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Climate fairness, pitch perfect.

by Eric de Place

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: cap carbon, auction the permits, and rebate all the revenue on a per capita basis. The bottom three income quintiles come out ahead; the fourth quintile stays roughly constant; and the wealthiest income quintile takes a small hit. Problem solved.


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The link to the archive seems broken.

gives me a 404.

And a search for "Cap and Dividend" (part of the title of the link) only shows this article.

I'd like to see the data that support the proposed solution, because it sounds interesting.

Posted by: Ian on 16 Apr 08

There's a video featured prominently in Digg featuring a member of the Heritage Foundation calling Cap and Trade a "Yankee tax" so I think the frame being described here is already well established.

Back in my home country of Canada there's a lot of opposition to the notion of AGW on the grounds it's a liberal conspiracy attempting to rob them of the rich bounty that the tar sands provides. The fact that Global Warming isn't an imminent threat to Canada (which has an abundance of fresh water and a vast frozen north) helps underscore this.

The frame is well established. As usual we're late to the party and, to use an English football phrase, on the back foot.

Given how

Posted by: Jose on 17 Apr 08



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