There's a pretty simple, viable solution.
Carbon taxes.
Yes, it's hard to get 195 countries to agree to implement a carbon tax, but you could have said the same thing about the ozone layer / CFC problem.
Carbon taxes.
Yes, it's hard to get 195 countries to agree to implement a carbon tax, but you could have said the same thing about the ozone layer / CFC problem.
Carbon taxation plays out as a consumption tax on goods people consume in roughly the same quantities independent of income.
Take fuel as an example. The average american adult consumes about 550 gallons of gas a year for driving. It doesn't matter substantially how wealthy you are - there are only so many hours in the day to drive.
A $20/Metric Ton CO2eq carbon tax means a fuel price increase of 0.18c/gal, or about $100 a year per person. So we'd expect to see consumers either pay this additonal 18c to keep driving on gas, or some close equivalent cost if they find a competitive renewable fuel at this new price point.
So:
- If you are at the 10th income percentile, you make $11/hr and society now expects 9 hours of labor from each adult in your household a year to pay for energy transition
- If you are at the 90th income percentile, you make $29/hr, society expects you to work 3.4hrs a year to pay for transition.
This makes carbon taxation, and related schemes like gas taxes, politically unpopular. See for instance yellow vest protests in France, where gas taxation was a key issue.
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Incomes: https://www.bls.gov/oes/oes_perc.htm
Carbon tax -> fuel cost: http://www.rff.org/blog/2017/calculating-various-fuel-prices...
Fuel consumption: https://www.fool.com/investing/2017/01/14/heres-how-much-gas...
France just threw away a political year on a gas tax they had to roll back. The political fallout, in the form of the yellow vest conservative movement, may well delay further progressive climate reform by another election cycle at least. The fact that a gas tax makes logical sense does not matter, what matters is if it has real world efficacy.
If the climate reform you are passing is causing backlashes that nullify it, we just wasted precious time for no reason. It does not matter how much you think the voting public should just get over themselves.
As an example: There is broad public support for substantially increased rates in top marginal taxation and in capital gains. Raise the money there and use it to subsidize low-carbon or negative-carbon alternatives.
This also highlights that what works is contextual. To my knowledge there is very little opposition to the ongoing rollout of cap-n-trade in the EU. And of course, if you can pass carbon taxation schemes, they are fantastic since they simply pull the external costs into the price and let the market sort it out.
Macron was attempting to make ordinary people pay for the extravagant resource use practiced by the wealthy and by industry.
That is why people riot, because they (rightly) perceive those policies as taking from the working class and giving to the elite.
A hidden assumption in your calculation is that poor people emit the same amount of CO2 as rich people. Poor people may not have a car, and may not take a plane to go on vacation. They are also likely to live in a smaller apartment, reducing the heating/AC costs. This is probably more true if you view this on a global level.
Even if CO2 taxes are regressive, you could think of a way to compensate for this by altering tax rates/brackets
- Some experts just flatly deny it: "low-expenditure households devote a smaller share of their budget to gasoline than do their counterparts in the middle of the expenditure distribution" --- https://dspace.mit.edu/bitstream/handle/1721.1/63747/isgasol...
- Carbon taxes are often less regressive than alternative sources of revenue e.g. sales taxes
- Depends on how the revenue is spent. If, for example, it's used to expand the Earned Income Tax Credit in the US, the overall tax and spend pattern would be progressive.
- The impacts of excess carbon are also "regressive" in that global warming affects poor people more severely. This means that the net effect of a regressive tax which reduces a problem with an even more regressive incidence could be progressive.
The wealthiest 10% of Americans by income spend ~$3,000/year on gas, while the poorest 10% spend only $870/year. So looking at only gas purchases, the wealthy do consume much more gas. This could be caused by differences in vehicles (bigger/luxury cars are more expensive and typically consume more fuel), fuel grade (premium vs regular gasoline), and distance driving (poor Americans are just not driving as much).
- If you are at the 10th income percentile, you make $11/hr and society now expects 9 hours of labor from each adult in your household a year to pay for energy transition
- If you are at the 90th income percentile, you make $29/hr, society expects you to work 3.4hrs a year to pay for transition.
The bottom 10% earns 38% of what the the top 10% earns, and pays 30% of the cost. A carbon tax is a progressive tax according to these calculations.
For starters, high income people tend to have much greater carbon footprints. I, in the top decile, probably quintuple my carbon footprint by engaging in a little bit of unnecessary air travel (living in New England, in 2018 I went once to Shanghai, once to Puerto Rico, and once to Montana). The average private jet owner probably has a carbon footprint 10x - 100x of mine.
Then, you have a tax and it _still_ turns out to be regressive (or even if it doesn't), you can use the tax revenue in a way that disproportionally benefits low income people.
The best policy (IMO) is a carbon fee-and-dividend, where all of the proceeds of the tax are redistributed evenly amongst all residents of the nation.
There is a bill in the US congress that would enact just this policy (https://energyinnovationact.org/) (https://www.congress.gov/bill/115th-congress/house-bill/7173). If you like the policy, let your congressmen know. And everyone else too.
And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures.
> The best policy (IMO) is a carbon fee-and-dividend, where all of the proceeds of the tax are redistributed evenly amongst all residents of the nation.
This seems ideal; get the benefits of moving carbon externalities into the price of consumption and use that revenue to both make the tax palatable and reduce wealth inequality.