This weekend I read Peter Barnes’ Climate Solutions: What Works, What Doesnt, and Why. I highly recommend this short, pithy and easy-to-understand book that discusses the pros and cons of major climate policy proposals. I picked it up at my library and it took me all of about 2 hours to read. Sadly, though the book’s introduction stated it would be updated and available on the onthecommons.org website, I could not find a working link to it there, so I am not clear what its current status is.
In a nutshell, Barnes’ argument rests on the fundamental tenet that the atmosphere is undergoing a very severe case of market failure. We all need it, we all share it, and yet, we’re letting everyone dump their waste products into it without charging any of them, or us, a single penny, for its use. If we don’t find a way to limit these activities, well- we find ourselves in the situation we are now, with CO2 nearing 400 ppm and the disastrous consequences that we are already seeing unfold. While technology and innovation can help us get some of the way there, its a pretty fundamental truth that we are going to keep pumping GHGs into the atmosphere as much as we want unless we find a way to actualize what are the real costs of these practices.
So how do we correct this failure? As Barnes lays it out, we have some basic choices:
- A carbon tax
- A carbon cap
Barnes makes some pretty compelling arguments for why three of the four of these wont work to solve our climate crisis. A carbon tax is going to have to be phenomenally high to really change our behaviors – we’re addicted to fossil fuels much like alcohol and tobacco, and high taxes havent eliminated those substances; carbon taxes tend to be regressive, hurting the poor most; and carbon taxes depend on a sustained political commitment to maintaining such a tax over time. We can all read the writing on the wall on that one. To his reasoning I would add that I am quite cynical given our legislative environment that if a carbon tax was designed to benefit investment in alternative energy development, or public transit, that it would actually meet these goals without getting siphoned off into pork-barreling.
Regulations, like CAFE standards and appliance efficiency standards are important, but they are a piecemeal way to address the problem, moving industry by industry, and they force industries to do things they wouldnt otherwise do, which is an uphill battle. And government investments, such as grants or tax breaks to incentivize climate-friendly behavior, is challenged by the same line of reasoning I laid out above on taxes- that is, that government will make the right investment choices and not be swayed by lobbyists and local priorities.
Barnes lays out his argument for why a carbon cap is the best chance we have for making a major difference in emissions, because it is the only approach that sets an absolute limit, rather than incentivizing or de-incentivizing behaviors. A carbon cap would function by issuing permits that would be reduced over time to get to the target- many people have thrown 80% reduction in 40 years as an environmentally necessary goal, a goal which is slipping away from us on a daily basis, but that’s a rant for another time.
The keys to successful carbon capping according to Barnes are 1) its imperative not to give away permits, but to auction them off. Permit giveaways have been a major reason for failure of European capping policies, which handed windfall profits to polluters with little benefits to consumers or the atmosphere; 2) the proceeds of auctioning permits should pay back to citizens as dividends, which are an important part of the policy to offset rising carbon prices that will inevitably affect everyone’s pocketbook, and 3) the cap must be upstream and without safety valves, meaning it needs to cover all the sellers of carbon-based fuels without exception, physically reducing the carbon flowing through the economy, and without a ceiling, or safety valve, which would allow the government to issue more permits if the price hit a certain value, hence undermining the purpose of the cap (and hence why oil companies support a safety valve in carbon cap policies). Another really smart idea in here is a carbon border tax- if the US were to raise the price of carbon while China did not, a carbon border fee could be placed on goods from countries with lower carbon prices than we have, thus helping even out the playing field for American manufacturers.
Well, this book was written five years ago, and we have seen astonishingly little in the way of any attempt at a policy or set of policies as far-reaching or comprehensive as what Barnes has laid out above. While a few politicians have made symbolic attempts to introduce carbon tax legislation, attempts which are likely to go just about nowhere in a republican-controlled house, noone seems to be even murmuring the phrase carbon cap. In the absence of meaningful federal policy, Barnes does offer a few rays of hope by outlining some very meaningful steps that can be taken on state and municipal levels, including green building, prioritizing public transit, and regional cap-and auction systems. Several of these initiatives have been and continue to be promising as a force for bottom-up change, and as Barnes points out, there is no reason not to wholeheartedly embrace these efforts as part of the solution, indeed what may currently be the most politically feasible part of the solution. But it is inevitable that these solutions will be more piecemeal, more complex, and more uneven in implementation than tackling this issue at a national, and, importantly, international level.
I think if I were to take one lesson away from this book- perhaps it is a completely obvious one, but its one that I do not feel is part of our collective consciousness at this point in time- it is the idea of the atmosphere as a common good. There is a greater sense of this understanding around the issue of clean water- that its not fair for a company to dump pollution into a stream or lake, because everyone downstream suffers. But somehow, we are not yet there on our atmosphere, and we have to be- we have to understand that it is fundamentally unfair and inequitable to allow the few to poison the resource that we all share and depend upon. That very basic premise is the foundation for insisting that carbon has a value, and therefore, should have a price.