a carbon dividend as a practically and politically feasible way to introduce a small basic income in the country.
To become law, SB 775 needs to pass both houses of California’s legislature with a two-thirds majority.
References
“SB-775 California Global Warming Solutions Act of 2006: market-based compliance mechanisms,” California Legislative Information, May 1, 2017.
James Temple, “California Proposes Ambitious New Cap-and-Trade Program,” MIT Technology Review, May 1, 2017.
David Roberts, “California is about to revolutionize climate policy … again,” Vox, May 3, 2017.
Reviewed by Russell Ingram
Photo: CC BY-NC-ND 2.0 Kim Seng
