If you accept the conclusion that global warming is a slow-motion worldwide catastrophe, you'd probably like to do something. Yet there seem to be many obstacles in the way. Fossil fuels are cheaper than the alternatives, and the U.S. government subsidizes fossil fuel production, in tax law, in subsidies, and in wars. And Congress has flatly rejected the Kyoto Protocol. Is there something to be done that U.S. citizens would support, to the point of forcing the issue with politicians? Maybe. I'm suggesting a "carbon feebate". It works like this.
1. HIGH tax on carbon which can end up as CO2. Recommended tax: $76.50/barrel of oil. (see notes below). At $76.50/barrel, that's $1.58 more per gallon - if no carbon were expended in the refining process, that is. And no, the government doesn't get a free ride.
2. Proceeds equally distributed to all legal adult residents
3. All accounting open to the public.
4. Stiff penalties for cheating. (both in calculating carbon consumption, and in identification of adult legal residents)
This has some similarities to the Kyoto protocols, with the major difference being the isolation to the U.S., and the inclusion of citizens in the economic considerations. With Kyoto, it's hard to see how individuals benefit. With a feebate, citizens receive a benefit in cold hard cash. (OK, lukewarm floppy pieces of paper). People are also compensated for the damage done to the country - their property - by global warming. This strengthens the political impact of the program, and makes it more difficult for corporations, and government themselves, to propagandize against it.
What are the effects of such a program?
- High carbon users subsidize low carbon users.
- The plethora of programs nibbling away at the problem can largely be discarded. For example, CAFE standards and ethanol subsidies can be phased out.
- Implicit improvement in business case for solar, wind, geothermal, nuclear, etc.
- Illegal immigration is discouraged.
- Population growth is discouraged.
- Government intrudes more on the lives of citizens, if only because it's to your financial benefit to make sure the federal government knows where you are.
What about import and export? If products produced in the U.S. are charged a fee, then products will be too expensive to sell anywhere else. If products produced elsewhere are assessed the fee, what is to be done with it? What would be a reasonable way to deal with production, one that discourages carbon without destroying the U.S. import/export economy? Some recommendations:
1. Calculate average U.S. carbon usage for the production of all products (import and export). Not easy, I know. A shot in the dark for some, maybe, but I don't think this is nearly as convoluted as the IRS code.
2. For each product imported or exported, calculate the carbon feebate cost based on average amount of carbon used to produce it.
3. For each product exported, provide compensation to the exporter. For this to reasonably work, the assessment must be completely open, and all businesses in the supply chain must be allowed to reconfigure contracts to receive a portion of the compensation.
4. For each product imported, charge the fee based on average carbon required to produce it. Then add carbon costs for international transportation.
5. Spending for compensation should not exceed total income from import fees.
6. Excess income from fees should be added to the citizen pool.
What are some implications? Keep in mind that this feebate is not just for oil. It's not even just for fossil fuels. Yes, coal and natural gas introduce more carbon into the environment, but so does the destruction of natural ecosystems. Burning a forest to clear land for crops is a consumption of carbon, just as much as burning coal in a power plant. So is the logging of old-growth forests.
Biofuels can also be problematical. In the U.S., with its petroleum-dependent agriculture, ethanol could end up with large carbon costs. (According to http://petroleum.berkeley.edu/... it already does).
Hydropower, while not using carbon to operate, generally involves some carbon cost in itself. Ecosystems are destroyed when areas are flooded, and the carbon in those systems gets released into the atmosphere. Yet this would probably be a minor cost, compared to the carbon released in burning of fossil fuels.
How does this affect people's daily lives? The most obvious is in automotive travel. If you choose to drive a gas-hog, you pay more. If you have a long solitary commute, you pay more. If you drive your children to ballet practice and soccer games, you pay more. If your school district buses children to achieve racial balance, you pay more. On the other hand, if you walk or bike to work, if your childrens' school is nearby, if you consolidate shopping trips, if you carpool, you pay less.
But the impact is much more widespread. If your electricity comes from nuclear, you're affected less. Food grown the "old-fashioned way", without the use of petrochemical fertilizers and pesticides, will not go up in price as much as food grown on the oil-driven farms. Plastic, and the billion things made from it, become more expensive.
Everything that consumes carbon becomes more expensive. Everything. But you get compensated based on average usage, so you'll come out ahead if you use less than the average.
So let's start a new kind of "race to the bottom".
NOTES
Detail recommendations
Implement in stages, to give the economy some time to adjust. Say, add ¼ of the total each six months, so the full charge is in place in two years.
Since the Kyoto Protocol requires a reduction of greenhouse gases to 5% below 1990 levels, keep raising the feebate until the usage drops to that level.
send feebate checks out to the population monthly.
Put real scientists and accountants on a panel for managing the fee assessments.
Establish a regulatory agency for managing the program. Hold a federally financed national election for its head.
Provide expedited mechanisms for disputes.
Carbon calculations
From http://www.processassociates.com/... 1 barrel crude =~ 300 lbs. From various other sites, it appears that both crude oil and gasoline consist of about 85% carbon.
So, one barrel translates to 300 lbs * 85% = 255 lbs carbon per barrel. $75 per barrel / 255 lbs per barrel = $.294/lb of carbon (or 25 cents per lb of crude). Might as well make it a simple, easily-remembered number
30 cents/lb on carbon consumption.
Then it becomes 76.50/barrel. (Actually, $76.53, but that's really getting carried away).
1 US gallon weighs 6.2 lbs. So, 6.2 lbs * 85% * $.30 = $1.58 per gallon of gasoline.
Coal? The carbon content spans a wide range, between 25% and 98%, with most of the U.S. coal being between 45-86%. So, the feebate on coal could be between $150/ton and almost $600/ton.
P.S. Al Gore has been a strong proponent of a carbon tax, and I heard the made-up word "feebate" from Hilary Clinton. So sue me.