But how will they pay for it?

by Henry on September 5, 2019

Since the climate change townhall is happening, here’s a piece I wrote for Wired about it last month, based on some ideas of Jeff Colgan, Jessica Green and Thomas Hale.
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Last week, CNN announced plans to host a climate crisis town hall with the Democratic presidential candidates on September 4. MSNBC scheduled a multiday climate change forum with the presidential hopefuls later that month.

In both venues, some version of the perpetual question will undoubtedly be raised: “How will you pay for the costs of dealing with climate change?”

Despite its pervasiveness, this is a profoundly wrongheaded line of inquiry. Asking how to pay for the impact of climate change implies that these costs are a matter of choice. The reality is that global warming will impose massive costs, regardless of whether policymakers respond or not. Thus, the real question is not “How would you propose to pay?” but instead “Who is going to pay?” and “How much?”

People are already paying for climate change with their lives. Rising temperatures are killing more than 150,000 people every year. This death toll is estimated to increase to 1.5 million people annually by the turn of the century. Some are confronting the likelihood of failed crops; others have been forced to flee floodplains.

Those currently paying for the effects of climate change are the most vulnerable—people in the developing world, the poor, the sick, the elderly, and the very young. As the world changes, more people are going to suffer the cost of heat waves, rising water, damaged or dying ecosystems, and flooded coastal cities. This will create what political science and public policy experts describe as “existential politics,” in which different groups fight to preserve their entire way of life.

On one side of this existential fight will be those who want things to continue mostly as they are. Oil companies have trillions of dollars worth of petroleum still in the ground. An entire energy infrastructure has been built on the back of fossil fuel extraction. If fossil fuels become “stranded assets”— economic assets that suddenly lose most or all of their value—crucial sectors of today’s economy will be utterly transformed, hurting the interests of the businesses that run them. Unsurprisingly, these businesses are fighting back. So, too, are industrial workers such as coal miners whose way of life is threatened.

Meanwhile, others will suffer the effects of continued inaction. People who live on coasts will face the risks and costs of flooding, while many of those who live inland will have to deal with changing weather patterns, droughts, and unbearable heat waves.

This fight has already started to play out. Fossil fuel interests are rich, politically influential, and well organized. They are able not only to pay for lobbyists in Washington, DC, but to organize an entire political movement at the state level. The Koch-funded “grassroots” organization Americans for Prosperity pushes to protect fossil fuel interests in individual states. The group has become intimately intertwined with the Republican party.

The interests on the other side are broader, less well organized, and less influential. This is in part because everyday Americans don’t really understand that they will be on the hook for many of the costs of climate change unless there is a dramatic change in policy.

If we continue on our current trajectory, the lives of ordinary voters will be fundamentally transformed while fossil fuel companies continue to make vast profits. Any serious policy response to global warming needs to transfer some of the costs from voters to the fossil fuel interests, where they belong.

Some might disagree with this approach, advocating instead for a consensus among all parties. The problem with this rejoinder: The politics of global warming are necessarily divisive, and one side of the divide is already mobilizing to protect its own narrow interests.

To fight global warming, we need to organize a broad public counterweight against the sectoral interests that are trying to block action. Building an effective “Green New Deal” will require financial resources to unite a coalition in favor of climate action, and to split the counter-coalition. Such policy will also need to remake the international political economy to build both cross-national solidarities and domestic alliances.

Yet before all of this can be done, it is crucial to change the terms of debate and acknowledge reality. We are going to have to pay for global warming, one way or another. The key question is who will pay—and how we can distribute those costs fairly.

{ 11 comments }

1

Tim Worstall 09.05.19 at 12:33 pm

“The key question is who will pay—and how we can distribute those costs fairly.”

Well, perhaps. But also important is that we do whatever it is efficiently, therefore there is less to pay.

Which leads to JQ and the carbon tax of course.

“Any serious policy response to global warming needs to transfer some of the costs from voters to the fossil fuel interests, where they belong.”

Sure, a carbon tax.

2

hix 09.05.19 at 1:00 pm

A death from climate change map with 0-2 Persons a million in the US aswell as all other rich countries and a big hig red number in Africa is not going to change the attitude of the typical voter unfortunatly.

3

Anarcissie 09.05.19 at 2:07 pm

I think the elimination of Gabbard from the set of legitimated presidential candidates at these events shows that the debate or conversation has already been fixed, and that the program of capitalism, war, and imperialism will not be seriously questioned. Fables about jobs and growth will continue to be promoted. I hope someone can sabotage the arrangement, but it won’t be easy.

4

Omega Centauri 09.05.19 at 2:18 pm

With so much of the public, my oldest son included the attitude seems to be I won’t pay for uncertain future benefits, that will mostly go to people younger than me. When everyone is thinking of getting through the next month or quarter, an investment in the future whose benefits will be diffuse across the world and across generations just doesn’t make sense.

So we get support that is a kilometer wide, but only a millimeter deep. And that low intensity just can’t compete against the fossil fuel sectors for whom it really is an existential issue.

5

Dr. Hilarius 09.05.19 at 4:32 pm

We need to curtail federal (USA) flood insurance and relief. Subsidized insurance encourages people to build in and remain in at-risk areas. It disguises actual costs without addressing the underlying problem. Perhaps these subsidies should be phased out with consideration of property owner incomes and lengths of residency.

I would also favor electricity rates being tiered to discourage growth in the US Sun Belt. Cheap land and loose land control makes for inexpensive housing but increasingly it’s only livable with intense, year round air conditioning. (And a special surcharge for electrical use for bitcoin mining.)

6

Ebenezer Scrooge 09.05.19 at 5:37 pm

Tim@1: There is a big difference between who should pay and who shall pay. Yes, a carbon tax is efficient. But is it politically possible? In climate change, that is our main constraint.

7

Jim Harrison 09.06.19 at 4:27 pm

When you pay has a lot to do with who pays, how much they pay, and how they pay. A serious effort undertaken now will impact fossil fuel interests severely by stranding their assets but will affect the public at large much less seriously and probably have a lower net cost than procrastination even if you discount future benefits. Waiting until things get worse will require a larger effort but impact the population more widely, thus lowering the relative burden on the well off. For example, food gets more expensive for everybody, but its price doesn’t matter very much to the well off. The affluent will also be able to move more easily to less stricken regions.

A similar pattern obtains when you consider the political consequences of timing. Dealing with climate change requires changes in human behavior but how drastic these changes have to be depends very much on how promptly the problems are addressed. Sorting the trash, eating less meat, and swapping in LEDs are very different from needing a license to have a baby. I’ve been arguing to conservatives for a good twenty years now that delaying action on global warming runs a major risk of making intrusive, authoritarian governance inevitable. The last great climate crisis, the Little Ice Age, ushered in the Age of Absolutism. States became much stronger where they didn’t simply collapse. I rather expect a similar outcome this go around is the best we can hope for if the democracies prove incapable of meeting the challenge quickly enough. Timing matters.

8

anonymousse 09.06.19 at 4:38 pm

“Any serious policy response to global warming needs to transfer some of the costs from voters to the fossil fuel interests, where they belong.”
Sure, a carbon tax.

Which will ultimately be paid for by the consumers, or, in other words, voters.

anon

9

Tim Worstall 09.07.19 at 10:49 am

@6. Politically feasible?

Sure. If we take the Stern tax rate ($80 a tonne CO2 -e) and emissions, something like 500 million tonnes, we get a tax of $40 billion a year. The UK is already paying green/environmental taxes of this amount. Not properly distributed but it’s already being paid.

In more detail, the “correct” carbon tax on a litre of petrol is some 11p. Since 1993 we’ve had the fuel duty escalator (brought in to “meet our Rio commitments” so pretty close to saying it’s a carbon tax) which has added some 25 p to a litre.

Seems like the level of taxation necessary is really pretty easy. Obviously, if someone starts talking about $1,000 a tonne then that’s more difficult. But then Hansen’s paper arguing for that level has rather a flaw in it.

But at the Stern level? How stupid/clever do we think the voters are? Here are all these Green plans and subsidies to windmills and the Swansea Barrage and all that. And here’s the carbon tax which will solve the same problem better and cheaper. Which do you want?

And then if you did it right by saying “We’re going to cut the tax on petrol by 14 p a litre and also make those farmers pay for their fertilizer emissions” we’d have something that could be sold quite easily as a political package.

The US might be a harder sell, true. But why not Mankiw’s 50 cents on a gallon to save Flipper?

10

Jonah Thomas 09.08.19 at 3:18 am

Carbon tax.

Suppose you live in a state where the dominant power company has invested massively in coal and natural gas power plants. They pass on the costs of the carbon tax to you. Your electric car pays the carbon tax.

What can you do about it? Mostly, you can move elsewhere as soon as you can find a job elsewhere. The power company doesn’t care. You have a big incentive to put up roof-top solar or something like that, unless you rent.

Meanwhile, let’s suppose that the government sets up a great big program to build and install solar panels that will provide cheap electricity. It makes sense for them to put the solar panels first in the places that get the most sunlight, where they provide the most power. It makes another kind of sense to put them as evenly as possible across the country. The first million each close to 300 citizens, the second million beside the first million, etc. Because otherwise you are paying your power company’s carbon tax, and the government is putting solar panels in place to pay *somebody else’s* power bills and carbon taxes.

Unless the government stays out of it and leaves it entirely to market forces to solve, carbon taxes turn into a political nightmare.

Carbon tax is a great idea if you believe in the free market to provide efficient solutions to economic problems.

11

Tim Worstall 09.09.19 at 9:34 am

“Carbon tax is a great idea if you believe in the free market to provide efficient solutions to economic problems.”

Rather a large part of the science of economics shows that – properly adjusted for externalities both positive and negative – markets do just that.

Seems like a plan therefore.

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