Economy · June 24, 2022

Robert Reich (How we resist Putin and stop the climate …)

How we resist Putin and stop the climate catastrophe

How can we resist Putin and at the same time avoid a climate catastrophe?

Give up our dependence on fossil fuels. Here’s how we get there.

In response to the Russian invasion of Ukraine, the West has adopted a series of sanctions.

Russia is the world’s second largest exporter of crude oil and the world’s leading source of natural gas. Regardless of the short-term effects on our portfolios, in the long term we must switch to renewable energy if we have any hope of keeping the earth habitable and freeing our economy from the influence of geopolitical enemies.

This is where carbon dividends come into play.

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It works like this. Let’s put a limit on the amount of carbon we allow into the economy. Permits up to this limit would be issued and energy companies could purchase them in quarterly auctions. In every mine, refinery and port of entry, these companies would have to use a permit for every ton of carbon dioxide that would be released into the atmosphere once the fuel is burned.

When the permits run out, they can’t mine or import any more carbon-polluting fuel.

To prevent the climate from rising 1.5 degrees Celsius above pre-industrial levels – the goal of the Paris Climate Agreement – we need to cut emissions by around 90%. Achieving this target by 2050 would require reductions of 7.5% per year.
We are currently decreasing at a rate of 1.2% per year.

With a carbon cap, to ensure that our goals are met, we could simply reduce the amount of permits issued each year by 7.5%.

But how would we do it without Americans getting beaten up by the higher prices at the gas pump? This is where carbon dividends come into play. Revenue from the sale of the permits will be distributed to the public as direct payments, without constraints.

For most of the middle class and poorest Americans, the dividend will cover more than any increase in fuel prices, and they will come out ahead. The people who produce the most carbon emissions are generally well off and can afford to raise prices.

The earth’s ability to absorb carbon is a natural resource, which we should share equally, rather than giving free rein to the wealthy and oil-profiteers.
Plus, everyone benefits from a cleaner planet.

One study found that a quarter of a million premature deaths would be averted over the next 20 years in the United States with a carbon tax and dividend program.

I know what you are thinking right now. Sounds good Bob. But it will never happen. Don’t be so sure! The idea is particularly popular across the political spectrum.

Carbon dividends were first proposed in 2009 in a bipartisan bill, and subsequent plans came from both Republicans and Democrats.

And there are already precedents for parts of this program. Since 2009, the Regional Greenhouse Gas Initiative has limited and sold carbon emissions permits to power companies in 11 northeastern states. It is boosting their economies and has proven to be politically resilient.

And in Alaska, each resident receives between $ 1,000 and $ 2,000 annually from the Alaska Permanent Fund, which invests the state’s oil royalties. Over 80% of Alaskans say it improves their quality of life.

We treat gas prices as something beyond our control, giving dangerous amounts of power to oil states like Russia, with alarming consequences. By weaning from gas addiction, we would gain relief from the dirty air that kills millions of people around the world; relief from the constant bleeding of state subsidies for fossil fuels and the wars for oil; and, above all, relief from the continuing destruction of the earth’s climate.

None of this is impossible.

The best way to contain Russia and build a sustainable future is with a carbon dividend.