The Case for Carbon Dividends

James K. Boyce

• Publisher: Polity
• Year: 2019
• Print ISBN: 9781509526550, 9781509526543
• eBook ISBN: 9781509526581
• Edition: 1
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

The supreme challenge of our time is tackling climate change. We urgently need to curtail our use of fossil fuels – but how can we do so in a just and feasible way?

In this compelling book, leading economist James Boyce shows that the key to solving this conundrum is to put a limit on carbon emissions, thereby raising the price of fossil fuels and generating strong incentives for clean energy. But there is a formidable hurdle: how do we secure broad public support for a policy that increases fuel costs for consumers? Boyce powerfully argues that carbon pricing can be made just and politically durable only if linked to returning the revenue to the public as carbon dividends. Founded on the principle that the gifts of nature belong to us all, not to corporations or governments, this bold reform could spark a twenty-first-century clean energy revolution.

Essential reading for all concerned citizens, policy-makers, and students of public policy and environmental economics, this book will be a transformative contribution to one of the most important policy debates of our era.

1
Why Cut Carbon?

The case for a transition to a clean energy future, leaving behind the fossil fuels that powered the world economy from the time of the industrial revolution, above all rests on our duty to safeguard the Earth for future generations. The prevention of “dangerous anthropogenic interference in the climate system,” as this goal is inscribed in international law by the United Nations Framework Convention on Climate Change, will require dramatic cuts in carbon dioxide emissions from fossil fuels.

There are three other compelling reasons for us to relegate fossil fuels to history’s dustbin. First, air pollution from fossil-fuel combustion leads to millions of premature deaths across the world every year. This alone is enough reason to abandon their use as quickly as we can. Second, investment in energy efficiency and renewable energy technologies can play a key role in the twenty-first-century economy, creating new jobs and new prosperity. Finally, if we introduce carbon dividends as an integral part of the clean energy policy mix, we will give practical expression to the ethical principle that the gifts of nature belong to everyone in equal and common measure.

What science tells us about climate change

Fifty million years ago, the Earth was much hotter than it is today. Crocodiles lived at the North Pole. Ferns grew in Antarctica. Carbon dioxide (CO₂) spewed into the atmosphere by volcanic eruptions blanketed the planet, trapping the sun’s heat and pushing polar temperatures close to what we now consider tropical and sub-tropical climates.¹ In the eons since then, plants pulled CO₂ out of the atmosphere, sequestering vast amounts of carbon under the Earth’s surface in the form of fossil fuels, and the planet cooled.

Today we are pumping this CO₂ back into the atmosphere at a rate of more than 1,000 tons per second. The climate is gradually warming as a result, and unless we change course soon the warming will not only continue but accelerate. There is a long way to go before we would return to the hothouse planet of 50 million years ago. But scientists forecast that we are on track to see an increase in average temperatures of 3.5°C or more above the pre-industrial level by the end of the present century. The last time the Earth was that hot was in the mid-Pliocene epoch, about 3 million years ago.²

Such a scenario would have profoundly unpleasant consequences for humans and other living things. Among others, rising sea levels resulting from the melting of ice sheets and the thermal expansion of the water in the oceans will affect coastal cities worldwide.³ The frequency and intensity of extreme weather events, including hurricanes and heatwaves, will increase. Ocean acidification, resulting from about a quarter of the CO₂ we emit into the atmosphere being absorbed by seawater, will kill coral reefs and have devastating effects on marine ecosystems.⁴ These outcomes are predictable, but they are not inevitable.

The impact of putting vast quantities of fossil carbon back into the atmosphere is often called “global warming.” While this is accurate as a description of the average impact on surface temperatures worldwide, it is misleading as a description of impacts in all times and places. In some places, including the east coast of the United States, where I live, we can expect to see increases in the frequency and intensity of extreme winter storms.⁵ Some prefer to use the term “climate change” for this reason. Although this, too, is an accurate description, it is open to the objection that the Earth’s climate has always been changing. What is distinctive about the current situation is the extraordinary speed at which we are changing the climate.⁶ A better label for what’s happening is “climate disruption.” (In this book I use this interchangeably with the more popular term, “climate change.”)

Of course, predictions about the future are always subject to some degree of uncertainty. We do not know exactly how much CO₂ or other greenhouse gases we will emit in coming years. We do not know exactly how much temperatures will change as a result of a given quantity of emissions or exactly what impacts these changes will have on human societies and nature’s ecosystems. What we do know, however, is that, unless we move quickly to curb emissions, we – and, even more so, our children and grandchildren – are going to be in for some very nasty experiences.

The good news is that we can act now to avert the worst outcomes. The bad news is that we aren’t acting fast enough.

Drawing by Arpita Biswas

Responses to climate disruption

Reactions to the threat posed by climate disruption have varied widely. At one end of the spectrum we find outright denial, a stance encapsulated in a tweet by US President Donald Trump claiming that global warming is “bullshit.”⁷ At the other end we find fears of the end of the world, exemplified in the dire warning by the late cosmologist Stephen Hawking that humans have only a hundred years to move to a new planet.⁸

These opposing reactions are founded on radically divergent understandings of the relationship between humans and nature. Since ancient times some people have seen nature as a stage to be dominated by man (gender-neutral language is not necessary here), transformed according to his desires and will. Others have held that there is an intrinsic “balance of nature” that we can alter only at our peril.

Between complete denial and complete despair, and between hubris and stasis, there is a large middle ground where more realistic appraisals of climate change and the relationship between human activities and the natural world can be found. One can acknowledge the ever-present reality of ecological change without concluding that this means anything goes. And one need not be a doomsayer to conclude that we must move quickly to build a clean energy economy.

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Table of contents

• Cover
• Front Matter
• Introduction
• 1 Why Cut Carbon?
• 2 Why a Price on Carbon?
• 3 What is Carbon Rent?
• 4 The Carbon Dividend
• Frequently Asked Questions
• Acknowledgements
• Further Reading
• End User License Agreement