Ireland’s Vulnerability to the Rising Price of Carbon

In 2020, for the first time ever, Ireland’s dismal failure to control its climate-changing emissions will result in direct financial consequences for the state and for its taxpayers. We will overshoot our binding EU emissions target and will have to cover our excess emissions by buying carbon credits from other countries at an annual cost estimated at €455 million. This looming prospect of financial accountability has powerfully focused minds among Irish decision makers, as it was intended to do. Slowly but surely the country is waking up to one central and salient fact with deep implications for national finances, trade, the economy, and for the lives and livelihoods of many Irish people: carbon has a price, and that price is only going up.

Average global temperatures are increasing, ice sheets and glaciers are melting, the seas are rising and we are experiencing more of what have come to be called “significant weather events”. Climate scientists agree that the cause of these changes is carbon dioxide and its greenhouse gas equivalents (conflated here as ‘carbon’), and economists agree that the most effective and efficient way to reduce carbon is to make it more expensive, thus “internalising” the considerable costs of climate change into the actual price of the products and behaviours that cause it. There are many alternatives to carbon and more are being developed and brought to market every day. A price on carbon makes each one of these alternatives cheaper relative to their fossil fuel competition, biasing the entire market away from carbon and towards renewables and sustainability. It’s a fundamental part of any realistic solution to climate change.

Ireland currently prices carbon in two ways: by participation in the EU’s Emission Trading System (ETS) in which emission permits are bought and sold, and by directly taxing carbon not covered by the ETS at a flat rate of €20/ton. Growing scientific, economic and political pressures mean that both of these carbon prices will rise dramatically over the coming decade.

There is widespread recognition that the EU’s ETS carbon price is far too low and uncertain to meaningfully influence purchasing and investment decisions. As a market signal the current ETS trading price of €20/ton is essentially background noise against the fluctuating prices of oil and other fossil fuels, and far below the €40-€80/ton required to meet Paris Agreement commitments. In response to this failure the EU will reduce the number of emission permits available to the ETS from 2021, with the goal of increasing the market price of ETS carbon. The ETS is also scheduled for a full review and reform by 2028 and there is growing movement to put a minimum “floor price” on carbon, essentially going around the ETS market to directly tax carbon instead (the UK already has such a floor price, currently £18/ton). The point is that whatever way the ETS carbon market is reformed or circumvented in the coming decade, it’s clear that the price is only going one way.

Carbon pricing around world from the World Bank’s Carbon Pricing Dashboard.

Ireland’s existing direct carbon tax of €20/ton can also only rise. Ireland has the third highest per-capita emissions in the EU (after Luxembourg and Estonia) and is far behind most other member states in decarbonising its economy. Finland currently taxes non-ETS carbon at €62/ton, Norway at €52/ton and France at €45/ton, with plans to increase this to €84/ton by 2022. Professor John Fitzgerald, chairman of the Climate Change Advisory Council, has estimated that Irish carbon tax would have to be as high as €70/ton to be in line with our 2020 emissions target. Meanwhile Sweden, which currently taxes carbon at €120/ton, is moving beyond EU targets (source: World Bank’s Carbon Pricing Dashboard)

Not all EU states directly tax carbon, but most of them are better positioned than Ireland on emissions. If we are to have even the slightest chance of reducing our emissions to within acceptable EU levels, dramatic increases in carbon taxation will be necessary.

In two years the Irish taxpayer will begin to pay an annual carbon bill to others, outside of the country, who are better at reducing and eliminating carbon. This recurring bill will be our fiscal and legal responsibility under EU “burden sharing” in response to increasingly alarming climate change. The expected €455 million due in 2020 is only the beginning of an ongoing and growing liability.

The EPA estimates that on our current path Ireland’s annual emissions will be around 50 million tons beyond our agreed target by 2030 . At €100/ton – a very realistic carbon price for 2030 – that overshoot would cost us €5 billion, or about half of the current cost of servicing the entire national debt. Considering the quickening urgency surrounding climate change, the very real possibility that emissions targets may tighten further, and the growing upwards pressures on carbon prices, the actual cost of our excess emissions could easily be much higher.

There are other threats too. Significantly higher EU carbon prices would require “border adjustments” in order to maintain competitiveness against jurisdictions with lower carbon taxes. These ‘adjustments’, essentially tariffs on imported goods containing carbon, would likely be returned in kind, with significant effects for agricultural and other emission-intensive Irish exports. Tourism, a significant employer and foreign exchange earner, is also likely to be hit hard by higher travel costs. Throughout the country businesses and lifestyles will be seriously disrupted.

Ireland is starting from a bad place. Our late industrial development, our high agricultural emissions, decades of planning and building with little regard for carbon, the way EU emissions targets are calculated, our growing population and our late start on taking the environment seriously – all are standing against us now. But carbon dioxide, climate change, and the rising price of carbon are not going to go away because of our unique circumstances. This is a war on carbon and like it or not, Ireland is part of that war.

We will pay much more for carbon in the decade ahead – that much is certain. Ireland’s essential choice now is what will happen to that money. If we continue on our current path our taxes will flow outside the country to those who are better than we are at eliminating carbon from their lives, businesses and economies than we are. One way or another we will be paying a much higher price for the carbon we use in the years ahead. If we want to keep that money in Ireland, then the time to start paying that price is now.

Graham Caswell is the coordinator of Citizens’ Climate Lobby Ireland, an advocacy group campaigning on carbon pricing.

Submission to the Talanoa Dialogue

This was my submission to the UNFCCC’s Talanoa Dialogue on climate change. Although the consultation process was advertised as being open to “all interested stakeholders”, my contribution was rejected because I was not attached to a “a non-Party stakeholder to the Convention” (i.e. an organisation).

Table of Contents

  1. Where are we?

1.1 A permanent global catastrophe is approaching.

1.2 The window for effective action is closing.

1.3 The demand for carbon must collapse.

1.4 A price on carbon is central to any solution.

1.4.1 Tax and Subsidize doesn’t work.

1.4.2 Trading Systems don’t work.

1.5 The core challenge in pricing carbon is political.

  1. Where do we want to go?

2.1 Voters must gain.

2.2 Low and middle income earners must be protected.

2.3 The free market must be protected.

2.4 Cross-spectrum political support is necessary.

2.5 An international adjustment mechanism is necessary

2.6 Values, morality, justice and fairness must be central to any carbon pricing.

3. How do we get there?

3.1 Carbon fee and dividend.

3.2 Building political will.


1. Where are we?

1.1 A permanent global catastrophe is approaching.

A nightmare is coming. Climate change is much, much more than just global warming of a few degrees. It is the arctic melting, the permafrost thawing, the coral dying, the extinction of many species and the dramatic loss of biodiversity. It is the sea level rising, storm surges and accelerating coastal erosion. Climate change is hurricanes, typhoons, wildfires and flooding, and also desertification, the death of forests and the failure of the rains. Climate change is unpredictability. It is chaos.

For human beings, climate change is drought, crop failure and famine. It is the vast inundation of the great coastal cities. Climate change is hundreds of millions of refugees fleeing drought, flooding, famine and collapse. It is destabilized societies, ruined economies and infectious pandemics. Climate change is hatred, conflict and war on a vast scale. It is human misery, pain, fear and horror. Climate change is a return to the darkness from which we have so recently emerged.

1.2 The window for effective action is closing.

We do not know the details of this nightmare or how fast it will arrive. Ice core data shows that dramatic shifts in temperature are possible within a matter of years. If the antarctic ice sheets collapse we could see many meters of sea level rise within a few decades. The methane of the permafrost might be a tipping point, or perhaps the release of ocean methane clathrate, or a dieback of the Amazon or of the great boreal forests, or something else that we don’t yet know about. We do not know if a tipping point will occur at 2°C, or 2.2°C or 1.8°C or something else. We don’t know the specific details of the coming nightmare or how fast it will arrive. But if we do know that if we do not change then, sooner or later, it will happen. Catastrophe is the default option.

Climate change is caused mostly by our emissions of carbon dioxide, formed when we burn carbon for energy. The Paris Agreement is the commitment of the nations of the world to reduce these emissions, but it is weak and it is not enough. Even if every single country meets their Paris Agreement commitments we would still be emitting enough carbon to cause permanent and catastrophic damage. We have already burned enough carbon and emitted enough CO2 to raise the temperature of the world by 1°C. In order to keep it under 1.5°C or 2°C we need our CO2 emissions and thus our use of carbon to essentially collapse within the next few decades. Make no mistake – it may already be too late. But if we are to have a chance, then this is it.

If we are to avoid the collapse of our modern, technological, organised human society then our CO2 emissions and our use of carbon must collapse. We cannot have both. This is a fact. For humanity to have any chance of a prosperous, progressive, positive future, our use of carbon must collapse.

1.3 The demand for carbon must collapse.

Imagine what would have to happen for humanity’s use of carbon to collapse within the next few decades: Our entire energy supply would have to change. Many of our manufacturing processes would have to change. Many of our modern agricultural practices would have to change. Finance and investment and the way we do business would have to change. The work that many of us do to earn a living would have to change. We would have to change the way we heat and light our homes, the way we travel, cook, shop and socialise. Our lives and behaviour would have to change.

And it would have to change soon. If we are to have a chance of avoiding the terrible consequences of 2°C or 3°C temperature increases then these change would have to begin almost immediately, and this beginning would have to be strong and noticeable and dramatic. The reduction in the use of carbon would have to deepen, and deepen, and deepen again. Every person on this planet would have to know, without doubt, that carbon was ending – and make their choices accordingly.

There is no organisation or government or group of governments that could micro-manage the behaviour and choices of so many people so quickly without catastrophic economic effects. Laws can be passed but are useless if ignored or destructive if they lead to political instability or economic collapse. It is not possible for any group of human minds to reorganise the entire economy of the human species within a few decades – that is just not realistic. There is much for governments to do, but the heavy lifting of mass societal and economic change is beyond their capabilities.

There is only one mechanism that has even the potential to flexibly and efficiently offer the innovation, mass communication, distribution, organisation and other factors necessary for humanity’s use of carbon to collapse within the next few decades. If we are to have a chance of doing what must be done for our modern organised societies to survive, then we must make the power, creativity and efficiency of the market work to this end. That means a price on carbon.

1.4 A price on carbon is central to any solution.

Climate change has many terrible financial and human costs, today and in the future. But when you buy an airline ticket or fill your car’s fuel tank or pay your electricity bill, you do not pay these costs. In economic terms, the costs of climate change are not internalised into the price of carbon. There is no price signal, and so as far as the market is concerned, climate change does not exist. If we had to pay for the consequences of your carbon choices then we would probably make different choices, but we don’t. Essentially the market cannot see climate change. To the powerful market forces that shape the world around us and how we see it, climate change is invisible.

In order to make climate change visible to the market – and thus to every person making every spending decision – we need to internalise the costs of climate change into the price of carbon. In other words, we need to put a price on carbon so that we are financially aware that it is not free and that its use has consequences. This means that the price of things that include carbon (electricity, heating, fuel, food, etc.) must increase, making them much less competitive relative to competing non-carbon products, services, options and behaviours. In order for the demand for carbon to collapse, the price of carbon-related consumption must dramatically increase.

1.4.1 Tax and Subsidise doesn’t work.

One way to increase the price of carbon and thus discourage its use is simply to tax it, and to spend the revenues raised from that tax on subsidising non-carbon alternatives. This is command-and-control, in which government or regulatory authorities decides what to tax and what to subsidise, thus altering and influencing the market away from carbon. One problem, of course, is that civil servants may not be the best people to decide what technology, products, services, processes and people to subsidise – especially since they are not spending their own money. There is also a substantial administrative cost, including an army of means-testers deciding who is and is not deserving of financial assistance. And there is the fact that everybody’s life and situation is different, and so the costs and benefits as imagined by government may be substantially different on the ground in the lives of real people. Perverse and expensive incentives may be created. Carbon tax and renewable subsidies dramatically concentrates financial power and thus power over the lives of others. Mistakes can be made. There is wide opportunity for abuse.

However the core problem with the tax and subsidise model of pricing carbon is a moral one. When carbon is taxed, everybody’s prices go up equally. This means that the prices that must be paid by the poor and the middle rise more relative to income than for the rich. A carbon price that is a barely noticed inconvenience for the rich can create misery for the poor. Similarly, because rich people tend to use much more energy than poor people, subsidising energy is essentially a subsidy for the rich. A good example of this injustice can be seen in present carbon pricing in my own country, Ireland, where fuel for heating and transportation is taxed at €20 per ton. Ireland also offers a subsidy of up to €5,000 to encourage people to switch to electric cars. In practice this means that poor people struggling to stay warm are taxed so that the expensive new cars of rich people can be subsidised.

Leaving aside the centralisation of power, the high administrative cost and the potential for abuse, the tax and subsidise model of pricing carbon ultimately means that the necessities of the poor are taxed to subsidise the luxuries of the rich. This is not only deeply unfair, immoral and unjust, but it is politically impossible at the scale necessary. It might work at €20 per ton, but it won’t work at €50 per ton, or €100 per ton or more. Electorates will not accept it.

1.4.2 Cap and Trade doesn’t work.

Another way to increase the price of carbon and thus discourage its use is emissions trading, also known as cap and trade. In this model the government issues, sells or auctions pollution permits to big polluters, gradually reducing the number of permits available. These permits can be bought and sold, giving big polluters flexibility and incentivising them to reduce their pollution. Emissions trading can also involve offsets, i.e. carbon credits for activities (like planting trees) that take carbon out of the atmosphere. This system is implemented in several jurisdictions around the world, notably in the EU.

Cap and trade was extremely successful in reducing the CFCs behind ozone depletion and the nitrogen oxides (NOx) and sulfur dioxide (SO2) behind acid rain, but it has been far less successful in reducing CO2 emissions. The reason is that CFCs, NOx and SO2 were relatively minor pollutants used in relatively few industrial processes and relatively insignificant in terms of their importance to our modern economy, society and life. Carbon, on the other hand, is energy itself and is embedded in almost every aspect of our modern world. Put another way, if CFCs, NOx and SO2 are comparable to products in a marketplace, carbon is comparable to money itself. The market rules of carbon are thus very different.

There are many practical problems with cap and trade. If polluters receive their pollution permits for free they may not cut their emissions (because if they do they will get fewer permits in the future). On the other hand, if pollution permits are sold or auctioned we have the moral and thus political problems encountered with the tax and subsidise model. Carbon cap and trade is highly complex and the carbon markets that result from it encourage speculation and thus price volatility. Some of the biggest polluters make the most money from this system, and many of the offsets are little more than hot air. Trading schemes such as the EU’s Emissions Trading Scheme (ETS) have been beset by perverse incentives, profiteering and even criminality.

Most importantly, however, is that carbon cap and trade does not work at the scale necessary to reduce our carbon emissions enough to avoid catastrophe. As I write this, carbon pollution permits are trading within the ETS at just over €14 per ton. This is nowhere near sufficient to alter behaviour to the extent necessary. Pope Francis had this to say about cap and trade emissions trading: “This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.” Essentially he is saying that it is an attempt to hide inaction behind the veil of complexity.

1.5 The core challenge in pricing carbon is political.

If we are to avoid permanent and catastrophic climate change and untold human misery we must quickly and radically reduce our use of carbon, and thus we must dramatically increase the price of that carbon. €14 per ton or €20 per ton is nowhere near enough to effect the kind of deep changes that we need. We need €40 or €50 per ton just to start, rising regularly to €100 per ton and more. The price of everything containing carbon must skyrocket. Whatever way we do this (and we must do it), it is important to recognise that the most important challenge we face is political.

Nobody is going to vote to be poorer, no matter what the disaster facing the planet. Nobody is going to vote for themselves and their family to freeze in the dark. Nobody is going to vote for sacrifice and pain. This is not WW2 and climate change is far, far down the list of voter’s priorities. Nobody is going to vote to make their own lives worse and they are not going to be persuaded to make their own lives worse. It is not enough to be scientifically realistic when it comes to carbon and climate change. We must be politically realistic too.

2. Where do we want to go?

I believe that this is the wrong question, because it implies that we have a choice. However, if we want our modern world to survive and to thrive and if we want any chance of a prosperous and positive future, then we do not have a choice. We must dramatically reduce carbon. We simply have to. The question might therefore be better phrased: “Where do we have to go?” or even: “What do we have to do in order to survive”. I would suggest that there are a few things that are non-negotiable.

2.1 Voters must gain.

Existing carbon taxes, subsidies and trading schemes have attracted some political attention (particularly in Australia), but so far they have generally been beneath the radar of most electorates. A carbon price of €14 or €20 per ton is so low that it is lost in the background noise of fluctuations in the price of oil and other carbon resources. However, a carbon price high enough to change behaviour must, by definition, be high enough to be widely noticed, and that means it becomes political. It is politically unrealistic to expect electorates to vote to make their own lives worse, and in the absence of a vast environmental catastrophe it is unlikely that voters will be so persuaded. There will be winners and losers from any carbon tax, but if a policy is to be realistic then there must clearly and unambiguously be more winners than losers.

2.2 Low and middle income earners must be protected.

A price on carbon will increase a wide range of prices, including the price of essential necessities, putting pressure on low and middle income earners at a time when there is already substantial economic stress and insecurity and resulting political anger and instability. Median wages in many countries have remained static for decades while core costs – especially housing costs – have risen. There is a strong sense that financially secure elites are out of tough with the financial reality of daily life for most people, and many voters have abandoned centrist political parties in favour of populist extremes, resulting in political instability and uncertainty. In this context, therefore, any carbon tax which adds to the financial burden of most workers is not politically possible, and there are many powerful political parties and blocs that would fight such a policy at every turn. A political majority of people are low and middle income earners, and they must be protected.

2.3 The free market must be protected.

From the products and services we take for granted, to the incredible technological innovation so quickly and efficiently distributed, to the opportunity for billions to rise and escape abject poverty, the global free market has radically transformed our world in recent decades. While there have been both winners and losers in this transformation, and while the global expansion of the free market has caused both social and environmental damage, the aggregate human effects have been largely for the better. While there is substantial ideological and political opposition to the free market there is also a large and powerful constituency determined to protect it and the bounty (and profits) it has delivered. No command and control policy that substantially restricts market freedom is therefore politically possible. Our modern economy and society is built on the global free market, and it must be protected.

2.4 Cross-spectrum political support is necessary.

For any substantial price on carbon to be politically possible, therefore, both low and middle income earners and the free market must be protected from its effects. This essentially means that cross-spectrum political support would be necessary. This does not mean that such support need be universal across the parties and power blocs of both the Left and the Right. However any politically realistic price on carbon must satisfy the core ideological concerns of both sides of the political spectrum. If carbon is to be priced sufficiently to dramatically reduce its use in the time we have left, it cannot conflict with core ideological values and belief.

2.5 An international adjustment mechanism is necessary

If one jurisdiction taxes carbon and another doesn’t, then the carbon-pricing jurisdiction will be at a cost disadvantage compared to its irresponsible neighbour. No state, province, nation or country should be disadvantaged for doing the right thing, nor should they be given advantage from doing the wrong thing. This means that whatever way a price is put on carbon, some form of border adjustment mechanism will be necessary. Any such adjustment mechanism would have to measure the flow of carbon across the border (including embedded carbon) and tax that carbon accordingly, but in a way that would not hurt exporters or damage trade. This means that its not enough simply to tax the carbon coming in to a jurisdiction (basically a carbon tariff). Exporters who pay carbon tax should not be disadvantaged over competitors who do not.

2.6 Values, morality, justice and fairness must be central to any carbon pricing.

In light of our scientific knowledge and awareness of climate change, the use of carbon is a moral issue. It is the rich people and the rich world who have caused the problem, both historically and today. And it is largely the poor people and the poor world who bear most of the consequences, both today and in the future. The actions of we who are alive today will dramatically affect the lives of those who will come after us. Knowing what we now know, carbon use is a deeply moral issue.

But the solution to carbon use is also a moral issue. It is not acceptable that the necessities of low and middle income earners be taxed so that the luxuries of the rich may be subsidised. It is not acceptable that those who do the right thing are harmed and disadvantaged, while those who do the wrong thing are rewarded. It is not acceptable that the market freedoms that have so radically transformed our world for the better be replaced by the command and control of government. It is not acceptable that opaque complexity be used by insiders and speculators to profit from others without providing real value.

Climate change is a clear and present danger. This is an emergency and we are in the midst of a deep and possibly existential crisis. We will not survive as a society unless we pull together and act together. In order for this to happen values, morality, justice and fairness must be central to any carbon pricing.

3. How do we get there?

A nightmare is coming. The seas are rising, the arctic is melting, the permafrost is thawing, the coral is dying and extreme weather events of all kinds are occurring more frequently. Drought, crop failure, coastal flooding and dramatic storms are with us already while the Syrian conflict and resulting refugees are merely the briefest glimpse of an unimaginably dark future that will happen unless we change dramatically.

Carbon is so embedded into our society, our economic system and our way of life that it is impossible for any government to extract it using command and control measures. The market must be used and thus we must put a substantial prce on carbon. Carbon tax and subsidy isn’t fair and carbon cap and trade doesn’t work. Neither are politically possible or realistic at the substantially higher carbon prices that are urgently needed. We need another way to put a serious, substantial, behaviour-changing price on carbon. For any such carbon pricing mechanism to succeed it must find favour with a clear majority of voters. It must protect both the poor and middle, while at the same time keeping the market free. It must attract cross-spectrum political support and include a border adjustment mechanism. And above all it must be based on values, morality, justice and fairness.

Fortunately such a policy does exist and is rapidly gaining popularity, particularly in the United States. This is the policy of making the revenue from carbon tax neutral, by distributing it equally to everybody. It is known as carbon fee (or tax) and carbon dividend.

3.1 Carbon fee and dividend.

Unlike cap and trade, the policy of carbon fee and dividend is simple: carbon is taxed as it comes out of the ground or enters the port, and the revenues from that tax are shared equally with all. Imports from countries that don’t tax carbon are taxed according to their carbon content while exports attract a rebate. That’s it.

Under a fee and dividend carbon pricing system everybody’s prices would go up, and everybody would also get a cheque in the post or a regular deposit in their bank account. For most people (about two thirds) the cheque would be more than the higher prices, making this policy a politically possible way to dramatically price carbon. Essentially redistribution would be from heavier users/polluters to lighter users/polluters, making this policy undeniably fair. And this would happen across the market, to all industries, all firms, all competitors with no favour, making this policy market friendly. Since all of the revenue would be redistributed to everybody, it would not centralise financial power or increase the size of government. And there is already demonstrated and substantial cross-ideological, cross-party and bi-partisan political support (amazingly enough, both Exxon and the US Green Party support this policy, as do both the Democrat state legislature of California and the pre-Tea Party GOP establishment). And a border mechanism ensures no nation, state or tax jurisdiction is disadvantaged for doing the right thing. Carbon fee and dividend fills all of the requirements for a politically possible price on carbon.

Most importantly, though is that carbon fee and dividend – or tax and dividend if you prefer – is scalable. Other methods of pricing carbon are limited by political impossibility. But with most people gaining under fee and dividend, popular support would be assured. Saving money and saving carbon would become aligned and the same thing. Those who do the right thing and make the right choices are rewarded, while those who do the opposite pay for that reward.

One way to see fee and dividend is as a form of financial carbon karma, aligning with and centering around basic, core human values and concepts of morality, justice and fairness.

3.2 Building political will.

The Talanoa question we are answering here is: How do we get there? Part of that question has been answered in the proposal for the carbon fee and dividend pricing policy outlined above. But it is not enough to simply propose a policy. In order for any policy to have any meaningful effect it must be implemented, and that requires political action. In other words, the answer to the question “How do we get there?” is that we get there not only through policy but through politics.

We all want a bright, hopeful and positive view of the future. We want the world to be safe for our children and our grandchildren and those who come after them. We want to think of ourselves as good people, doing the right thing to make things better for everybody. Individually and even organisationally, we want this world and this future. But our individual and organisational will is not enough. We must become political, and translate what we want into terms that our complex systems of governance can understand. We must persuade, leverage and influence political will.

Each of us needs to take a stand, and specifically decide what it is we are for. We cannot research and study forever as the world burns. We cannot wait any longer to make up our minds. We must decide. We must choose what we are for, and loudly, clearly and unequivocally speak out in favour of our choice. If ever there was such a time, now is the time to make a stand.

If you are an individual, then speak. Work to influence who you can – especially politicians and media. Write letters, make phone calls, go to constituency clinics and encourage friends and family to do the same. Join and connect with others who want the same. If you lead or influence an organisation or a group, then work to endorse the specific policy you stand for, and seek other groups and organisations with which to collaborate with to influence politicians and media. If you work in media, close to politicians or if you otherwise have influence, then use that influence in the best way you can in favour of your chosen policy. And if you are a politician then do the same.

The hour is late and the time to act is now. Nothing is more important that averting the coming global and essentially permanent catastrophe, so whatever you can do, do it. Do it now.


It’s 2068. Three years ago the CO2 content of the atmosphere fell below 350ppm for the last time, even in the northern winter. Depending on who you listen to, temperatures may have stabilized over the last 20 years or so but it’s still too early to definitively tell (although the recent evidence of some Himalayan glacier growth is encouraging). Sea level rise may have slowed slightly (according to the Intergovernmental Panel on Science), but the sea defense industry won’t be short of business for the foreseeable future. Argument over the carbon-fixing price continues, with fewer and fewer people paying attention.

Use of nitrogen, phosphorous and many other elements and chemicals are a fraction of what they were in the early decades of the 21st Century. Non-renewable resource use is also a fraction of what it once was, and some reserves of rare, important and strategic finite resources are held in perpetuity, earmarked for the use of future generations. Nearly 45% of the planet’s surface is now under some form of legal protection, and regular progress is being made towards the global goal of 50% of the planet as full nature reserve. The human population of the planet is 9.7 billion, most of them in cities and almost all of them online.

The economy is circular. Plastic and other materials are standardized and easily and almost universally recycled. One operation’s waste is usually a resource for another operation, with resource/waste efficiency at the core of industrial design. There is flexible exchange and sharing of all sorts of goods, and refurbishment and reuse is the norm. Since both waste and resources are very expensive, people and businesses organize themselves accordingly. But even if it wasn’t expensive to be inefficient and dirty, nobody wants to be thought of as a “waster”. Nobody likes wasters.

It’s not just the economy that’s circular now – economics is circular too. Every schoolchild knows the Doughnut and understands the world ecologically. Later they learn about how fees are put on resources, pollution and public services and returned to everybody as the citizen’s dividend (of course, there are central bank dividends too, but that’s different). Everybody understands that it’s this redistribution from the heaviest users and polluters to the lightest users and polluters that keeps money flowing through the free market economy while keeping us within the ‘safe space’ between ecological limits and human necessities. The point is that everybody is a commoner now. Even the contrarians who rail against the Commoner Movement are, in fact, commoners if you look at their underlying assumptions. We’re all commoners now.

Some american historians like to trace the Commoner Movement to the 2020 US presidential election in which congressman Carlos Curbelo defeated Donald Trump in the GOP primaries. Although he went on to lose the election, Curbel’s pivotal Carbon Fee & Dividend policy was quickly adopted by the Sanders-Warren administration and then around the world. It was these first carbon dividend payments that grew into the ecotaxes and citizen’s dividend that we know today. Carbon still provides over 20% of the citizen’s dividend – higher than nitrogen and phosphorus combined.

Other historians see the roots of the Commoner Movement well before 2020 in campaigns for policies such as carbon tax and dividend, monetary financing, land value tax and, of course, a basic income (essentially the citizen’s dividend that we know today). Many of the core ideas of the Commoner Movement had been well articulated long ago by people such as Thomas Paine (18th C.), Henry George (19th C.) and Elinor Ostrom (20th C.). But it was after the rise of social media that campaigns for specific, actionable policies aimed at returning common value to society and to individuals began to proliferate. These campaigners were the crucial innovators and early adopters of the idea that shapes the world that we live in today.

In 2068 we take it for granted that all people are inherently equal and that every single person is entitled, as their birthright and inheritance, to a share of the returns on valuable and productive commonly owned assets. It seems obvious that the free market is only free if all participants have the power and security to say “no”, and that those who use the most and pollute the most and who cause the most damage should also pay the most. These things seem like common sense today, but they were considered radical ideas well into this century. Today it’s inconceivable that a free market could include environmental and social freeloading that damages and destroys the freedom of others, but that was once the norm. The market wasn’t always “Equal, Free and Fair”!

With carbon at $527 per ton, most people’s lives today are extremely carbon efficient – even rich people don’t want to be seen to waste carbon. The first carbon taxes were practically insignificant – background noise in the fluctuating price of oil. Even when they started to increase in the 20’s it was initially the effect on investment that was much more significant than the effect on behavior. It wasn’t until carbon reached nearly $100 per ton that people started abandoning it en masse, as the carbon boom of the late 20’s and early 30’s transformed the economy away from carbon.

Today solar heating, generation and cooling panels are widely available at essentially trivial cost, every house has a battery, and every tractor, train, car and delivery vehicle is electric. Many small towns exist completely separate from the industrial grid, even where old housing stock can’t be made fully passive and still needs electric heating. Nearly half the world’s food is now grown indoors or under glass, and every large town and city has it’s garden district. The average tomato is consumed less than 23km from where it’s grown – all year round even in the northern cities. Nitrogen is the only industrially-derived additive to most commercial growing media, and 96% of it is captured in the food cycle. Like any industrial process, most modern food production is essentially a closed system.

Home work, work hubs, flexible hours and general workforce independence means there’s a lot less daily travel now than there was in the past, and VP (virtual presence) means much less long distance conference and business travel. Most people travel a lot when they’re young but, since they can make a good living from almost anywhere, they also tend to end up close to home! Only 30% of the workforce work on a fixed contract for government, corporations or other large organizations and most people work independently. Figures show that approximately one in eight people of working age have no income other than the citizen’s dividend, and that another one in ten earn only a community wage. However in the real world it’s impossible to identify who makes what based on how they live. Most people on high salaries live lifestyles that would be considered modest a century ago, and money and material status just aren’t as important as they once were. It might still be legal to waste as much as you like as long as you pay for it, but what aware, responsible, mentally healthy person would act like that? Who would want to be a waster?

We live in a world in which personal AIs, gene therapy and deliberative democracy are taken for granted. At any one time over 300 people are living on Mars and it looks like the Titan mining station will be profitable within the next year or two. The Spiral Dynamics of Clare W. Graves has long replaced Abraham Maslow‘s Hierarchy of Needs as the accepted organizing structure of our individual motivation and growth, and our educational, media, professional and organizational perspective is based on the famous ‘trinity’ of Awareness, Empathy and Science. Most of us still face many deep and difficult personal challenges, it’s just that we just choose a lot more of them ourselves now.

Those who study the media and society of the early 21st Century tell us that there are three key differences in how people feel today compared to fifty years ago: (1) we have more time, (2) we feel safer, and (3) our future is much more hopeful. We are more relaxed today than we were in the past, and have more time to explore, cultivate and improve ourselves and the world around us. Although serious relative poverty still exists, almost nobody on the planet lives in fear of destitution any more. Everybody has the physical security and freedom from fear that makes equal participation in the market possible (and so much fun!). Everyone understands that markets can’t be free unless they’re fair, and that basic physical security is a perquisite for full market engagement and fair competition. It’s obvious now, but it wasn’t always that way.

Today we don’t just feel safer, more secure and more relaxed on a day-to-day basis than we did in the past – there are also deeper securities. Although the ruins of the unsustainable era are still all around us and the seas are still rising, the environmental trends are almost all positive. Most countries are at or close to the UN target of 5% of GNP for ecological remediation (although much of that is still spent on carbon fixing). Nature is returning in often spectacular ways and, while it will never be the same as it was before the technological revolution and the period of unsustainable expansion, there is much that remains. There is even hope that some coral reefs may come back once sea temperatures begin to fall.

It’s as if the time horizon within which we can realistically allow ourselves to think has opened up in front of us – expanding with the belief that our children and our grandchildren will also live rich, meaningful lives. The growing evidence of our own sustainability makes it psychology safe to think realistically about the far future, and so we make more and more decisions in the context of decades and even centuries, increasingly secure in the knowledge that what we do actually matters in the long term. It’s almost as if meaning has returned to the world.

We are no longer betraying the lives of our ancestors while destroying the lives of our children. We act responsibly and so, although we’re clearly far from perfect, we know that we’re good. And we’re getting better.

There is hope for the future.

Note: The idea of taxing carbon and distributing the proceeds of that tax equally to everybody as a ‘carbon dividend’ is well established and has extensive political and other support from across the political spectrum. It is the (Liberal) Canadian federal government’s ‘backstop’ policy: it is supported by Exxon, Shell, Unilever and many other giant corporations (see; it is supported by the (Democrat) California Legislature and by the US Green Party; it is supported by James Hansen and many (possibly most) senior climate scientists, and by a wide variety of climate activist organisations from both the Right and the Left and neither/both (notably the Citizens’ Climate Lobby – see Not least, carbon dividends are the defacto climate policy of the non-Trump, non-Tea Party GOP (see

I chose Curbelo for my imaginary story because he is the leader of the Climate Solutions Caucus of the US Congress, which now includes 88 congressional representatives (44 Democrats and 44 Republicans) – over 20% of the US Congress (see While the Climate Solutions Caucus doesn’t formally support carbon dividends, it was established by Citizens’ Climate Lobby with Curbelo and so is saturated by that policy. Curbelo is also young, upcoming, anti-Trump and supports sane, bipartisan policies not only on climate but on immigration and other issues. I have no idea what his political ambitions are, but he would be a natural presidential candidate for the scientific, rational, responsible and genuinely conservative remainder of the US Republicans, and a realistic potential challenger to Trump. Whether such a challenge would succeed is, of course, another issue.

In terms of the wider picture of what I have called the ‘Commoner Movement’ in my story – that is also happening already to a certain extent. As you have an interest in these matters I am sure you are familiar with the emerging policy movements on Land Value Tax, QE for People and a Basic Income, and with growing interest in the concept of ‘the Commons’. I have been immersed in these issues for five years now and engage almost daily with many of the key people involved, and I can assure you that there is plenty of evidence of overlap between them – in both the thinking (and actions) of the individuals involved, and in terms of the deeper philosophical and political-economic ideas. Three of these real, implementable policies (CD, LVT, and QE4P) are potential funding sources for the other (UBI) and this synergy is not completely unnoticed. Leading economic thinkers (Kate Raworth, Mariana Mazzucato, Francis Coppola, Steve Keen, Scott Santens, and many more) are already connecting these threads (at least in their private and social media conversations). Much of my time is spent encouraging these connections and trying to connect the silos of each individual policy movement under the organising concepts of the Commons and Raworth’s Doughnut.

[This piece was written in response to B. Lorraine Smith’s challenge for us to imagine the future we want.]

My Adventures in Economics

You know that stage every young child goes through when their response to anything said to them is ‘why?’ Well, I got stuck at that stage. From my earliest years I always wanted to know, always wanted to experience, always wanted to understand the reason. I have always been curious, adventurous, and irreverent of academic, cultural or other authority. I’ve always wanted to know for myself.

I spent a Tom Sawyer childhood leading teams of small boys on various adventures and projects involving rafts, treehouses, tunnels and mountains. My father called me an “instigator”. I read voraciously, travelled regularly from a young age, and conversed seriously and intensely into the night with many fine minds. Five year of economics, psychology and intellectual exploration at a Canadian university led to a year teaching in China and a ringside view of the popular student uprising that ended at Tiananmen Square. Back in Canada, four years as a university instructor of academic English followed, until one day I’d had enough and applied to almost every university English department in Africa, accepting a position as a lecturer at the University of Sierra Leone, West Africa.

In 1992, the year I moved from Canada to Sierra Leone, the United Nation’s annual UNDP Development Report placed Canada at the peak of human development, and Sierra Leone at the bottom. After decades of corrupt, incompetent kleptocracy, Sierra Leone was in ruins, was in the middle of a deteriorating civil war, and was governed by a small group of poorly-equipped army officers who had found themselves in power after an accidental coup. There was no electricity, little communication with the outside world, and the sounds of AK-47s and anti-aircraft guns regularly punctuated the dark, tropical nights. I threw myself into this new and exciting environment, engaging with my students, making good friends and exploring the country. In particular I spent my lengthy university holidays travelling in what was patronisingly called ‘the interior’, ‘upcountry’ or even ‘the bush’.

I soaked it all up – the ideas, the feelings, the spirit – until I became overwhelmed and experienced what could be described either as a breakdown or a spiritual awakening, depending on your point of view. Remember, while I existed in great privilege compared to those around me, I was exposed daily to some of the most heart-breaking human pain, waste and unfairness that the planet had to offer. My heart had opened to this suffering, so whatever my inner journey was, it was extremely emotional.

At the core of this emotional, mental, inner experience was an essentially philosophical conversion. In my efforts to understand I’ve always tried to be rational and to face and accept difficult truths that, while they may be unpleasant, are true nevertheless. I read philosophy, I read physics, I spent many days and nights in intense, testing and enlightening conversation, and I was what is known in this area as a ‘determinist’. I believed in the Big Bang, I believed in cause and effect, I believed in quantum indeterminacy. Conversely, at heart and deep down, I did not believe that we – and that I – had free will. Essentially I believed in fate.

But in Sierra Leone, surrounded by senseless suffering, I essentially had a damascene conversion. It might sound silly, especially considering that I’d always been a free spirit, but that was the first moment in my adult life that I genuinely and deeply believed myself and others to be free. I had been a cold, calculating and detached determinist until I saw the light of a belief in freedom. For the first time in my life I believed that free will existed. And I recognised that freedom came with responsibility, and that they were one and the same thing. Until Sierra Leone I had coasted through life, treating it essentially as an interesting experience. Now, for the first time, I became driven with a need to do something, and had acquired a purpose outside of myself.

The rebels got closer, I fled to my childhood home in Ireland, spent a year sorting myself out, and then threw myself into saving the world. I became intensely involved in my community, leading and contributing to an arts centre, youth groups, a save-the-beach campaign and more. Being rational, I knew that if our environmental challenges were not solved then nothing else would make much difference in the long run, and so I threw myself into Green politics, supporting parliamentary and MEP candidates, engaging in national discussion, and knocking on doors. It was the very early years of the internet, and I quickly saw it’s potential in dissolving informational bottlenecks and bringing people together, and so I learned how to use it and tried to spread that knowledge to the groups that I had joined. I set up email lists, online groups, websites and more for groups that had never used these tools before. I threw everything I had into the fight, across dozens of groups and organisations focused on many causes.

I knocked on doors, handed out leaflets, marched in demonstrations, crafted letters, attended meetings, participated in workshops, built campaigns, led groups, joined others, emailed, argued and discussed. I wrote press releases, told stories, built relationships with journalists, spoke on radio, and played with the dark arts of spinning perspective. I felt the nervousness of meeting senior government ministers in an attempt to persuade them of something or other. I felt the searing heat of burning armoured police carriers in the teargas saturated streets of Genoa during the last of what were called the ‘Anti-Globalisation’ protests. Until one day, standing in the rain outside the American embassy protesting the U.S. withdrawal from the Kyoto climate agreement, it began to dawn on me that, whatever it was I thought I was doing, it wasn’t working. I’d done it all and, from what I could see from the daily papers, it didn’t seem to be making a blind bit of difference.

This realisation was informed by my other life, in the corporate world of work and money. I’d been an early adopter of the internet and quickly understood that this was a vast revolution. I lived on the internet, at 26 bps. To learn more I studied, and then got a job on the phones, helping support the 20,000 customers of Ireland’s second largest internet service provider. That job led to other jobs – setting up a tech support department, quality control, network administrator. Until I cashed in my stock options and founded my own internet start-up.

My investors were the senior executives of a German-Austrian-Swiss consulting firm focusing on the pharma, nuclear and chemical industries. The key figures were former executives from Raytheon and Fluor. Their turnover was in the hundreds of millions, and they put about €300,000 into me. I burned through it during a frenetic two years with a team of eight, then watched my intended market evaporate as tens of thousands of mom-and-pop ISPs consolidated into a handful of big companies overnight. My startup had failed, and I bought back the shares I’d sold for €250,000 for only €1. It was better than any Harvard Business School education.

On weekends I would plot with passionate socialists, greens and anarchists, and then on Monday get my spreadsheets together for a meeting with rich and powerful men in fine suits who flew only business class. I drank with both, ate with both, got to know both, and had a foot in two worlds that rarely meet. On my corporate desk my penholder was a tear gas canister, picked up in the aftermath of a street battle. In a way I was embedded on both sides of the struggle, whatever that struggle was.

But one thing stood out. The market was powerful because it made things happen. The market was better organised than the protestors, more united, better equipped, more focused, and much more effective. Although my own market idea had failed, it was clear to me that the market could turn ideas into reality far more efficiently than the usual socialists, greens and anarchists marching up and down outside Dublin’s central bank for the nth time. Whatever its imperfections (and there were many), the market actually worked.

But, of course, it hadn’t worked for me – not this time. I had other internet ventures, other ideas, other projects, but my heart was elsewhere. In the ruins of my startup dream, and recognising the limitations of the campaigns to which I had devoted myself, I watched as the ice continued to melt, friends and neighbours continued to struggle, and one of the most spectacular housing bubbles in the history of the world continued to inflate. I became despairing, confused and burnt out. And so I ran away to sea.

During a maritime Greenpeace protest against plutonium being transported to a nuclear reprocessing plant in the UK I got a taste for the sea, and after that I wanted nothing else. I dropped commitment after commitment, did the minimum of paid work, and devoted my time and attention to learning the knowledge, getting the experience and adopting the attitudes necessary to make long sea voyages in small boats. A few years later I became a professional yacht delivery skipper, and spent many long nights under the stars thinking, feeling and finding myself again. Until, after a final year driving boats servicing offshore wind farms, I returned to land in the rubble of the 2008 banking crisis with a clear head, a confident heart, and a renewed commitment to changing the world for the better. I was determined not to fall into the scattergun approach of before. This time I was more focused, more targeted, much deeper, and more strategic than I was before.

Another year sorting myself out and exploring a few dead ends and I was focused on three core problems: (1) climate and the environment, (2) work and incomes, and (3) our system of banking and money. To be honest, this focus wasn’t difficult to find. After years in the trenches I was familiar of the nuances of environmental issues and politics. I was surrounded by friends and family struggling to match increasingly insecure incomes to absolutely necessary costs. And I was living in Ireland in the financial rubble of the 2008 debacle. Climate, incomes, debt. The environment, society, finance. Nature, ordinary people, and the Masters of the Universe. Three areas of our most significant dysfunction. I examined each of them through the eyes of economics.

Academia – the world of universities, journals, conferences and degree-granting authority – is somewhat frightening to many people, but it wasn’t for me. Remember, I’d spent a decade both studying and teaching at universities, deeply engaging all the while. I knew these people and, after six years teaching Academic English, I knew the language of academia better than most academics.

I also wasn’t intimidated by economics. I’d studied it formally at secondary school and university, and found it relatively easy. The concepts came naturally to me and I found it normal to think about the mass behaviour codified on charts and graphs. Although I drifted on into psychology (behavioural economics hadn’t been accepted yet), I maintained a strong interest, following economic and political affairs in the same compulsive and obsessive way that my friends followed sports. I was skilled in internet research and had all the data and ideas in the world at my fingertips. In these and many other ways, I felt that I had the tools for this inquiry. And this is what I found:


The economics of climate change is all about the price of carbon. The economic problem is that the real, actual costs of rising sea levels, droughts, floods and so on aren’t included in the real, actual price of the carbon you buy to heat your home, fuel your car, or turn on your lights. In economic-speak, the external costs of carbon are not internalised into its price, and so the market cannot even see those costs. As far as market forces are concerned, the environmental degradation of our planet may as well be happening on Neptune. Basically the problem is that the market can’t see climate change and all the other environmental damage.

The economics of incomes concerns the connection between work and incomes, and the changing nature of both work and incomes in the face of accelerating technology and globalisation. The core, unavoidable, costs of living are rising while incomes remain stagnant and increasingly insecure. Globalisation is a function of technology, and technology disrupts labour, and as technological development accelerates all around us the number of actual, feeling, voting human beings who are losing from these developments is outweighing the number of winners. Basically, machines and complex global supply chains are replacing us, so what are we going to do and how are we going to live? A lifetime of stressful drudgery at $11.35 an hour is not enough.

Finally, the economics of debt concerns money, and especially where it comes from – the money supply. This is the neglected, overlooked but vitally important realm of monetary policy, banking, and the structure of our financial system. Right now, in the system we have, almost all money is created from bank debt. Some of that debt is good debt, used for investment. But most of it is bad debt – debt for consumption and, worse, for speculation. Our monetary system doesn’t care where the debt comes from, as long as there’s debt. The events of 2008 were a very public illustration of the limits to this approach, yet this remains our system.

To me, crouched in front of my computer long into many nights, these three problems represented much of what was wrong with our world today. Each of these problems caused many other problems, and so I began to think of them as ‘meta-problems’ – overarching, systemic flaws from which many other individual human and environmental problems flowed. Climate. Incomes. Debt. Three core, fundamental, structural, systemic, deep, vast problems. Three economic problems. Three important problems. Three very specific problems. Amidst mounting and increasingly alarming evidence of the urgency of these three core problems I immediately began looking for solutions. And I quickly found them.


Before I tell you what I found, let me be first clear about what I was looking for. I knew why I was doing what I was doing (I just had to look around me). And I knew more or less what we had to do (put a real price on carbon, get more money to more people, and remove at least some control of the money supply from private bankers). The question I was trying to answer now was ‘how exactly are we going to do that?’ Many hours on Google presented the answer in the form of three policy ideas, each with campaigning activists, groups and organisations behind them.

The first idea is that of carbon tax and dividend. The problem is that we need a price on carbon, carbon is embedded in everything, and so putting a serious price on carbon raises the price of everything. How do you tax carbon without forcing poor people to freeze in the dark? Without collapsing the economy? The answer is, you give them back their money. Basically, you tax carbon and then share the proceeds of that tax with everyone equally. Everybody’s costs go up, but everybody also gets a cheque in the post, and for most people that cheque will be bigger than their increased costs. Carbon tax and dividend is an economic policy that directly addresses the core economic issue involved in internalising the cost of climate change into the price of carbon, making it visible to the infinitely innovative and powerful market. Most importantly, by taking from heavy polluters to give to light polluters, it is also inherently fair. The fact that most people gain from this arrangement makes it politically realistic as well.

The policy of carbon tax and dividend has been partly implemented in British Columbia, Canada, has been endorsed by the state legislature of California, and is the preferred policy of veteran climate scientist and activist James Hansen. It is formally supported by 56 members of the US House of Representatives (28 of them Republicans and 28 Democrat), and that number is growing rapidly. This is the climate and carbon policy of both the U.S. Green Party and of the US oil industry. The group that I support and of which I am a member is the Citizen’s Climate Lobby. If you’re new to all this, their website is a great place to start. You could also follow Ted Halstead and the Climate Leadership Council. I encourage you to learn, join and participate. This is a policy thats time has come.

The second idea I found in my search for solutions was that of a basic income. This is the simple idea that every single person is paid a basic income, unattached to any work or wealth or other conditions. Essentially, everybody gets equal benefits, whether rich or poor, skilled or unskilled, urban or rural, driven or lazy. It’s a universal benefit that essentially turns the increasingly threadbare social safety net into a solid and safe floor, releasing effort, energy and enterprise and allowing risk without fear of destitution.

I could go on and on about the people and groups and organisations supporting this policy. I could tell you about the arguments for and against. I could outline the results of previous tests and point to ongoing and planned tests around the world. But there’s no point, because this idea is exploding so rapidly it’s hard to keep up. A good start would be to follow Scott Santens, Guy Standing or the Basic Income Earth Network.

The third idea is far less popular, far less understood, and yet just as important. This is the idea of monetary financing – of removing at least some of the power to create the money supply away from private banks, and to bring that power under independent central bank control for public benefit. It is called many things and there are many versions of it – Sovereign Money, QE for People, 100% reserve banking, helicopter money and more. But the core idea is that we adopt a permanent form of quantitative easing, with the benefits going to a shared, public purpose. If you don’t understand what that means, don’t worry about it – this kind of economics is not everybody’s cup of tea. Basically, we need money, banks create money via loans, and this causes problems. Carefully ‘printing’ more of that money directly allows much greater control and stability. And spending that money into the economy for some form of public good is only fair. After all, the money may not belong to us all, but the monetary system does.

The most dynamic and effective group politically campaigning for monetary reform is the UK’s Positive Money. They are joined by the EU sister group QE for People, by the self-consciously-named American Monetary Institute, and by about 30 other national and related groups around the world. But as much as these groups campaign to raise awareness, the real discussion is held by a small number of central bankers and monetary policy nerds. Everybody thinks about money, but few people think about what money is. But some do, and some is enough.

The point is that I now had my solutions. I had identified three problems – three deep, structural, systemic problems with the environment, with incomes and with debt. And now I had identified my three solutions – a carbon Tax & Dividend, a Basic Income and Monetary Financing. Each of the problems was vast, serious, destructive, worsening, unsustainable and potentially catastrophic. And each of the solutions was simple, focused, elegant, evidence-based, politically balanced, radical enough to effect systemic change, yet institutionally realistic as well.

I immediately threw myself into reading about these policies, writing about these policies, arguing these policies, and generally exploring these policies and the organisations, people and ideas behind them. Night after night, day after day, I soaking up the ever-expanding body of information and opinion behind these policy solutions until I was convinced. At some point in any career, any venture, any project, there comes a time where you have to stop studying and start applying. At some point you have to accept that the evidence in front of you will always be imperfect and you have to make a decision. Tax & Dividend, Basic Income, Monetary Financing. These were now my policies. I begain to believe.

And then something wonderful happened. I had an idea.


I called the idea ‘Equitable Capitalism’, and I threw myself into it. The concept was simple: I would integrate the three evidence-based, functional and specific economic policy solutions in which I now believed into one single, coherent whole. I would take three existing and important ideas and combine them in some way into one cause, harnessing and focusing the people, resources and energy behind each them into one focused purpose that would be greater and more effective than the sum of its parts. From three stories I would tell one story – a new story and a radical story I accept, but at least a possible story, which was more than I was getting elsewhere. In my mind and heart I was about to save the world in the most dramatic way – with one single idea.

I launched a blog, began a book, tweeted, posted and experimented with social media and memes. I engaged, I discussed, I reached out. I argued in support of my three polices, and strategically tried to introduce people supporting one of the three policies into the ideas behind the others. I tried to connect Right and Left, Libertarians and Authoritarians, Socialists and Capitalists. These ideas could save the world and give each faction what they wanted, I argued. From three policies, one cause. Solidarity, together.

I was encouraged in my quixotic endeavour by synchronicities between each of my three adopted policy solutions. The introduction of a carbon tax and dividend system would contribute not only reducing carbon emissions and ameliorating climate change, but would also introduce the mechanism and establish the seed of what could become a basic income. Monetary financing would create ‘fiscal space’ (i.e. money) for public investment into the transition to clean energy, and would relieve pressure on the housing costs faced by those on stagnant incomes. And so on.

I was even more encouraged by some of the people involved in campaigning for each of the three policies on which I was focused, and in particular by the connections between the issues that they themselves could plainly see. Fran Boait, executive director of Positive Money, came to monetary reform from climate science. Stanislas Jourdan, of the related group QE for People, was a lead organiser in the European basic income movement. Scott Santens, the leading U.S. basic income communicator, is a strong supporter of carbon tax and dividend. Guy Standing, one of the leading figures of the Basic Income movement, talks about tax and dividend and monetary reform too. Among the campaigns for each of the three policy solutions, there were others starting to connect the dots.

I was sure that I was on the right track, and every day the news and analysis websites confirmed it. The seas rose, the arctic melted, Brexit happened, Trump happened, Sanders and Le Pen and Corbyn happened, interest rates remained stuck near zero, the mountain of debt grew. The political centre seemed to be discredited and collapsing and, in the absence of any credible alternative, the resulting vacuum was often filled with those eager to use division to gain power and attention. In the absence of the best, we got the worst. In the absence of inspiring ideas we got fear of the bond markets. In the absence of a positive vision of a prosperous, sustainable and progressive future we got warning after warning of the environmental and social dystopia that awaits. The world seemed both terrified of an approaching nightmare and pregnant waiting for a new idea. Surely Equitable Capitalism was that idea – a synthesis of three specific and coherent economic policies into one new and evidence-based alternative, attractive across the political divide. Surely it was obvious? Surely, even if there was only a small chance it might work, surely we were was obligated to try? Perhaps this was the idea to save the world?

Needless to say, very little happened. A little correspondence, a few followers, a few engagements, some small, fleeting flashes of attention, but nothing substantial. I had identified the three core, specific economic problems behind humanity’s most important challenges. I had found three credible and increasingly popular solutions to these challenges. If I could just get people to recognise the potential connections between these ideas, I thought, we might have a chance.

But sitting at home, alone, like a million other keyboard warriors, I found little purchase for my new perspective. I might have combined three smart, progressive economic policies into one general, somewhat vague idea. I might have drawn connections between disparate economic campaigns pointing in the same direction. I might even have given it all a name. But no matter how hard I promoted my world-saving idea, very little came back.

And for over a year, that is how it was. Three problems, three policies, one Equitable Capitalism. I read, I thought, I wrote, I worked on my book, I tweeted and I posted. I walked the beach and fed the dogs and spent time on my computer trying to introduce the world to a concept, an organising idea and a direction that I believed could be vastly beneficial to us all. Make no mistake, I believed that this was an idea that might save the entire world, not metaphorically, but literally. Not one small bit at a time but all together, instantly. Not far in the future but now, and over the next few years.

My new and laser-focused purpose was to bring Equitable Capitalism to the world. But the world, it seemed, wasn’t listening. Until one day last week, when the phone rang.


The call was from Rachel Oliver, lead organiser for Positive Money, the UK group campaigning for monetary reform. The invitation was to a retreat of people with a passion and interest in monetary reform being held at the Centre for Sustainability and Leadership at the Ambleside campus of the University of Cumbria.  Ambleside lies on the shore of Lake Windermere, in the breathtakingly beautiful English Lake District. It was a wonderful weekend and I will tell you about it, but first let me outline where I was in my project to save the world.

In my eyes, Equitable Capitalism (the idea that global free market capitalism might be reformed through three specific and distinct economic policies) was now common sense. Everywhere I looked in the media I could see increasingly alarming evidence of the three core problems. Every time I checked in on the campaigns for my solutions I was encouraged by their explosive expansion. But nobody else seemed to connect the dots, as I did.

But what did I actually have? Sure, I was conversing with (and being taken seriously by) some of the top minds engaged in changing economics and economic policy for the better. Sure, there were economic connections between the ideas and solutions I was engaging with and championing. Sure, some of the people focused on one of these ideas were also often focused on others. There were connections – there were possibilities. But at the end of the day, all I really had was a list of three very different policy ideas and a vague, undefined notion that these ideas might somehow be organised and presented into a coherent whole. No wonder it wasn’t catching on.

In my explorations into how I might combine three stories into one, two things stood out. The first was the concept of ‘the commons’. This is the idea that all of us – every last one of us – are the shared legal and moral owners of some things. Our planet’s atmosphere is a commons. The seas are a commons. The resources of the earth and the sun are a commons. Most of the most important intellectual property in the history of humanity is commonly owned. Our public institutions and infrastructure is commonly owned. Our monetary system is commonly owned.

It seemed reasonable to me to view this commons as a wide array of very valuable capital assets, and to expect that we, the legal, moral and actual owners of these valuable assets, might expect at least a share of the considerable returns from them. Framed in this way, it was easy for me to see that focusing on ‘the commons’ offered a justification for the economic policy solutions I was advocating. Simply put, I own part of the atmosphere, and if you want to use that atmosphere to dispose of your waste Co2, then the least you can do is to pay me. Similarly I, along with everybody else in my currency jurisdiction, am a part owner of the monetary system and thus am entitled to at least a share of the considerable advantages that come from an ability to create money. In other words, the atmosphere and monetary system are valuable parts of the commons, and a basic income would be a fine mechanism to distribute some of the returns from these assets to you, to me, and to everybody else. In other words, my three policy solutions all seemed to derive their moral justification from the idea of common ownership.

The second idea was actually an image – of a doughnut. Conceived and popularised by Oxford economist Kate Raworth, this is the idea that the economic space within which we can safely operated is squeezed between the requirement for basic human needs on one side, and global, planetary environmental limits on the other. It’s basically a conceptualisation of the environmental and human space between what we need and what our planet can tolerate, expressed as a doughnut. Kate Raworth has many other positive, important, and urgent ideas in her book ‘Doughnut Economics’. But that one diagram, expressing our human social and environmental predicament in a such a clear, simple, understandable way, was a ground-breaking way of looking at ourselves and the world.

And so, obsessed with the problems and policies that I had made my own, convinced that there was at least the possibility of great value from my direction of thought, and armed with the idea of the commons and a copy of ‘Doughnut Economics’, I took the night ferry across the Irish Sea to England and to Windermere. And it was incredible.

There were about thirty of us, six from Positive Money and about two dozen supporters from various backgrounds, mostly money-related. Our focus was on how to understand, explain and communicate the ideas underlying our monetary system and the case for reform. These were rarefied, focused and extremely important subjects. These people had recognised that and had attached themselves to a group focused on organising and promoting this perspective and this platform – they were self-selecting. They were also open, passionate, friendly, focused and very, very smart.

The buzz was incredible, the connections immediate, and the conversation continuous. There was plenty of free and unstructured time for walks, pints, introductions and discussion, while in the structured sessions we focused on deep storytelling for collective action, and were introduced into the ideas of Marshall Ganz. Ganz believes that it is emotion that drives political action, and that emotion is transferred through deep attachment to shared values. These emotional values are best communicated through narrative – through shared stories. And that starts with an open, honest and authentic Story of Self. It is these techniques that I am now using as I write these words. I am no longer arguing a disparate bunch of economic policy points backed by statistical evidence and academic theories. Now I’m simply telling you my story.


And that is how I got from there to here. Let me tell you where I am now, and what I think we should do.

Our climate is in serious trouble and we’re getting close to destabilising it irreparably. Despite the Paris Agreement and the spectacular success of renewables, our carbon emissions trajectory is still on the wrong track, and the damage and danger is increasing by the day. Around the world, millions of now surplus people scramble for low-paid work, living in the fear of being one pregnancy, car-breakdown or rent increase away from destitution. Meanwhile vast sums of taxpayer’s money have gone to prop up a grossly unfair and dysfunctional monetary, financial and banking system.

Under the onslaught of such systemic pressures, our political system is breaking down. The state-controlling socialist Left is discredited. The free-market, neoliberal Centre is discredited. And much of the Right seems to have drifted off into the insularity of protectionism, borders and other controls on movement. There’s nothing left – no ideas, no vision, no leadership, no direction, no path to a better tomorrow. For many people, our biggest idea is to build a wall. Trump, the Brexiteers, Sanders, Corbyn, and all the other ‘populist’ challengers from both Right and Left are political symptoms of very real, very deep structural economic problems. Politics is broken because economics is broken.

We need a new idea. The old, stale economic ideas and stories from the 19th and 20th centuries no longer apply in a 21st Century world of online shopping, Facebook and competition from Vietnam. Marx is dead. Keynes is dead. Hayek is dead. Friedman is dead. None of them understood the internet or thought realistically about artificial intelligence or 3-D printing. We clearly and unambiguously need a new economic and political story to orientate us towards a fairer, more civilised and more sustainable order in the world we are actually living in. We need a new organising idea.

I believe that the core economic policies of carbon tax and dividend, a basic income, and monetary reform must represent the key policy ingredients of such a new idea. I believe that the perspective of the commons and the visualisation of the doughnut are key to how that story might be formed, framed, justified and communicated. Essentially, I believe that it may be possible to consciously, deliberately and strategically create a new economic and political story fit for the technological realities of the 21st Century, and to open up a new path to a positive, prosperous and progressive future for us all.

The time to do something is now. We are in a crisis, and an emergency. Climate change is with us and accelerating. Every day countless millions of real, emotional human beings live ugly, desperate lives, trapped between absolute obligations and limitations on one hand, and the rapidly changing dynamics of the labour market on the other. Financial eyes watch property bubbles in Australia, Canada and elsewhere, wondering where the next global debt crisis will begin. In the absence of an overarching political and economic story to understand and counteract these forces, we are left without vision, without purpose and without hope. The gap is filled with useless cynicism, despair and apathy, and with lowest-common-denominator appeals to the worst of our nature.

This is happening now, while you read these words. The arctic is melting, the seas are rising, Trump is in the White House, the UK is leaving the EU and interest rates remain stuck near zero. Four in ten French voters wanted Marine Le Pen to lead, govern and represent them. Authoritarians are on the rise. The traditional Left-Right divide is fragmenting. The out-of-touch establishment seems useless. The barbarians are overwhelming the barriers. Almost every election throws up a once unimaginable surprise. The centre is not holding.

It is intolerable, in a world of melting glaciers, for one individual taking a private jet on a weekend break, to emit more Co2 than an entire town switching to low energy lightbulbs. It is deeply unfair that all productivity gains go to capital and none to labour, and that workers must engage with employers under threat of destitution. It is unconscionable that the finance and banking industry, which deeply damaged the economy and took many billions from taxpayers and through austerity cuts, remains essentially unrepentant, unaccountable and unchanged. It is tragic that the root causes of these moral outrages remain mostly unexamined in public discussion, while immigrants take the blame for the resulting pain. Our current order is clearly and blatantly unfair, immoral and unjust. This is wrong.

Now is the time for change. Everywhere we see the search for a new perspective. The two big political and economic organising ideas that began in the 19th Century and evolved during the 20th Century are no longer fit for purpose. None of them are relevant in a world of microchips, the internet and AI. Yet we remain without an alternative framework within which to understand and change our world. We have no vision of a bright and positive future, and no map of how to get from here to there. We are lost in the mist, without perspective or direction. We are frightened, unfocused, disconnected and useless. Adrift.

But there is a glimmer. Out there, appearing and disappearing in the shifting fog of current events, there is something. There is a possibility. There is a shimmer of potential, and a fragile gossamer thread of achievable action linking there and here. There is a vision. I have a dream. And I am not alone. Others see it too.

This dream is of our world one hundred years from now, prosperous and at peace. Co2 levels are falling steadily and most environmental indicators are dramatically improving. The economy is stable and boring. This is a world in which the environmental and social limits of market behaviour are taxed to pay for a universal and guaranteed basic income. It is a world in which productive and strategic public investment is funded by independent central bank control of the money supply. In this possible future, the returns from the commons are shared with the owners of the commons. The outside of Kate Raworth’s doughnut is taxed to pay for the inside, while the market remains free within that safe ecological space. This would be a new and better social contract, fit for the new world we are moving into.

The implementation of just three specific policies could make that happen, and help create that future one hundred years from now. Not all at once. Not perfectly. Not right away. But it could happen. Three vast, dangerous and intractable problems that are destroying our world and our future. Three simple, elegant, evidenced-based solutions, already emerging rapidly. We are close. From three important, separate and distinct economic policies it may be possible to construct one intellectually coherent, morally justified and emotionally contagious whole. Can we not just connect the dots?

There is a ‘feel’ to certain times. Sometimes there’s a free-floating energy in the air, just waiting to be grounded and made manifest. It’s like a nervousness – a general feeling that something significant could happen. I experienced this feeling as a young teacher in the People’s Republic of China early in 1989. At the time, China was just opening up and was just beginning its transition from state communism to free markets. For the first time in decades, street trading was allowed, and teenagers selling cigarettes made much more money than university professors. Inflation was rising and the iron rice bowl was shattering. As the first shoots of market freedom sprouted, the air was tense with uncertainty and dissatisfaction, but also pregnant with expectation and hope. It was like an ideological spring.

And what a spring it was! On April 8th popular politburo member and former General Secretary of the Chinese Communist Party Hu Yaobang had a heart attack in the Zhongnanhai government buildings while discussing education reform. He died on April 15th and a small group of students protested at his funeral by breaking bottles on the ground (a reference to a double meaning in the name of premier Deng Xiaoping). On April 22nd fifty thousand students marched to Tiananmen Square to participate in Hu’s memorial service and deliver a letter of petition to Premier Li Peng. By May there were demonstrations throughout China, and tens of millions of people in the streets. The workers joined the students. There were rumours of army rebellion. For one glorious week the state media was absolutely and entirely free. Everywhere was solidarity, expectation and a hope that survived Tiananmen Square on June 4th, and that is still an important part of what China has become.

My point is that our time, now, feels like China did then, back in the spring of 1989 before Hu Yaobang died. It is as if the emotional-political landscape were saturated with petrol or gasoline, just waiting for a spark to ignite it. The tension is there, the stage is set, and the vacuum is waiting to be filled. Then something happens, and then something else happens, and then suddenly everything is different. When old orders are breaking down and everything is unstable, even the smallest things can make a very big difference. A handful of students breaking bottles at a funeral changed China.

China offers not only an example of almost spontaneous mass political movement and engagement, but of dramatic system change itself. The leadership of China, under Deng Xiaoping, recognised and admitted that their precious ideological system wasn’t working, and so they consciously and deliberately changed it. The same thing happened in the last years of the Soviet Union where, in an atmosphere of instability like our own, the entire political and economic system of hundreds of millions of people was changed, involving events ranging from the rise of Mikhail Gorbachev to a misplaced phone call between East German border guards. Vast, systemic economic and political change is perfectly possible.

In 1947, thirty-nine scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich Hayek to meet to discuss the state, and possible fate of classical liberalism. From that meeting came the ideas, ideology and organisation that was behind Reagan, Thatcher and what is now called modern, free market neoliberalism. One meeting that changed the world.

In 1962 two men, assisted by a handful of others, leased some land on the coast of California to establish the Esalen Institute and explore, organise and communicate the ideas of the nacent Human Potential Movement. These ideas informed and directed the counter-culture revolution of the later 1960s, and helped form the culture and society we live in today. Just a few people, a little money, and an idea. And they changed the world.

I myself have sat in the reading room of the British Museum where a passionate and impoverished activist, economist and writer wrote the words that expressed the ideas that dominated the political and economic landscape of the world for much of the 20th Century. One man, with pen and paper, in a safe and quiet place. That was all it took.

This has been done before. It may not be easy, but it is certainly not impossible.


And so, dear friend who has read this far, this is where our stories begin to intertwine. Because if you accept that we have three core problems with the environment, income and debt; And if you even suspect that the three specific and rapidly emerging economic policies of Tax & Dividend, a Basic Income, and Monetary Financing might even possibly be a solution to these problems; And if you see a gigantic, vast and ever more urgent gap in the market for political and economic organising ideas and ideology, and if you can sense huge pent-up demand for such ideas. And if can get past the scale of the issues and catch just glimpse of the possibility that these three economic ideas might be combined into one simple and emotionally-communicable ideology. We’ll then, my friend, the question is, what are you going to do?

Feeling what you feel, about these deepest and most emotional of issues and values, and knowing what you know (including what I have just told you), what are you going to do about it? Our world is dying, our family, friends and neighbours are suffering, our financial system is dysfunctional and unfair. These are facts. The existing movements and campaigns for Tax & Dividend, a Basic Income, and Monetary Reform are already connected by the core concept of ‘the commons’, and are already framed by Kate Raworth’s doughnut. A lot is known about effectively developing and contagiously communicating stories and ideas.

It is not for me to tell you what to do. You are your own person with your own perspective and your own take on it all. You have your own job, your own network, your own platform and your own influence. God knows, you have your own distractions. So you know best what you can do the best from where you are and with what you have. But if you’re not sure of where to start, and for what it’s worth, here are my suggestions:

1. Learn. You probably know a lot about the three ‘meta-problems’ just from following the news. And if you are reading this you probably know a lot about at least one of the movements and campaigns involved, and the ideas behind it. You may even be familiar with two or even all three. But if there are gaps in your knowledge, I suggest that you fill them.

2. Believe. At some stage you’ve to stop studying and apply what you’ve learned. At some point you’ve got to stop reading about it and arguing about it and thinking about it and make a decision about what it is that you actually believe and what, exactly, are you going to do about it. Learning is good, but at some point you have to make up your mind. The information will always be imperfect. When looking at the range of our serious problems and at the array of solutions on offer, at some point you have to decide. In other words, you have to stop questioning and believe.

3. Connect. You’re not the only person thinking this way, feeling these possibilities, scenting the faint, sweet smell of hope in a political and economic desert of hopelessness. There are others too. Join them, follow them, reach out to them, meet them in person. Share your story and your dream with them, as honestly and openly and authentically as you can. All is not lost. There is a way out. There is a possible path to a safe and beautiful future.

4. Support. The idea that it may be possible to construct an ideology that saves the world may be quixotic. The odds of this endeavour succeeding may be small. It may indeed turn out to be “unrealistic”. But the resources required to get it out there and underway – to test it in the world – are relatively small in contrast to the potential benefit if it actually worked. In other words, while high-risk, this venture has a relatively small downside and a potentially unlimited upside. The potential returns are vast compared to the resources needed to test it in the market. For those with extra time, skills, money and organisational structure who want to invest wisely in changing the world for the better, investment in this idea is surely a good deal. Seed money and angel investment would nurture a lot of fragile roots at this early stage, not least my own.


The Positive Money weekend on Windermere, where we discussed telling the story of money and of monetary reform, was structured in the presentation, exercise and worksheet way familiar to the corporate, professional and academic worlds. At the end of that retreat we were each asked to share our dream and vision of the Positive Money campaign six months from now. It seemed a bit twee at the time, as these things often do, but I thought about this question on the train and bus and ferry home. And my dream is this:

Much is the same. I’m back at Ambleside in the beautiful English Lake District, on the same campus and in the same room. But this time, most of the people are different. This time, in my dream, Fran Boait, Ben Dyson and Stanislas Jourdan are there, from the monetary reform movement. Guy Standing and Scott Santens are there from the Basic Income movement, and Ted Halstead, Joseph Robertson and James Baker from the carbon Tax & Dividend movement (yes, that James Baker – it’s my dream!). Marshall Ganz would be there, and Kate Raworth and, for the deep historical perspective of narrative and all-round wisdom, historian Yuval Noah Harari. World Bank economist Paul Romer would be there. There would be others too, but the group would be small – under twenty.

This group would be there for a week – a whole week! – facilitated and structured by Positive Money’s indomitable Rachel Oliver, as before, and with lots of free and loosely-structured time for those spontaneous, intense and stimulating conversations in which the magic happens. As before, there would be homework – ideas and information to be read, watched and understood prior to meeting. Participants would be expected to be prepared. But this time, the topic and the focus would be different.

This time, the goal would essentially be to consciously, deliberately and strategically construct a new economic and political ideology fit for the 21st Century and the challenges we face. With the expertise and experience from each policy area, and guided by the best and wisest storytellers in these matters, we would try to merge three stories into one, and thus tell a new story. A story of survival, of progress, of potential and of hope. A vision of what the world could be. And a specific, explicit and realistic plan to get us there.

That’s my story – or at least an edited, framed part of it. And that’s my dream. Thank you for reading. If this has touched you, and if you want to do more than just read, then please do what you can.

Do it now. We have no time to waste.

One Policy to Stop Climate Catastrophe

Markets made this blog possible. Markets allow activists to travel easily and cheaply to Marrakech. Markets give us light and heat. They put food on our tables. It was markets that lifted a billion chinese people from abject poverty, and markets that put mobile phones in the hands of most Africans. Markets have done far, far more to improve the lot of humanity than any government, NGO, or other organisation. Railing against them just illustrates rigid ideology and makes one automatically irrelevant to any serious discussion. In the struggle to solve the biggest and most important problem of our time (or of any time, for that matter), ‘market denial’ is as toxic to progress as climate denial.

economics bollox
The cost of this isn’t included in the price of heating oil, electricity, food, travel…

The market is the ONLY mechanism that can make our entire energy system sustainable in the short time we have left without inflicting horrific misery on billions of human beings. And it only needs one thing – a realistic price on carbon. If the real costs of climate change are included in the price of carbon, then the market will take care of the rest. If the price of carbon reflected its actual cost, then every single product and every single service that used carbon would be much, much more expensive, and every single product and every single service that didn’t use carbon would be, in relative terms, much, much cheaper. Just internalising the real cost of carbon into its price would cause market and human activity to flow from the carbon-based to the non-carbon based.

There are three ways that the cost of carbon can be internalised into its price:

(1) The first is the direct taxation of carbon, with the proceeds flowing to the government (like cigarette taxes). This would make every thing that contained carbon – light, heat, travel, food, etc., etc. – much more expensive, with terrible human consequences. Of course, government could use this money to help those badly affected, but that would be most people. And, of course, the vast bureaucracy of means-testers, scheme administrators and other controllers would be very expensive. Economic power would flow from people to government as people found themselves facing crushingly higher prices and mountains of forms to fill in for handouts to help them cope. For these reasons this option is not politically possible in a democracy.

(2) The second way to internalise the costs of carbon is through Cap and Trade, also known as Emissions Trading – what we have now. This involves government setting a cap on carbon use, then letting the market buy and sell pollution permits and offsetting credits. This method worked to reduce the sulphur emissions that caused acid rain and the CFCs that caused ozone layer depletion because there were only a few big players in those markets. But it doesn’t work in the much bigger market for carbon in which we are all involved.

Cap and Trade
It’s OK – they bought some credits from a tree farm in Moldova.

In reality, Cap & Trade rewards the heaviest polluters (who get more carbon permits), transfers pollution to jurisdictions with weak measurement and enforcement, and creates perverse incentives (don’t reduce emissions because then you’ll get fewer permits in the future). It even causes carbon emissions, with extra carbon being emitted solely for the purpose of gaining permits, which can then be sold. It raises costs for consumers and small business (who aren’t part of the market for permits), and transfers money from consumers and small business to big business. The ‘cap’ is set largely out of sight, so big business influence is considerable.

Pope Francis summed up Cap & Trade well in his encyclical on the environment: “The strategy of buying and selling ‘carbon credits’ can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.”

(3) The third way to put a price on carbon is through carbon Fee and Dividend. This is ‘revenue-neutral’ carbon taxation in which all proceeds are distributed equally to everyone. Everybody’s costs go up, but everybody also gets a cheque in the post. If you use less than the median level of carbon then your cheque will be bigger than your extra costs and you’ll come out ahead. If you use more than the median level of carbon then your cheque will not cover your extra costs and you’ll lose out. Under Fee and Dividend two thirds of people would come out ahead, making a real, serious price on carbon politically realistic. Money would flow from heavy polluters to light polluters.

Fee and Dividend
Political tribalism and ideological rigidity don’t solve climate change.

James Hansen supports Fee and Dividend. The US Green Party supports Fee and Dividend. Elon Musk (who has used the market to do more to reduce emissions than all the climate activists put together) supports Fee and Dividend. The Democratic Party legislature of California supports Fee and Dividend. On the other side of the ideological spectrum Exxon supports Fee and Dividend, dozens of non-denying GOP congressmen and senators support Fee and Dividend, and many other big business people and corporations support Fee and Dividend.

Fee and Dividend
The red line is 2016. Something significant has clearly changed this year.

It may already be too late. Three days ago the temperature at the North Pole was 20C above normal, and in the depths of the arctic winter night the ice is still melting. Ice coverage data from the last two months suggest we may have already reached a tipping point (see image below). If we do still have a chance then it is not through big, bloated, controlling, bureaucratic, wasteful, out-of-touch government directly controlling people’s incomes and energy usage like some sort of God or emperor of old – nobody will vote for that. And, as has been amply proven, it won’t be through big corporations wheeling, dealing and speculation in pollution permits issued in the dark by heavily lobbied government, as we have now.

Fee and Dividend puts a real, high, serious price on carbon while making 2/3 of people richer. It is politically possible, viable and realistic – a policy that Exxon and the US Green Party agree on. It establishes the idea that polluters should pay and the polluted should receive. It has rock solid economic, philosophical and moral foundations. It gives power, choices and freedom to people, and not to fat, out-of-touch governments or greedy, shortsighted corporations. It can provide the foundation for a basic income. It can be implemented gradually, in any tax jurisdiction, and can be expanded internationally.

Complaining, whining and criticising does nothing for anybody – if you’re not FOR something then you’re part of the problem. No solution to carbon emissions will work without a real price on carbon. Direct carbon taxation at any meaningful level is highly regressive and thus not politically possible. Cap and Trade has been tried and shown not to work at anything near what’s needed.

Fee and Dividend is our only hope.