Matthew Yglesias nails the subject of climate fairness. I loved the post so much I’m quoting the entire thing here:
Given that coal and oil companies aren’t run by idiots, it’s clear that they’re not going to make arguments of the form “we shouldn’t act to ward off preventable environmental disaster because that would be bad for our shareholders and executives.” Instead, polluting energy firms are going to ride on to the scene as apostles of class warfare, condemning carbon pricing, congestion fees, energy efficiency mandates, and everything else under the sun as an undue burden on the poor.
As readers know, I think that argument is often factual off-base. But at other times it has some real truth to it. If you make energy more expensive to use, this will inconvenience everyone to some extent, but it’ll be much less of a problem for more prosperous people. But what this analysis leaves out is that the price of inaction will also fall hardest on people of modest means. If changing weather patterns make food more expensive, then burden falls hardest on the poor. If natural disasters destroy people’s homes, then it’ll be hardest for the poor to rebuild. If water shortages lead to scarcity and black markets, it’s the rich who’ll be able to get what they need. This is the general virtue of having a lot of money—it can be exchanged for tangible items of value. Consequently, the downside impact of any widespread change will be hardest on those who have little of it. But that’s not a reason to never change our policies if the status quo is going to lead to even worse outcomes. You’re not ultimately doing the poor any good by condemning them to live in a world of climate catastrophe.
I only wish he’d added that it’s entirely possible to price climate emissions and still solve all of the regresivity the problems of higher energy prices; it’s even possible to improve upon current income distribution.
It goes like this: 1) cap carbon, 2) auction the permits, and 3) rebate all the revenue on a per capita basis. The bottom two income quintiles come out substantially ahead; the third quintile also does better, but just slightly; the fourth quintile does slightly worse; and the wealthiest income quintile takes a small hit. Problem solved.
A similar argument is being made internationally:”There is a lot of poverty in India and China. India and China are developing using coal. We should let them (perhaps even help them) because the poverty alleviating effects are more important than the climatic harm imposed.”Of course, most of the same points of rebuttal made in the post above apply. So does the recognition that refusing to take action in a concerted international way is essentially a suicide pact.
Well said. This argument is also being made in BC right now with the new carbon tax. Except, it is a rural v urban divide (not rich v poor).The argument goes: rural folk are more dependent on driving long distances to get to their jobs and industry in rural areas (mining, forestry, etc) are often more directly carbon intensive than urban industry (service, high tech, etc). Therefore, the BC carbon tax hurts the rural north much more than the south.This argument has only some merit, in my opinion. Yes, ruralites will be paying more, but in the short term at least tax rebates will more than cover everyone’s share of the new tax. In the longer term, the rebates will go away, but this will give ruralites enough time to adapt.And, as Yglesias adroitly mentions, ruralites will be most affected by negative affects of Global Warming. The Tyee has some excellent articles on this issue.http://thetyee.ca/News/2008/02/20/CarbonTax/http://thetyee.ca/News/2008/04/04/CarbonTaxNorth/and more…
Eric de Place
But let’s be honest: people in rural areas will, in fact, be hurt more by rising energy prices than by people in cities. That’s the truth. But that does NOT mean we shouldn’t price polluting energy—that’d be the worst case scenario—it means we should be smart about how we do it, and about how we distribute any revenue. And we should keep a sharp lookout for the snakeoil compassion of polluters (and their proxies) who use equity arguments to advance their own interests.
Rereading my post, I think I misrepresented myself a bit. I am strongly in favor of the carbon tax (except that I think it doesn’t go far enough quickly enough). I think that most of the complaining of ruralites will turn out to be unfounded. Much of this complaining is spurred on from conservative organizations like the Canadian tax federation.But, on the other hand, the poor and the rural must feel that they are not being taken advantage of. Unfortunately, this feeling will not come from facts, but from having a good PR team (that’s politics).
Eric de Place
Well, being the pollyana guy that I am, I’d sure like to do what we can to address inequities for low income folks and people in rural areas. There’s a lot we can do substantively that goes well beyond PR.
I agree with the fossil fuel industry on one point: all our current policies will hurt the poor and middle class without solving the emissions problem.There is a very real climate fairness issue here folks.But that isn’t a reason to abandon carbon pricing. It just means we need another tweak to it. Currently all cap-and-trade and carbon taxing results in a flat tax on carbon usage. We need a tiered pricing system and soon.There is no price you can put on carbon that will cause the wealthy to make significant cuts in their ghg emissions AND still be affordable by poor and middle classes. The current path will result in carbon riots long before the wealthy cut ghg much.You might say who cares, except for the fact that research shows ghg emissions strongly tied to wealth. Professor Pacala of Princeton (the “Stabilization Wedges” co-author) has done the math. Worldwide less than 8% of folks are responsible for 50% of emissions. This group has a higher annual income than the average American even. So you can’t make any significant cuts in ghg without big cuts in this group’s ghg emissions. And there is no scheme i’ve seen to price carbon enough to make these folks care. $30/tonne is a rounding error for wealthy in their decisions. Forget it as transformative policy for them.Unless we get carbon pricing dramatically tiered in a way that it impacts wealthy as much or more than poor we will fail. The legitimacy of unequal pain will not survive the ballot box. Without big ghg cuts by wealthiest you can’t mathematically get cuts of the scale needed. We have to impact wealthy ghg levels.Just imagine it was food we were talking about: grains=fossil fuels. You can already see the food riots showing up around the world and we aren’t even trying to reduce grain production like we are with fossil fuels. And while poor are going hungry and rioting, the wealthy are shoving food into their cars and using it to make wallboard and add gloss to magazines and a million other non-food uses.In a way we are super-lucky that it works out that a few wealthy folks are responsible for most ghg emissions. It means big cuts can come quickly with minimal real suffering. It means the people that have to cut the most can easily afford it. It means majority of world can avoid carbon pain.However we do not have a plan in place to address these emissions. Instead we have silence on the issue in government, finance, media, deniers, supporters and even most environmental groups. It’s not surprising that this 8% is also the ones holding the levers in these areas.In fact i think many know that flat-taxing carbon won’t work and it is a way to appear solidly green without actually having it impact themselves now or in the future.If we want to cut ghg emissions we have to be honest about who is causing them and then design policies that will impact their decisions without destroying the lives of the poor. You can’t squeeze blood from a turnip….and you can’t squeeze big ghg cuts from people who aren’t emitting much in the first place.We need to limit the ghg-emissions of luxury livestyles and redirect that capital to low-ghg alternatives. That could be personal carbon-caps or tiered pricing or something else. But we have to start the discussion that current policies won’t do what we want.
A couple examples to illustrate my comment above:1) A wealthy person is building a big vacation in my community. I’ve estimated 100 tonnes of ghg embodied in the cement and steel of foundation so far. A carbon tax of $30/tonne would add $3000 to the price. This is trivial for them in this project and is not going to affect any decisions like this. At the same time most members of my community are having real trouble paying for gas for their used-vehicles. They hate the idea of a carbon tax adding more and more financial pain to their increasingly restricted lives.2) I have friends who have recently decided to have weddings in Costa Rica and Hawaii. These are multi-100-tonne decisions. $30/tonne spread among the guests isn’t going to affect the wealthy folks from making decisions like this. If you jack the carbon price high enough to immpact air travel of the wealthiest 8% of humanity (vast majority of air travel), you will long before cause massive mobility and food price trauma for poor and much of middle class.I could give dozens of recent examples of family and friends making 5, 10 and even 100 tonne decisions for luxury “big life” stuff. I can’t see any of them impacted by $30/tonne. The wealthy are not responsive to the price signals we are creating. Yet the math says wealthy have to do the biggest ghg cutting for us to meet targets. Poor are very price sensitive and already feeling financial pain.This is not a recipe for success.
This is such an engaging topic. Its true that the poor are already being affected by climate and oil politics. I shudder to think how many folks out there are paying for their gas on ever growing credit card debt. However, not having a lot of money does not mean that people are poor, per say. As a rural New Englander amidst an upstart localvore movement on the Vermont/New Hampshire border, I think (some) rural folks stand to make out pretty well in a post-peak-oil, climate-changed world. We have a lot more potentially food producing land than people out here. Its likely to be a harder life than we have now, but two generations ago we lived just fine on family run subsistence farms (which were mostly organic!). Not to mention our entire culture is currently plagued with depression, obesity, and TV head. We are poised to rediscover our local communities and personal ties to Gaia. I do however worry about the transition – I think most people are out of denial now and are waiting to see what will happen. Here’s hoping we end up with some excellent leadership.~A~
Parsing out pseudo-class-warfare in this way is non-productive. More than a century ago, in the 1870s, Italian economist Wilfredo Pareto observed that twenty percent of the salesmen make eighty percent of the sales, twenty percent at school or church do eighty percent of volunteering, etc., this is called the 20-80 rule or Pareto’s Law, it probably is true for air travel also. Those of us who travel one or two (currently no) times a year benefit from a system mostly used by the men and women who work the global economic system in a hands-on fashion, who spend a large fraction of their time in the air, in airports, or traveling to and from airports. If, in the near future, there is a serious shrinkage in the global air transport system due to fuel costs/shortages (Peak Oil), everyone will travel less, but Pareto’s Law will still hold: a subset of today’s twenty percent will still do eighty percent of a subset of today’s eighty percent of air travel. To reduce carbon usage by the air travel system, increase efficiency – the Boeing 787 Dreamliner and the giant Airbus-380 are both supposed to be 30 percent more efficient – then change the energy source: algae-based biodiesel will start to be scaled up soon: http://www.valcent.net/s/NewsReleases.asp?ReportID=290918&_Type=News-Releases&_Title=Valcents-Releases-Profitable-Initial-Production-Estimates-For-its-Vertical-%20, this will serve as a stopgap until electric aircraft evolve. Aircraft only use 10 percent of oil-based fuel, trains about 30, the rest personal vehicles. Large scale conversion of personal vehicles to (algae-based) biofuels and electric systems will cut the connection to ever-more-expensive oil-based fuels, ending the Oil Age, and the large contribution of CO2 from the burning of oil-based fuels to global climate change.