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Peter Barnes: Towards a Fair Climate Policy

Peter Barnes, author of Climate Solutions: A Citizen’s Guide and senior fellow at the Tomales Bay Institute, presents the basic principles of a cap-and-dividend climate policy. In easy-to-understand terms, he presents the problem (“the biggest market failure the world has ever seen”), as well as a common sense, truly fair solution that won’t place the financial burden disproportionately on the poor.

Many economists (and others) from a wide range of political viewpoints are coming to support the idea of cap-and-dividend or tax-and-rebate as the most sensible way to address climate change. It’s important to note that the two approaches (cap or tax) are functionally equivalent. Both policies are intended (1) to raise the price of the carbon emissions that cause global warming, thereby discouraging those emissions and encouraging alternatives, and (2) to do so in a way that does not place the burden of adjustment disproportionately on the poor.

If we don’t understand a problem, it’s unlikely we’ll be able to fix it. So let’s begin by asking, with regard to the climate crisis, what is the problem we need to fix? Often in public policy, the problem we need to fix isn’t immediately obvious. Sometimes we see symptoms without seeing the underlying problem. Other times we see part of the problem but not the whole. On the surface, climate change appears to be an environmental problem, or perhaps a technological one. But deeper down, it’s a result of two economic and political failures.

The first of these is a market failure. Humans are dumping ever-rising quantities of greenhouse gases into the atmosphere because there are no limits or prices for doing so. There are, however, huge costs — costs that are shifted to future generations. When people don’t pay the full cost of what they’re doing, but instead transfer costs to others, economists call this a ‘market failure.’ Nicholas Stern, former chief economist at the World Bank, has said that climate change is “the biggest market failure the world has ever seen.”

The second cause of global warming is misplaced government priorities. Because polluting corporations are powerful and future generations don’t vote, our governments not only allows carbon emissions to grow, but subsidizes them in numerous ways. Thus, despite all we know today about climate change, about two-thirds of US federal energy subsidies currently go, for example, to fossil fuels.

It’s important to recognize that these twin failures permeate our entire economy. They’re not problems of the electricity sector, the automobile sector or the building sector; they’re problems of all sectors and must be treated at that level. They distort the behavior of all individuals and businesses. No matter how ‘responsible’ any of us may be, our separate actions can’t overcome what these twin failures make most of us do most of the time. What’s required are fixes for both system failures. We need to limit and pay for atmospheric pollution, and we need to shift government’s attention from dirty fuels to clean alternatives. If we don’t do both of those things, we won’t stop climate change.

Read the whole article here.

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Look Under Your Feet for Global Soil-utions

For several years, Chelsea Green has been publishing books that look under our feet for solutions to some of the most vexing problems facing the planet – hunger, drought, degraded farmland and grasslands, damaged waterways, and much more. Those books focus on (mostly) one thing: Soil.  In 2016, we’ve published two more important books that […] Read More

Climate Change & the End of Stationarity

Just as predicting the rise of Donald Trump as a leading presidential candidate stumped even the best of political analysts (looking at you Nate “FiveThirtyEight” Silver), the advent of the Sixth Great Extinction due to climate change and an increasingly potent mix of carbon dioxide in the atmosphere has completely upended how we predict the […] Read More

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How is it that emissions keep growing despite rising concern about the climate change they cause? It is possible to identify several reasons for the paradox, most of which lie outside the scope of The Climate Change Playbook. But one important reason is relevant here: people do not understand the behaviors of the climate system.And […] Read More
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