The world can meet the Paris climate targets at about a quarter of the cost of current subsidies for fossil fuels, according to a new climate study funded by the Leonardo DiCaprio Foundation.
The study, entitled Achieving the Paris Climate Agreement, is the culmination of a two-year scientific collaboration with 17 leading scientists at the University of Technology Sydney (UTS), two institutes at the German Aerospace Center (DLR), and the University of Melbourne’s Climate & Energy College.
It was funded by the Leonardo DiCaprio Foundation and released by the scientific publisher Springer Nature. The model produced by the authors, called One Earth, offers a roadmap for surpassing the targets set by the 2016 Paris Climate Agreement,
According to Karl Burkart, Director of Innovation at the Leonardo DiCaprio Foundation, the One Earth climate model “is groundbreaking in that it shows the 1.5°C can be achieved through a rapid transition to 100% renewables by 2050, alongside land restoration efforts on every continent that increase the resilience of natural ecosystems and help to ensure greater food security.”
Lead author and editor Dr. Sven Teske, Research Director of the Institute for Sustainable Futures at the University of Technology Sydney (UTS), said, “Scientists cannot fully predict the future, but advanced modeling allows us to map the best scenarios for creating a global energy system fit for the 21st century. And with momentum around the Paris Agreement lagging, it’s crucial that decisionmakers around the world can see that we can, in fact, meet global energy demand at a lower cost with clean renewables.”
The scientists at UTS created a sophisticated computer model of the world’s electrical grids to date, writes Burkart, “with 10 regional and 72 sub-regional energy grids modeled in hourly increments to the year 2050 along with a comprehensive assessment of available renewable resources like wind and solar, minerals required for manufacturing of components, and configurations for meeting projected energy demand and storage most efficiently for all sectors over the next 30 years.”
The result shows that “not only is it possible to switch to 100% renewables for all energy uses, but it will cost no more to operate than today’s energy system. Moreover, it will eliminate the toxic pollution associated with the burning of fossil fuels, estimated to be the primary cause of 9 million premature deaths per year. The renewable energy transition will not only improve public health worldwide, it will also drive economic development, providing the 30 million people currently working in the energy sector with permanent, well-paying jobs and creating an additional 12 million new jobs.”
The proposed energy transition outlined in the One Earth climate model will require an investment globally of approximately $1.7 trillion per year, according to the study. Burkart notes that this amount “pales in comparison to the vast subsidies governments currently provide to prop up the ailing fossil fuel industry, estimated at more than $5 trillion per year by the International Monetary Fund (IMF). Taxpayers are unwittingly funding the climate crisis, and that needs to stop. The research tells us that we could be creating the clean energy future we so desperately need for less than one-third of what we’re spending now, and in so doing improve energy access in the developing world.”
Leonardo DiCaprio, Founder of LDF, said, “This ambitious and necessary pathway shows that a transition to 100% renewable energy and strong measures to protect and restore our natural ecosystems, taken together, can deliver a more stable climate within a single generation.”
According to Burkart, an important element in the One Earth model is the role of natural ecosystems. Justin Winters, Executive Director of the Leonardo DiCaprio Foundation, said, “Nature is the missing key. While the renewable energy transition is imperative to solving the climate crisis, it isn’t enough. Currently wildlands and oceans absorb one-half of all our CO2 emissions. As this climate model shows, in order to keep global temperature rise to no more than 1.5°C, we have to keep our natural carbon sinks intact, scale up restoration efforts and shift to regenerative agriculture. Without them we have no future.”
The climate model shows that by protecting natural ecosystems and completely phasing out deforestation in the 2030’s, we can maintain the integrity of the carbon sinks that are so vital to rebalancing our global climate system.
The newly released climate model is part of the larger One Earth initiative, launched by the Leonardo DiCaprio Foundation in 2017. The initiative builds upon the latest science to create a vision for the world that is possible in 2050, a world in which humanity and nature can coexist and thrive together. The vision is based upon three pillars of action – 100% renewable energy, protection and restoration of 50% of the world’s lands and oceans, and a transition to regenerative agriculture, all by 2050. “Together, these pillars of action give us a global roadmap to tackle the climate crisis and to ensure a sustainable future for all of Earth’s inhabitants,” writes Burkart.
Principles Of The Sunrise Movement: Antidotes To Neoliberalism
January 22nd, 2019 by Carolyn Fortuna, Clean Technica
The term “neoliberalism” isn’t new. It was coined in 1938 at a meeting in which social democracy was framed as analogous to a collectivism like Nazism and communism. But neoliberalism today is a conundrum: its slimy tendrils claw into everyday Western life, yet it is so anonymous that we seldom even recognize it as a pervasive ideology. Neoliberalism pushes deregulation on economies around the world, forces open national markets to trade and capital, and demands that governments shrink themselves via austerity or privatization.
Neoliberalism’s anonymity is its essential symptom and cause of its power, and the Sunrise movement is seeking to make the consequences of neoliberalism transparent in society. You know Sunrise, even if you can’t immediately grasp why. They’re the cohort of primarily college-aged activists who are promoting the Green New Deal. You saw pictures of their sit-in in front of Nancy Pelosi’s congressional office in the news and on 60 Minutes when Rep. Alexandria Ocasio-Cortez (D-NY) joined them in support of objectives to virtually eliminate greenhouse gas (GHG) emissions in a decade.
The earth is on track for 3-4 C degrees of warming, which would cause sea level rise of several feet and make extreme weather more frequent and dangerous, among other consequences. The next 4 to 12 years are critical if the world wants to limit that warming. Waiting to reduce greenhouse gases will make the challenge harder.
The Sunrise Movement is working to build a cohort of young people to make climate change an urgent priority across the US, end the corrupting influence of fossil fuel executives on politics, and elect leaders who stand up for the health and wellbeing of all people.
The Sunrise Movement’s Green New Deal would eliminate GHG emissions from electricity, transportation, manufacturing, agriculture, and other sectors within 10 years. It includes a job guarantee program “to assure a living wage job to every person who wants one” while also seeking to “mitigate deeply entrenched racial, regional, and gender-based inequalities in income and wealth.”
The Principles of the Sunrise Movement
George Monbiot, an environmental writer and political activist, wrote about neoliberalism for The Guardian, and that article has become suggested reading for Sunrise participants. Why is Monbiot’s message resonating with these young Green New Deal activists? Well, instead of competition, division, and isolation, the Sunrise Movement wants you to feel part of action that can change the world — literally — for the better. And it will only happen when people come together and work toward social change.
Sunrise is the antithesis of neoliberalism.
In order to build the movement for a Green New Deal — a plan that would transform the US economy and society at the scale needed to stop the climate crisis — the Sunrise Movement has created a series of guidelines for their actions. In a side-by-side comparison with neoliberalism, it is evident how the rich and powerful who control environmental and climate change politics differ from this group of young people who are scared about what the climate crisis means for the people and places they love. The Sunrise Movement is motivated by the belief that, if they unite by the millions, they can gain political power and “reclaim our democracy.”
Trickle-Down vs. Robust Technological Workforce
Neoliberalism: Neoliberalism shapes the ideal of society as a kind of universal market (and not a civil sphere or a kind of family) and of human beings as profit-and-loss calculators (and not bearers of grace or of inalienable rights and duties), writes Stephen Metcalf in The Guardian. With a goal to weaken the welfare state and any commitment to full employment, to cut taxes and deregulate, neoliberalism has been a way of reordering social reality and of rethinking our status as individuals.
Sunrise: “We are a movement to stop climate change and create millions of good-paying jobs in the process.” As they unite to make climate change an urgent priority across the US, the Sunrise Movement has a goal to end the corrupting influence of fossil fuel executives on our politics and elect leaders who stand up for the health and wellbeing of all people.
Policies to address climate change will bear directly on the future of individuals in the US, impacting everything from their financial status, lifestyles, and local community culture. No longer can it be assumed that US elected officials will take climate change matters into their legislative hands for the betterment of society at large. Each person in the US needs to be actively involved in the quest to reduce GHG emissions in our nation. Concrete examples show what governments, local councils, civil society organizations, and other stakeholders have been doing to strengthen education and training on climate change, both locally and regionally.
Kate Ringness of the NY Jobs Project adds that “a good starting place for any state looking to expand advanced energy manufacturing would be to think about its resources and how they can work together – what we call an economic cluster. The idea behind an economic cluster is to grow an industry holistically. That means encouraging cross-pollination between innovation, access to capital, workforce development, the value chain, and the local market to support a robust industry.”
Closed Door vs. Open Communications
Neoliberalism: No restrictions on manufacturing, no barriers to commerce, no tariffs: that was the neoliberal economic vision that Adam Smith described. He said free trade was the best way for a nation’s economy to develop. Such ideas were liberal in the sense of no controls. This application of individualism encouraged free enterprise and free competition — which came to mean, free for the capitalists to make huge profits as they wished. Neoliberalism, according to CorpWatch, means embraces liberating “free” enterprise or private enterprise from any bonds imposed by the government, no matter how much social damage this release of responsibility causes.
Sunrise: “We grow our power through talking to our communities.” With pledges to talk to neighbors, families, religious leaders, classmates, and teachers about the Green New Deal, the Sunrise youth are seeing strength and work rooted in local communities. Local knowledge around climate and energy issues like this needs to be considered as a strategic leadership element when advocates work toward inclusivity, cultural respect, and equity. Enhancing quality of life for all people includes transitioning from reliance on fossil fuels and the movement toward renewable clean energy sources like solar, wind, micro-hydro, and biomass.
Inequality vs. Embracing Diversity
Neoliberalism: The organization of labor and collective bargaining by trade unions are portrayed by neoliberalists as market distortions that impede the formation of a natural hierarchy of winners and losers, says Monbiot. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are seen as both counterproductive and morally corrosive.
Sunrise: “We are Americans from all walks of life.” The Sunrise Movement has embraced people across “colors and creeds, from the plains, mountains, and coasts.” They acknowledge that the power of the wealthy might be a divisive force, but, through valuing each other in their differences, the Sunrise youth can unite in a shared fight to make real the promise of a society that works for all. Rep. Ocasio-Cortez already has shot back to the Green New Deal’s vocal opposition, noting that most queries into its financial grounding seem to arise in bad faith. Why is it, she retorts, that these questions arise only in connection with useful ideas, not wasteful ideas?
Alongside an emerging pattern of renewable industry growth comes the major challenge to educating future professionals. There is an essential need to build a conduit from the classroom to installation worksite. Since renewable energy is still considered an emerging field, many students have a limited understanding of how to translate engineering theory into actual solar practice. Professional role models who offer their personal insights and industry experience narratives can offset those gaps and create a robust, diverse, and more equitable renewable energy workforce.
Implicit Aggression vs. Passivism
Neoliberalism: A paper for the International Monetary Fund outlines how, although growth benefits are uncertain within neoliberal policies, costs in terms of increased economic volatility and crisis frequency seem more evident. Since 1980, there have been about 150 episodes of surges in capital inflows in more than 50 emerging market economies. About 20% of the time, these episodes end in a financial crisis, and many of these crises are associated with large output declines. In addition to raising the odds of a crash, financial openness has distributional effects, appreciably raising inequality.
Sunrise: “We are nonviolent in word and deed.” Understanding that maximum participation is necessary in order to achieve climate action goals, the Sunrise Movement has adopted an explicit nonviolent approach to activism. Scientific information is not prescriptive because it does not mandate or require specific public policy. By providing knowledge of the harm caused by human activities and its complex mitigation process, the Sunrise Movement is drawing upon scientific evidence of existing and potential harm from anthropogenic global climate change. That gives rise to public policy and ethical concerns, which can be upsetting to some people whose livelihoods and cultural ways of being have surrounded fossil fuels. By asking people to accept that asking people to accept an ethical responsibility to adopt urgent actions to reduce GHG emissions, the Sunrise Movement is interrupting many people’s flow — that feeling of calm and certainty — in order to accept the reality of a value–neutral scientific problem. Agreeing to non-violent discourse is a necessity if the Sunrise Movement is to inspire real institutional change.
The unwillingness of policy makers in the US to date to reduce GHG emissions in some proportion to its historical emissions, given that they have known for over 30 years about their impacts, mocks principles of democracy. In a report on climate change in the journal Ethics, the authors ask of fossil fuel companies and climate change, Do all citizens actually have equal rights? Does anyone have the right to knowingly impose preventable harm on those who have not given their consent to being harmed?
A Closed Circle vs. Telling and Respecting Multiple Perspectives
Neoliberalism: The problem with transparency does not begin at the highest echelons of the government. A transatlantic network of academics, businessmen, journalists, and activists funded a series of think tanks which promotes the neoliberal ideology –the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies, and the Adam Smith Institute.
Sunrise: “We tell our stories, and we honor each other’s stories.” From Elizabeth Warren to Nina Turner, to the Occupy alumni who embraced the 2016 Sanders presidential candidacy, now more than ever, there is a stronger field of what Klein calls a “coalition-inspiring progressive leaders out there than at any point in my lifetime. We are ‘leaderful,’ as many in the Movement for Black Lives say.” Voices like those from the Sunrise Movement and Ocasio-Cortez are fear-inspiring for the fossil fuel industry, hence the oft-cited media positioning of the Green New Deal as “dangerous.”
False Meritocracy vs. Open Discussions of Financial Privilege
Neoliberalism: The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Sunrise: “We ask for help, and we give what we can.” Dedicated to each activist offering an individual contribution, the Sunrise Movement recognizes that youth come from different financial backgrounds which frame their activism. “Some of us give time through volunteering anywhere from 1 to 50 hours per week. Some of us give money. Some of us donate housing or meeting space. We invite our community into the movement by asking for the help we need.” Massive change in the factors that affect US household finances have occurred in the last 30 years : jobs, wages, benefits, education, technology, and financial products. A report by the Stanford Social Innovation Review states that it’s clear that we need new products, programs, and policies designed for the actual financial lives and choices that American households face today.
Right to Profit vs. Making Change Incrementally
Neoliberalism: The Adam Smith Institute feeds into a clearly delineated ideological assumption: “The private sector, rightfully driven by the profit motive, tempered by tolerance for risk, rewards innovation.’” Such a statement illustrates the trust’s commercial basis.
Sunrise: “We take initiative.” Thomas Friedman, New York Times opinion columnist, says he likes “like the urgency and energy she (Ocasio-Cortex) and groups like the Sunrise Movement are bringing to this task. So for now I say: Let a hundred Green New Deal ideas bloom!” And maybe that’s the key: it’s time to celebrate innovation in practical and amazing, far-reaching ways for clean tech to really become everyday in our lives.
Financial Rewards for the Few vs. a Rising Tide
Neoliberalism: Economic growth has been markedly slower in the neoliberal era, which Monbiot describes as since 1980 in Britain and the US, than it was in the preceding decades. Oh, but there’s one caveat: the very rich haven’t experienced this slow economic growth at all. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatization, and deregulation.
Sunrise: “We embrace experimentation, and we learn together.” Like the Sunrise Movement, Friedman envisions what such experimentation might look like: “If I were drafting a Green New Deal platform today, it would put in place steadily rising mileage, manufacturing and emissions standards; stronger building codes; and carbon market prices that would say to our industries and innovators: Here are the goals, here is the level of clean power or efficiency that you have to hit every year — and may the best company win.”
Consumerism vs. Mutual Care
Neoliberalism: Neoliberalism grabs onto competition as the defining characteristic of human relations. That means people aren’t citizens but consumers. Consumers prove their patriotism by buying and selling. Naomi Klein decries neoliberalism as the causal factor for the political turmoil around us, arguing that policies of deregulation, privatization, austerity, and corporate trade have forced living standards to decline precipitously. People, she says, “have lost jobs. They have lost pensions. They have lost much of the safety net that used to make these losses less frightening. They see a future for their kids even worse than their precarious present.”
Sunrise: “We take care of ourselves, each other, and our shared home.” A 2019 report by Oil Change International states that the US is on pace to release 120 billion tons of new carbon pollution—”equivalent to the lifetime CO2 emissions of nearly 1,000 coal-fired power plants”—into the atmosphere between 2018 and 2050. “If not curtailed, US oil and gas expansion will impede the rest of the world’s ability to manage a climate-safe, equitable decline of oil and gas production,” the report warns.
Glass Ceiling vs. Intersectionality
Neoliberalism: Neoliberalism is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties, argues Metcalf. It is a name for a premise that, quietly, has come to regulate all we practice and believe: that competition is the only legitimate organizing principle for human activity. He adds, “There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; between the market as unique discloser of value and guardian of liberty, and our current descent into post-truth and illiberalism.”
Sunrise: “We stand with other movements for change.” Guided by the knowledge that it takes numbers to foster political and social change, the Sunrise movement is motivated by an intersectional approach to gaining, winning, and holding power at every level of government. “We work with other movements who share our values and are also working to win political power.”
“Great” Again vs. Resilient Determination
Neoliberalism: The greater the failure, the more extreme the neoliberal ideology becomes, according to Monbiot. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatize remaining public services, rip holes in the social safety net, deregulate corporations, and re-regulate citizens. The self-hating state, he says, now sinks its teeth into every organ of the public sector.
Sunrise: “We shine bright. There are hard and sad days, to be sure.” Who believes that America can remain a great country and not lead the next great global industry? Friedman asks. The Sunrise coterie is well aware that the activism ahead won’t be easy work, but they are committed to bringing a spirit of positivity and hope to their work. “Changing the world is a fulfilling and joyful process, and we let that show.”
This optimism is reminiscent of social activist, Rebecca Solnit’s plea in 2004.
“I want to illuminate a past that is too seldom recognized, one in which the power of individuals and unarmed people is colossal, in which the scale of change in the world and the collective imagination over the past few decades is staggering, in which the astonishing things that have taken place can brace us to enter that dark future with boldness. To recognize the momentousness of what has happened is to apprehend what might happen. Inside the word emergency is emerge; from an emergency new things come forth. The old certainties are crumbling fast, but danger and possibilities are sisters.”
Klein asserts that the neoliberal agenda is not the only way forward for the US.
“A good chunk of Trump’s support could be peeled away if there were a genuine redistributive agenda on the table. An agenda to take on the billionaire class with more than rhetoric, and use the money for a green new deal. Such a plan could create a tidal wave of well-paying unionised jobs, bring badly needed resources and opportunities to communities of colour, and insist that polluters should pay for workers to be retrained and fully included in this future.
“It could fashion policies that fight institutionalised racism, economic inequality and climate change at the same time. It could take on bad trade deals and police violence, and honour indigenous people as the original protectors of the land, water and air.”
The Sunrise Movement has embraced the idea that those affected by environmental problems must be included in the process of remedying those problems. This group of youth activists are proof that citizens of all walks can engage in activism on behalf of environmental justice. After all, in a democracy, it is the people, not the government, who are ultimately responsible for fair use of the environment.Sources
Solnit, R. (2004). Hope in the Dark. New York: Nation Books, p. 12.
Copyright-free images from Pixabay
January 21st, 2019 by Jesper Berggreen
10 months ago, CleanTechnica’s Kyle Field wrote about the plans for the first municipality in Denmark to convert its bus fleet to all-electric. Now, the local media TV2 Lorry reports that the buses are ready to ship from China. In fact, Johnny Hansen, CEO of the company in charge, Umove, went there to make sure that the buses are shipped on time to the town of Roskilde with 50,000 residents. Umove East is the subsidiary that won the tender in early 2018 to add a fleet of 20 electric buses including service facilities to the city.
In Roskilde Municipality, close to a million miles is covered by bus each year, and silence is coming to all that travel. All of the city’s old diesel buses are to be replaced by the electric alternative. When the electric buses are fully phased in, the transition from diesel to electricity will save the environment 1,400 tonnes of CO2 emissions per year.
Roskilde is situated at a north facing fjord, and in recent years strong wind from the north has caused a lot of problems with flooding. That kind of thing is apparently what’s needed to motivate politicians to make changes. “In Roskilde municipality we have felt the effect and consequences of climate change,” says Roskilde’s mayor, Joy Mogensen to TV2 Lorry. “No more talk, but more action for a sustainable world,” she adds. Well, imagine if that was the global norm in environmental politics. According to the municipality’s own calculations, the extra cost of switching from diesel to electric is close to zero.
Umove East is currently building a large service center in Roskilde, where the new electric buses will be based from April 19th. The plan is to phase in the buses slowly, so that personnel can get used to the inevitable new routines regarding driving, charging, and servicing. Like any other electric vehicle owner, there is a steep learning curve. But boy, are they in for a treat. I mean, the drivers and the passengers will love the smoothness and silence, and the service guys, well, they might be bored…
The electric buses will serve 2.8 million passengers a year, and since there are no current plans for charging anywhere else than at the service center, those batteries will be large and/or swappable. I reached out to COO Tim Valbøll for specifics in terms of bus size,manufacturer, battery capacity, and charging:
The 20 buses, of which 3 are spare buses, are supplied by Chinese manufacturer Yutong — the world’s largest bus manufacturer, with a current production capacity of 550 buses a day (not just electric).
The buses will run about 1,500,000 km (930,000 miles) a year with almost 20 hours of operation each day for a number of the buses.
All buses are the 1211M model with room for 67 passengers, and they will primarily be charged at night at service facilities in Roskilde, with renewable energy for the most part. Some buses will also be charged during the day, due to some routes exceeding the maximum range.
The expected range is about 300 — 350 km in all-weather conditions all year round. There will be 2 containers housing transformers and main charging hardware, in addition 10 charging stations, where the buses are plugged in.
The buses are each equipped with 12 batteries that holds a total 394 kWh in capacity and can be fully charged (0 — 100%) in 2 to 5 hours.
A contract for daily operations has been made with traffic company Movia for a 12-year period, and it will be interesting to see to which degree these buses will change the logistics, operations, and economics of this relatively small community. Needless to say, the experience itself on such things as service and reliability will be worth the effort. Compared to large scale projects like the 16,000 electric buses deployed in Shenzhen, China in 2017 that Tim Dixon covered on EVObsession, this small project will be easier to evaluate in the short term. Rest assured we will follow-up on how this develops.
Image credit: umove.dk
Economists Agree: Carbon Fee Simplest, Most Effective Way To Reduce Carbon Emissions
January 21st, 2019 by Steve Hanley
Conservatives Reactionaries would gladly kill every living thing on Earth if it means they get to keep pushing their neoliberal free market agenda. The lie that serves as the foundation for their twisted logic is that businesses should pay nothing for the harm they do to society and to the environment. Their objective is unfettered exploitation of natural and human resources in pursuit of continued growth and obscene profits. These are the idiots who create theories like “trickle down economics,” then sell them to the gullible as sound economic policy.
A group of 45 prominent economists have submitted a letter to the Wall Street Journal arguing that a a fee on carbon coupled with a rebate program that returns most of the money collected to the citizenry is the way out of the box that liberals and conservatives have built for themselves in which they argue perpetually about whether government regulations should or should not be used to address the issue of climate change that is strongly associated with rising carbon emissions. [Editorial aside #1: Why publish a letter at the Wall Street Journal which requires a subscription to read? Is this some sort of economists’ joke?]
That debate will go on until the sun explodes into a giant supernova in a few billion years. Engaging in the debate is like rearranging the deck chairs on the Titanic just before it sinks beneath the waves. The carbon fee proposed by the economists would accomplish the goal of reducing carbon emissions virtually overnight. People make economic choices all day every day, whether it is deciding which brand of corn flakes to buy or which electric car to own.
[Editorial aside #2: I refuse to call it a carbon tax. The word “tax” sends shock waves through the central nervous system of all humans. Calling any proposal — no matter how sensible — a “tax” is to guarantee that it will never get serious consideration.]
According to the Washington Post, which apparently does have a subscription to the WSJ, the letter was signed by virtually every chair of the Council of Economic Advisers since the 1970s, including Alan Greenspan, Ben Bernanke, and Janet L. Yellen along with several Nobel laureates in economics. The signatories said, “A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary,” calling climate change a “serious problem” that needs “immediate national action.”
“Among economists, this is not controversial,” said Greg Mankiw, the chair of the Council of Economic Advisers under George W. Bush. “The politics is complicated, the international relations is complicated, but the economics is really simple.”
The fee, says the Post, “would add to the price of any good or service that uses carbon, especially fossil fuels. It means energy bills, gas and flying would cost more, at least at first. But the economists call for the government to return all the revenue raised from the tax directly to U.S. citizens, with a goal of effectively paying people to help address climate change.”
The letter goes on to say, “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,” the letter states. Janet Yellen, who chaired the Federal Reserve until recently, says “There is a substantial rebate. It’s estimated that if we were to start with something like a $40 a ton carbon tax that would amount to $2,000 per family, so it is a very substantial rebate.”
Some CleanTechnica readers may be experiencing déjà vu at this point. What the economists are recommending is pretty much the carbon fee system instituted by the Canadian province of British Columbia in 2008. Canada as a whole has begun a carbon fee program, although it is mired in internecine rivalry between the various provinces and the federal government and has uncertain political support.
Assuming the average family gets a rebate of $2,000, some will put that money to work to purchase even more environmentally friendly technology while others will blow it all on the purchase of a new Belchfire 5000. That’s how economics works.
The carbon fee proposal is not as complex as a “cap and trade” program, which makes it largely self administering. The fee establishes the choices available and people make their own decisions based on what they perceive to be in their own best interests. Can’t get much more “free market” than that, can we?
The politics of putting a carbon fee in place are complex and daunting. Matthew Rooney, a
conservative reactionary thinker at the George W. Bush Institute in Texas tells the Post, “There is no appetite on our side to do” a carbon tax, “Maybe if Mar-a-Lago gets washed away, that will change.” Rooney is head of something called the economic growth initiative at the institute. [Editorial aside #3: Isn’t “George W. Bush Institute” an oxymoron?] [Editorial aside #4: There are no sides, Rooney, you jackass. There is life on Earth and there is no life on Earth. Which “side” are you on?]
“We think this can pass in 2021,” says Ted Halstead, chief executive of the Climate Leadership Council, which helped circulate the letter. “We want to get [a carbon tax and dividend] introduced this year. We think this becomes the consensus, bipartisan solution in the 2020 election cycle.”
The letter does not specify the initial price that should be set on carbon, but does suggest it be “sufficiently robust and gradually rising,” although Janet Yellen has mentioned $40 a ton in her public comments. “I actually think a carbon tax together with rebates is, in some sense, the most conservative way to deal with climate change,” says Greg Mankiw said. “Everything else means more intrusive government.”
Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich
Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.
But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy.
It has always been about that. Look at the history of the United States. From 1930 to 1980, the top marginal income tax rate averaged 78 percent; it exceeded 90 percent from 1951 to 1963. What’s important to realize is that these rates applied to extraordinarily high incomes only, the equivalent of more than several million dollars today. Only the ultrarich were subjected to them. In 1960, for example, the top marginal tax rate of 91 percent started biting above a threshold that was nearly 100 times the average national income per adult, the equivalent of $6.7 million in annual income today. The merely rich — the high-earning professionals, the medium-size company executives, people with incomes in the hundreds of thousands in today’s dollars — were taxed at marginal rates in a range of 25 percent to 50 percent, in line with what’s typical nowadays (for instance, in states like California and New York, including state income taxes).
That few people faced the 90 percent top tax rates was not a bug; it was the feature that caused sky-high incomes to largely disappear. The point of high top marginal income tax rates is to constrain the immoderate, and especially unmerited, accumulation of riches. From the 1930s to the 1980s, the United States came as close as any democratic country ever did to imposing a legal maximum income. The inequality of pretax income shrunk dramatically.
The view that excessive income concentration corrodes the social contract has deep roots in America — a country founded, in part, in reaction against the highly unequal, aristocratic Europe of the 18th century. Sharply progressive taxation is an American invention: The United States was the first country in the world, in 1917 — four years after the creation of the income tax — to impose tax rates as high as 67 percent on the highest incomes. When Representative Ocasio-Cortez proposes a 70 percent rate for incomes above $10 million, she is reconnecting with this American tradition. She’s reviving an ethos that Ronald Reagan successfully repressed, but that prevailed during most of the 20th century.
And she’s doing so at a time when there is an emergency. For just as we have a climate crisis, we have an inequality crisis. Over more than a generation, the lower half of income distribution has been shut out from economic growth: Its income per adult was $16,000 in 1980 (adjusted for inflation), and it still is around $16,000 today. At the same time, the income of a tiny minority has skyrocketed. For the highest 0.1 percent of earners, incomes have grown more than 300 percent; for the top 0.01 percent, incomes have grown by as much as 450 percent. And for the tippy-top 0.001 percent — the 2,300 richest Americans — incomes have grown by more than 600 percent.
Just as the point of taxing carbon is not to raise revenue but to reduce carbon emissions, high tax rates for sky-high incomes do not aim at funding Medicare for All. They aim at preventing an oligarchic drift that, if left unaddressed, will continue undermining the social compact and risk killing democracy.
Of course, there are many policies — from the enforcement of antitrust laws to a broader access to education; from the regulation of intellectual property to better corporate governance — that can contribute to curbing inequality in the years to come. And government transfers, whether in the form of income support for families or public health insurance, have a critical role to play.
But redistribution alone will not be enough to address the inequality challenge of the 21st century. All societies that have successfully tamed inequality have done so mostly by curbing the concentration of pretax income — the inequality generated by the markets — for the simple reason that extreme market inequality undermines the very possibility of redistribution. Tolerating extreme inequality means accepting that it’s not a gross policy failure, not a serious danger to our democratic and meritocratic ideals — but that it’s fair and just and natural. It produces its own self-justifying ideology. It vindicates the “winners” of world markets. But vindicated winners, sure of their own legitimacy, seldom share much of their “just deserts” with the rest of society.
An extreme concentration of wealth means an extreme concentration of economic and political power. Although many policies can help address it, progressive income taxation is the fairest and most potent of them all, because it restrains all exorbitant incomes equally, whether they derive from exploiting monopoly power, new financial products, sheer luck or anything else.
A common objection to elevated top marginal income tax rates is that they hurt economic growth. But let’s look at the empirical evidence. The United States grew more strongly — and much more equitably — from 1946 to 1980 than it has ever since. But maybe in those years the United States, as the hegemon of the post-World War II decades, could afford “bad” tax policy? Let’s look then at Japan in 1945, a poor and war-devastated country. The United States, which occupied Japan after the war, imposed democracy and a top marginal tax rate of 85 percent on it (almost the same rate as at home — 86 percent in 1947). The goal was obviously not to generate much revenue. It was to prevent, from that tabula rasa, the formation of a new oligarchy. This policy was applied for decades: In 1982, the top rate was still 75 percent. Yet between 1950 and 1982, Japan grew at one of the fastest rates ever recorded (5.1 percent a year per adult on average), one of the most striking economic success stories of all time.
Contrast Japan in 1945 with Russia in 1991. When Communism fell, Russia was also a poor country, with income and life expectancy well below that of Western economies. In lieu of 85 percent top rates, however, Russians got fast privatization and a top tax rate of 30 percent — again modeled on what was prevailing in the United States at the time (31 percent in 1991). That rate was replaced in 2001 by an even lower flat rate of 13 percent. That shock therapy created a new oligarchy, led to negative income growth for the bottom half of the population, fostered a general discontent with democracy and produced a drift toward authoritarianism.
Progressive income taxation cannot solve all our injustices. But if history is any guide, it can help stir the country in the right direction, closer to Japan and farther from Putin’s Russia. Democracy or plutocracy: That is, fundamentally, what top tax rates are about.
Emmanuel Saez and Gabriel Zucman are professors of economics at the University of California, Berkeley, and the authors of a forthcoming book about tax justice.