Sunday, September 13, 2015

An actual strategy for curtailing climate change? Seriously??

My neighbor recently invited me to attend a meeting of a civic action group called the Citizen's Climate Lobby.  I was impressed enough to share their proposed goals, which I wasn't previous familiar with.  If you're anything like me -- an American who cares about the environment but often finds Environmentalists alarmist and feckless -- then you'll find this pretty impressive.

The Citizen's Climate Lobby is -- as its name suggests -- a lobbying group designed to encourage the adoption of a carbon reduction plan called "Fee and Dividend".  Fee and Dividened would place a fee on each ton of carbon produced.  Mining and drilling companies would be required to pay what is essentially a tax on each ton, however that money would then be divided evenly and repaid to every American.

What?

Yeah.  Charge carbon producers and give the proceeds away.  If this makes immediate sense to you, congrats.  I had to have it explained a bit.

First, lets consider that no matter what approach we take towards mitigating the effects of climate change, all approaches would need to seek to end reliance on fossil fuels in about a century.  Secondly, we must accept that this cannot happen in a timely fashion without some government action.  This isn't to say that the government must take a heavy-handed approach, though.  The free market has demonstrated an ability to encourage innovation to solve complex problems in the past, provided we can foster the market forces to encourage this innovation without stifling our economy or producing unwanted side-effects.  In this case, we would like to financially disincentive the production of greenhouse gases so that the long-term danger of continued use is reflected in the costs of using carbon.  Currently there is a disconnect: carbon emission is creating costs to human health that are not felt directly by the groups and individuals who pay low costs that don't reflect the true burden of producing CO2.

This is the logic which inspires Cap and Trade.  Under Cap and Trade, the government limits the amount of CO2 which companies can freely produce, then allows companies which wish to exceed the cap to purchase the surplus allowances from other companies.  It is a neat idea, but it has several notorious faults.  One is that it raises the cost of emitting carbon -- which is the entire point -- but does nothing to ease the burden this places on the end consumer.  It's good for our planet, but it is very hard on people who have to pay more for gas and heating and may not have room in their budget for this increased expense.  The second problem is that Cap and Trade requires a government-run marketplace for carbon credits.  It's complicated as hell, especially when you consider the incentive it creates for companies to outsource their polluting operations outside of the US.

Fee and Dividend rectifies these two problems.  The increased cost to the end consumer is offset by an annual payout that should compensate Americans for the increases in what they pay due to increased costs in gas and such.  Secondly, it's revenue neutral and requires remarkably little administration.  We don't have to determine where to place caps or oversee the exchange of credits.  We just adjust the cost of producing carbon to reflect the actual cost in dealing with the effects of climate change.  This gets applied as a tariff to all imported oil and gas which comes from countries which don't have some form of carbon-tax applied before it reaches our shores.

The meeting I attended went well.  I was very impressed with the level-headed approach to dealing with carbon emission.  Our group called into an international conference call which began with a 15 minute talk by libertarian Jerry Taylor.  One of the reasons I'm motivated to share all of this is that Taylor's talk was literally the most compelling case for any environmental correction strategy that I've ever heard.  It was very similar to a famous paper he wrote titled "The Conservative Case for a Carbon Tax".  I really recommend at least reading the introduction.  Regardless of whether you're a pessimistic environmentalist or a regulation-averse industrialist, this paper presents a reasonable argument for a reasonable solution.

Wherever you live, consider looking for the chapter of the Citizen's Climate Lobby which is nearest to you.  You don't need to do much.  Just get on a mailing list and be willing to encourage the representative of your district to embrace Fee and Dividend as a moderate and effective response to curtailing the harmful consequences of climate change.

1 comment:

  1. In my opinion, a fantastic blog post. Personal, full of inspiration and hope, and a call to action. You peppered in urgency so we get on the stick to solve climate change ASAP. The consequences of climate disruption are already setting our state ablaze at a trend hotter and quicker than any time in the last 100,000 years. Andrew, thank you for being part of a solution - a market friendly, limited government solution that reduces harmful emissions quickly, creates jobs, raises GDP, and saves lives. It is Carbon Fee and Dividend.

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