Carbon Fee & Dividend; James Hansen is still fighting the good fight.

James Hansen is still speaking out for a carbon fee & dividend system. In an interview with Yale 360 a few weeks ago, he said

The one thing, which is most important, is the assertion by the fossil fuel industry and the people who support them, that it would be expensive to solve the problem, is absolutely wrong. There have been economic studies that show if you add a gradually rising fee to fossil fuels, by collecting a fee on fossil fuel companies at the source, the domestic mine, or port of entry, and if you distribute the money to the public, an equal amount to all legal residents, it would actually spur the economy. (emphasis added)

And he doesn't even mention the reduction of CO2 which would result from making carbon more expensive than other options. In one fell swoop, F&D could make irrelevant the many other laws and regulations aimed at reducing greenhouse gases and related pollution.

The concept of a carbon fee & dividend is nothing new. Hansen wrote a letter to President-elect Obama urging him to support it. But it apparently wasn’t well understood. Back then, even Worldwatch Institute headed their article on his letter Hansen to Obama: Support a Carbon Tax. Yet, right up top, it said

In his plan, Hansen recommends levying a rising tax on fossil fuels and redistributing 100 percent of the proceeds to taxpayers — a tax and dividend approach. (again, emphasis added)

  • The Citizen's Climate Lobby has been promoting the idea since at least 2010 (per the Lobby Meetings and Published Media references on the About page).
  • In 2013, Bernie Sanders and Barbara Boxer introduced the Climate Protection Act of 2013. From the press release:

    It would impose a fee on carbon emissions at their source, such as coal mines, raising the price of fossil fuel energy. But instead of giving the proceeds to the government, three-fifths of the money would be refunded to U.S. residents.

    Well, it’s not fully revenue neutral, but it’s a start. And the number of additional co-sponsors? Zero. It died without even a whimper.

  • In 2014, Sheldon Whitehouse and Brian Schatz introduced the American Opportunity Carbon Fee Act. Number of additional co-sponsors? Zero. Not even Sanders or Boxer signed on. Granted, like the previous bill, it didn’t include a firm commitment to return all revenues to the people (it makes it much more complicated than that), but it includes a host of things expanding on the idea of a carbon fee. It includes import/export consideration and a section on escaped methane, for example. (I didn’t read the Sanders/Boxer bill, so I don’t know if it included those items). And it, again, died without even a whimper.
  • And in the last Democratic debate, Sanders challenged Clinton on whether she supported a carbon tax. Did he say dividend? If so, I missed it. But at least climate change finally got mentioned. Based on the results of the NY primary, it’s probably fair to say that this, too, died with barely a whimper.

I firmly believe that a fee & dividend approach would initially be derided as a TAX!, but would lead to a major change in mindset once the rebates started (Do Alaskans complain about their oil tax?). It seems to me that the fee & dividend idea is a recognition of how the fossil fuel industry damages the commons, and is both progressive and democratic. Would that it were also Democratic.


1. I originally published this at DK (where the silence was deafening). Force of habit (although my diaries are rare as Wolverine scat). I will publish here, first, in the future.
2. This story was triggered by an item today(yesterday) in my strongly conservative and corporatist paper on the interview which took place back on the 12th.
3. Oh, and I’ve been on board since 2006; my first diary was about it. (And it, par for the course, faded away with barely a whimper).
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Steven D's picture

Meanwhile we have the "major" Dem candidate refusing to talk about it or promoting fracking as the solution, or outright denial by the Republicans.

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"You can't just leave those who created the problem in charge of the solution."---Tyree Scott

Hawkfish's picture

is a carbon tax. You can find out more about it here, but the TL;DR is:

  • Tax carbon at $25/ton (corrected), increasing over time and indexed to inflation
  • Reduce the regressive sales tax by 1%
  • Fund the approved (but unfunded) state contributions to the earned income tax credit
  • Reduce the excise tax on manufacturing (to protect jobs)

We are looking for canvassers and other volunteers. Cash helps too - the ff industry will come after us at some point.

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We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

I was thinking more along the lines of $0.25/lb. That would still only add about $1.40 to the price of a gallon of gasoline (6.3 lbs/gal * 85% carbon * .25).

I think 0.25/ton is far too tentative. Who's going to even notice it?

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Hawkfish's picture

$25 a ton! I will correct my comment now. (That's what I get for posting too early in the morning...)

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We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

Cassiodorus's picture

http://monthlyreview.org/2013/02/01/james-hansen-and-the-climate-change-...

Hansen’s climate-change exit strategy thus has definite limitations. Despite its progressive features it is mostly a top-down, elite-based strategy of implementing a carbon tax with the hope that this will spur the introduction of necessary technological changes by corporations.

Actually Foster understates the case, as I'll be arguing in a paper to be published soon. The necessary technological and social changes are so vast that the carbon tax doesn't really do much for climate change mitigation. By climate change mitigation, here, I mean real climate change mitigation, and not the fakery they would have you believe is climate change mitigation.

The usual promotional literature for a carbon tax claims some sort of power it's supposed to have to elicit "behavior modification." Don't worry; if it ever got to that, the fossil-fuel addicts would either 1) openly defy the law, refusing to pay the tax, or 2) have it removed from the books, one way or another. Otherwise a carbon tax makes a small revenue enhancement in marginal states where the local economies are run on boutique capitalism.

The conceptual flaw in the whole idea is that any "behavior modification" which a carbon tax would presumably coerce would take place in a whole environment of capitalist "behavior modification" designed to provide profits for the owners of capital (including fossil fuel capital) while scaring the rest of us with the prospect of poverty (and thus minimizing at every turn our ability to do something to mitigate climate change). Unless you can change that greater context of "behavior modification," you won't get much in the way of real climate change mitigation.

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

the fossil-fuel addicts would either 1) openly defy the law, refusing to pay the tax

How does one refuse to pay a tax that's assessed at the source? The carbon compound suppliers will have no choice but to add that tax to the price when they sell it. And the end customers will have no choice but to pay the price, or not buy.

mostly a top-down, elite-based strategy

????? In its essence, it's the opposite of that. There's no CRS (Carbon Revenue Service) demanding payment from everyone in the country, there's an agency that collects taxes from the producers. The closest to top-down is a connection to the IRS, for distributing the dividends. As for "elite-based", I don't even know what that means.

Otherwise a carbon tax makes a small revenue enhancement in marginal states where the local economies are run on boutique capitalism.

and

scaring the rest of us with the prospect of poverty

This is a redistribution approach. There is no "revenue enhancement in marginal states". There is no revenue enhancement for states at all. It (under my approach) all goes back to the people. The people facing "poverty" would be those consuming far more fossil fuels than normal. Those who are more frugal than the average will have their income go up.

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Hawkfish's picture

then it is worth supporting. That industry is many things, but their greed is finely honed.

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We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

Cassiodorus's picture

How does one refuse to pay a tax that's assessed at the source?

Is it that they're going to take a portion of the fossil fuels away as "payment in kind"? What does "assessed at the source" mean? There's no money to be found in the infrastructure of an oil rig. To find money to tax, you have to find a source of money -- i.e. people with money. The source of fossil fuels is the oil rig, not people with money. It is you who are making no sense.

As for "elite-based", I don't even know what that means.

Let me lay it out for you then. Hansen is trusting THE ELITES to provide America and the world with an alternate infrastructure to replace the one that burns fossil-fuels and is thus taxed. Why not just have the government provide the infrastructure directly? The fact of the matter is that a carbon tax, by itself, provides the public with NO infrastructure whereby the carbon tax might be somehow avoided. Did you imagine that the rebates from the tax would magically create an alternative-energy infrastructure all by themselves?

This is a redistribution approach.

Passing on the cost of a tax to the consumers is also a redistribution approach. Capital accumulation is also a redistribution approach. Unfortunately for the advocates of a carbon tax, those are the redistribution approaches which rule the world these days. A carbon tax doesn't offer much resistance to those redistribution approaches.

The people facing "poverty" would be those consuming far more fossil fuels than normal.

"Than normal." What does that mean? The capitalist system's demand for energy is potentially INFINITE. Its limits are the limits of production in the material world. That's the REAL NORMAL. What kind of capitalist system exists in which businesses don't expand or contract, in which people and businesses don't consume more or less according to "what the market will bear," or in which economic growth isn't dependent upon ever-increasing usage of natural resources (both alternative and fossil-fuel) in order to expand the system, pay off people's debts, provide return on investment, allow businesses to compete for market-shares for the products they sell, and do what a capitalist system does?

There is no "more fossil fuels than normal." You are not going to mitigate climate change, or do anything more than make a tiny adjustment to the out-of-control, train-running-off-a-cliff system that is the capitalist system, with a carbon tax.

Please go back to read John Bellamy Foster. He makes more sense than you do.

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

"Assessed at the source" means assessed at the source. For every barrel of oil pumped out of the ground, for all the coal mined, for all the natural gas pumped, the company doing the pumping or mining pays a tax. Where do you come up with "payment in kind". That's ridiculous.

"Hansen is trusting THE ELITES to provide". You apparently assume that all business, all inventions, all innovations, come from the elite. That's ridiculous.

"Than normal." What does that mean?

Well, pardon me. I should have said "average". Since the total consumption fee revenue is equally distributed, then the effect is that everyone pays the fee on the average usage - and gets it back. If they used less than the average, they still get the same amount. If they used more than the average, they get the same amount. Heavy users are therefore subsidizing lighter users.

And, I'm done.

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Cassiodorus's picture

No, of course not. The tax comes from the business coffers, with money which comes from the consumers.

"Hansen is trusting THE ELITES to provide". You apparently assume (something I didn't assume.)

Could you please read my actual argument?

Heavy users are therefore subsidizing lighter users.

Businesses which expand (even if they're manufacturing alternative energy using fossil fuels) are going to subsidize those which are lousy enough to shrink? People who must endure long commutes to work (because those are the jobs they can find) are going to subsidize those lucky enough to find work at home?

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

Hawkfish's picture

That is what the previously mentioned I-732 does. Instead of returning it "on average", it returns it via Earned Income Tax Credits and reducing a regressive tax.

You are right that the tax will get passed along (although probably not with perfect elasticity) but that incentivises non-carbon consumption. Not everyone can afford an electric car (although used ones are hitting the market now) but those that can't (such as your long distance commuters) are generally covered by the EITC and benefit from the sales tax reduction. Effectively, there is a wealth transfer from the middle and upper classes to the lower. Not perfect, but a step in the right direction.

Now if I ran the zoo, we would stop digging the stuff out almost immediately, tax the crap out of it and start building some CanDu reactors (plus some breeders to reprocess the waste) up on the geologically stable Canadian shield to suck carbon out of the air and turn it into hydrocarbons (like ethanol) that we could dump into existing pipelines. Plus lots of electric cars run on every form of green electricity we can churn out using non-overlapping manufacturing infrastructure. Then have the government manage the power grid (like France, or even my home of Seattle) to keep the greedheads (aka the elites) from poisoning us to save a few bucks. When I get elected zookeeper, you will be the first one I call Wink

I think there is a lot of agreement that we need a revolution to save us, but I fear that will not happen fast enough. Until then, I think the right answer is "all of the above".

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We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg