To save the economy or save the planet? Aye, that is the question. George Monbiot in The Guardian, July 1, suggests the public will opt for saving the economy rather than tolerate even higher taxes to mitigate any environmental damage. But the approach assumes there is a cheap alternative to the green economy.
New Scientist recently reported in a survey of oil industry experts that most of them believe global supplies will peak by 2010. The U.S. Department of Energy argued in 2005 that unless the world begins a crash program of replacements 10 or 20 years before oil peaks a “crisis unlike any yet faced by modern industrial society” is unavoidable. To go on, Monbiot states that “if the world is sliding into recession, it is partly because governments believed that they could choose between economy and ecology. The price is so high and it hurts so much because there has been no serious effort to reduce our (oil) dependency.”
Gordon Brown is trying to have it both ways much like our president. Prime Minister Brown said he “wanted to facilitate a reduction in short-term global oil prices” while seeking “to reduce progressively our dependence.” The U.S. version of this gamesmanship pushes for a gas tax holiday and urges drilling off shore as if that is an essential step in getting us off our addiction to oil.
Cap and trade
Further on in his piece Monbiot has a go at explaining the economic and ecological benefits of a cap and trade system. His point is that revenue is created in such a system that can be used to mitigate the high cost of moving from one type of fuel to a host of energy-producing modes. A much fuller definition of the cap and trade system is found in Wikipedia: “A central authority sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and an equivalent amount of credits which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emissions must buy credits from those who pollute less than their allowance. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society.” Pollution limits would be reduced every year, theoretically.
Critics of emissions trading point to problems of complexity, monitoring, enforcement, and sometimes dispute the initial allocation methods and cap.
The Wall Street Journal (July 23, 2008) describes one of the skewed results of a complex system. A French chemical maker in South Korea is reaping a potential billion-dollar windfall under a United Nations program intended to spur climate friendly investment in the developing world. The actual details are too involved for this column but it involves South Korea in this windfall which was, at the time of the Kyoto Protocol, considered a “developing country” instead of the “highly developed country” that it now is. Incidentally, the U.S. is not a party to the Kyoto Protocol.
In the U.S. Congress the cap and trade discussion has just begun as the result of the Lieberman-Warner bill. The lineup of proponents and opponents was nothing if not predictable. Energy companies, automakers, manufacturers and squadrons of lawyers are determined to shape the legislation to their liking. On the other side are people like U.S. Rep. Joe Burton, Republican from Texas, who still has doubts about global warming for starters. The discussion started in The Guardian between the economy and environment is at full-throttle in a piece by Barton, chairman of the Committee on Energy & Commerce. He says U.S. prosperity would be at risk and that “we want to keep the lights on; we don”™t want to bankrupt working people; we want them to drive what they want to drive and go where they need to go; and above all we want them to keep their jobs.” In other words, no pain must be administered to the public.
Green taxes
Meanwhile, there is another option. A tax on carbon, while also a revenue-producing system, may be easier to administer and less amenable to manipulation. Charles Komanoff, of the Carbon Tax Center, raises these reasons for supporting the carbon tax as opposed to the cap and trade system, which he says is stunningly complex as opposed to the relatively simple and transparent carbon tax. A plan that gives a company the ability to buy the right to pollute is by its nature a difficult concept for the general public to swallow, however much money it might generate. The example of the French firm in South Korea, Rhodia SA, hardly helps.
Back to the climate perspective from the U.K. An article by Julian Glover, that followed the Monbiot discussion in The Guardian, appeared to give a more positive view of the public”™s ability to make hard choices when it comes to saving the planet, that is, until you get down to the details. Though a Guardian/ICM poll suggested solid support for taking action against climate change rather than tackling the global downturn, more nuanced questions revealed a more split opinion. Whereas there appears to be solid support for green taxes (what we call a carbon tax) that support dwindles at the thought that it could be instituted now in the face of growing economic stress. Attitudes are more likely to be shaped by how much money people have and how much they might have to pay. What a surprise!
Finally, from Monbiot: “Do we want to save it (the planet), even if we can? It is hard to see how the current global growth rate of 3.7 percent a year (which means the global economy doubles every 19 years) could be sustained, even if the whole thing were powered by the wind and the sun. For now we have to find a means of saving us from ourselves.”
Surviving the Future explores a wide range of subjects to assist businesses in adapting to a new energy age. Maureen Morgan, a transit advocate, is on the board of Federated Conservationists of Westchester. Reach her at mmmorgan10@optonline.net.
