Thank you for bringing this report to my attention. I'm going to share it widely. Re. "making a new model," I'm increasingly convinced that the heaviest hitting immediate policy move we could globally make is a carbon currency (or better "reduce material footprint currency" - bad name) that pays everyone from smallholders in the Global South to mega corporations to reduce emissions/material footprint or keep it low (in the case of smallholder, the homeless, etc.). No "trading." Just absolute reduction of footprint, including restoring ecosystems, etc. Note: at least at the start, this pay would have to be greater than losses in conventional profits. Perhaps down the road, we could catch up with actual legislation like wealth caps; we should keep trying. But for now, incentivize saving our biosphere. (This could tank production so much that we might need to re-incentivize or make exceptions for necessary production, like food, infrastructure), but the principle's not that hard. We're running down a suicidal track now because we pay people to run down it. We need to pay us all to run the other way.
By the way, I can't find any actual commentary on this or similar ideas; the closest is Kim Stanley Robinson's carbon quantitative easing. If anyone knows where conversations like this are happening, please let me know.
We have such a thing in Canada. There is a fee on fossil fuel use that is proportionate to the carbon it releases. 90% of that fee is returned to citizens as a flat payment, designed such that some 80% of recipients see a net advantage. The less fossil fuel your consume, the bigger the relative gain.
The other 10% is distributed to municipalities, schools, hospitals, universities, and other not-for-profit entities that use fuel but don't qualify as an "individual" for the rebate. So, 100% of the "tax" is distributed. None of it goes into government discretionary spending.
Unfortunately, the Conservative Party has successfully branded that rebate as a "Carbon Tax", shouting "AXE THE TAX!" to anyone who will listen.
Even more unfortunately, other politicians are listening to them even more than their constituents, and everyone is running away from the "carbon tax" as though it were toxic, rather taking the time to properly explain why everyone but the top 20% of drivers should love this rebate program.
I'm in despair over this, and I'm angry that the Liberal Party has not vigorously defended it, and pilloried those who lied about it. (You can't spell "Poilievre" without "lie"!)
I only drive about 2,000km a year. This carbon rebate is a clear benefit to me!
Thanks for sharing this context from Canada. You're certainly way ahead of us in the US. Your "axe the tax" point illustrates why, in the short term, we can't rely on a fee-and-dividend approach - we can/should implement it, but it will be a tiny part of the solution.
In the short, emergency term (ex. next 10 years), we need to pay EVERYONE to act to save our ability to live on the Earth, including the 1%. Conservatives fight these measures because they support the rich; if the rich get the same/more wealth, they won't fight it: they'll rally behind it. It's not just, and it's not a long-term solution, but I think, short term, it's the best we can do. Ex. If an oil company's projected profit is X, pay them X + 1 to leave it in the ground (except where vital to build the transition) and pivot sharply toward building a sustainable transport infrastructure: electric trains, buses, small EVs, bike lanes, etc.
We can't raise those funds by tax revenue/fees. We need to create a new currency by fiat. Inflation could be a problem; we might need to implement price controls, like in WWII, but our current situation--in terms of raw loss of life and "permanent" damage to the Earth--is far more grave than WWII, so let's do what we have to. It should definitely include paying the poor (low footprint), too, for the very fact that their existence is not the problem. (This is just a layperson's view, of course. I'd love to hear more discussion.)
I don't think "paying off the energy producers" can work.
Fiat currency has no physical basis.
Since "money" as we know it is simply a promise of future energy, you can't really pay people to produce less energy. At least, not for very long.
The inevitable result of "creating money" to pay for reduced energy production would be "stagflation", or price inflation without corresponding wage growth.
This is where we now sit, as per-capita energy production peaked in 2017, and has been slowly going downhill since.
Clampdown
Speaking of actuaries, I highly recommend Gail Tverberg's blog, https://OurFiniteWorld.com.
Her blog is about inevitable limits, and what happens when we crash into them, rather than at least pretend like we're paying attention.
Gail is no hair-shirt back-to-the-lander. She's an actuary, who spent a career managing risk.
Thank you for bringing this report to my attention. I'm going to share it widely. Re. "making a new model," I'm increasingly convinced that the heaviest hitting immediate policy move we could globally make is a carbon currency (or better "reduce material footprint currency" - bad name) that pays everyone from smallholders in the Global South to mega corporations to reduce emissions/material footprint or keep it low (in the case of smallholder, the homeless, etc.). No "trading." Just absolute reduction of footprint, including restoring ecosystems, etc. Note: at least at the start, this pay would have to be greater than losses in conventional profits. Perhaps down the road, we could catch up with actual legislation like wealth caps; we should keep trying. But for now, incentivize saving our biosphere. (This could tank production so much that we might need to re-incentivize or make exceptions for necessary production, like food, infrastructure), but the principle's not that hard. We're running down a suicidal track now because we pay people to run down it. We need to pay us all to run the other way.
By the way, I can't find any actual commentary on this or similar ideas; the closest is Kim Stanley Robinson's carbon quantitative easing. If anyone knows where conversations like this are happening, please let me know.
We have such a thing in Canada. There is a fee on fossil fuel use that is proportionate to the carbon it releases. 90% of that fee is returned to citizens as a flat payment, designed such that some 80% of recipients see a net advantage. The less fossil fuel your consume, the bigger the relative gain.
The other 10% is distributed to municipalities, schools, hospitals, universities, and other not-for-profit entities that use fuel but don't qualify as an "individual" for the rebate. So, 100% of the "tax" is distributed. None of it goes into government discretionary spending.
Unfortunately, the Conservative Party has successfully branded that rebate as a "Carbon Tax", shouting "AXE THE TAX!" to anyone who will listen.
Even more unfortunately, other politicians are listening to them even more than their constituents, and everyone is running away from the "carbon tax" as though it were toxic, rather taking the time to properly explain why everyone but the top 20% of drivers should love this rebate program.
I'm in despair over this, and I'm angry that the Liberal Party has not vigorously defended it, and pilloried those who lied about it. (You can't spell "Poilievre" without "lie"!)
I only drive about 2,000km a year. This carbon rebate is a clear benefit to me!
Thanks for sharing this context from Canada. You're certainly way ahead of us in the US. Your "axe the tax" point illustrates why, in the short term, we can't rely on a fee-and-dividend approach - we can/should implement it, but it will be a tiny part of the solution.
In the short, emergency term (ex. next 10 years), we need to pay EVERYONE to act to save our ability to live on the Earth, including the 1%. Conservatives fight these measures because they support the rich; if the rich get the same/more wealth, they won't fight it: they'll rally behind it. It's not just, and it's not a long-term solution, but I think, short term, it's the best we can do. Ex. If an oil company's projected profit is X, pay them X + 1 to leave it in the ground (except where vital to build the transition) and pivot sharply toward building a sustainable transport infrastructure: electric trains, buses, small EVs, bike lanes, etc.
We can't raise those funds by tax revenue/fees. We need to create a new currency by fiat. Inflation could be a problem; we might need to implement price controls, like in WWII, but our current situation--in terms of raw loss of life and "permanent" damage to the Earth--is far more grave than WWII, so let's do what we have to. It should definitely include paying the poor (low footprint), too, for the very fact that their existence is not the problem. (This is just a layperson's view, of course. I'd love to hear more discussion.)
I don't think "paying off the energy producers" can work.
Fiat currency has no physical basis.
Since "money" as we know it is simply a promise of future energy, you can't really pay people to produce less energy. At least, not for very long.
The inevitable result of "creating money" to pay for reduced energy production would be "stagflation", or price inflation without corresponding wage growth.
This is where we now sit, as per-capita energy production peaked in 2017, and has been slowly going downhill since.
That reduction in energy in about to accelerate. (https://blog.gorozen.com/blog/the-depletion-paradox)
What we refuse to manage, nature will manage for us, probably in a way we don't like.
Pessimism isn't pessimism when it acknowledges reality.
What song from The Clash?