This is a solution, a simple solution...one that does not specify what or who or how or when to change; a solution that is more certain to work in the time we have available; a solution that makes any other look draconian by comparison; one that remains in place only as long as, and in proper proportion to, the problem it was created to solve. It is NOT a carbon tax, for there is no point at which it touches government's coffers (sorry, Congresspeople, your budget woes remain a separate concern). Yet this solution works very much like a carbon tax, slowly and predictably increasing a cost penalty associated with continually burning fossil fuels in the open atmosphere.
It's called a Carbon fee AND REBATE. It's been recommended to us in non-partisan manner by federal employee James E. Hansen, the United States' foremost climatologist concerned with finding effective solutions to global heating launched by the unbridled human use of fossil fuels. Again, it's not a tax, not collected by a taxing authority (except as a back-up safeguard to the collapse of self-regulation, I suppose). It's a transparently administered but entirely private fee AND rebate. And here is how is works.
The money is collected by several thousand entities in fossil fuels production business, directly at the sources of fossil-carbon-based fuel - at the domestic mine head, well shaft or international port of entry. All carbon-fee moneys collected are then distributed evenly and directly to all legal residents of the country that has enacted the program. Wiser ones will spend their share of the money on the most effective measures that lower their exposure to fossil fuels and to the damage that is arriving from their use. Less wise ones will continue to spend more and more of their income to support dangerous and outdated fossil fuel habits. No one will be told what to do and people's choices will remain fully private and personal responsibilities. Corporate "greenwashing" in such an environment goes away. The entire free market will quickly fill with heroes engaged in a rapid retirement of fossil fuel-burning in open atmosphere. And we'll all want to be one of them.
Once either America or China begins this practice, all other nations will be obliged either to follow suit or simultaneously provide their citizens public resources to mitigate and adapt to climate change while paying someone else ever higher costs for fossil fuel imports. No doubt, all nations will choose the easier path. They'll implement complimentary carbon fee and rebate programs rather than unilaterally face growing costs to access the American, Chinese and other marketplaces while climate change remains a public burden.
A carbon fee and rebate program can begin imperceptibly by automatically doubling the price of future fossil fuel cost increases. What? Double the INCREASE of fossil fuels' raw material costs? Yes, based on resource carbon content. Every time carbon-rated costs of raw materials engaged to produce fossil-carbon fuels increase by a penny, the carbon fee paid for these materials will increment a penny. By carbon rated, I mean that an increase in the cost of natural gas will contribute roughly half as much toward incremental carbon fees and rebates as an equal rise in the cost of coal, and petroleum increases would fall somewhere in between depending on the carbon richness of the specific resource mined. A price increase resulting from public policy changes would be treated the same as one for any other reason. Anger generated over higher fossil fuel prices will take aim against conventional and unconventional fossil fuel producers and users. It will not be distracted toward proxies such as government agencies, political parties or national, provincial and local governments.
Half of every price increase ever taken will count toward strengthening the increasing amount of money rebated directly to a participating nation's consumers. The rebate they pocket will include all carbon-fee funds collected during that period. Period. They will be split fairly, evenly, either directly per capita, or per household per capita up to the average number of offspring in that country so that no special interest can game the system. The richest people will become most aggressive in reducing their fossil carbon exposure. If ever market prices slag off, the carbon fee will remain standing, built into the price of fossil fuel products. Prices will continue to rise slowly, driven purely by market supply and demand. The amount of the slowly rising carbon fee can be accommodated by the market as easily as commodities futures are today, providing the predictability that the whole economy wants and needs. More and more of everything grown, made or used anywhere will limit and then end the use of polluting fossil hydrocarbons. Carbon fees of their own accord will provide a brake to fossil fuel price increases and speculation. At some point, an enlightened electorate will find that a carbon fee and rebate provides the average consumer much greater leverage than any Wall Street occupation ever did.
Eventually the carbon fee - and rebate - will reach the height where nearly all will have transitioned (primarily via conservation but also through other means of energy production) so that very little fossil fuel will be burned using air as a waste receptacle. The amount of fuel that is then still burned in the open atmosphere (such as for launching spacecraft, flying older aircraft, operating historic cars or older oceangoing ships) will pay for its own aerial carbon removal through technological means. Means to remove aerial carbon have been estimated in today's dollars at something around $200 per pound (for example, upwards of $50 per gallon of gasoline). The carbon fee will top out at the level required for technological removal, so there is an absolute cap on fossil-fuel carbon-price increases. If the cost of cleansing the air of excess carbon comes down over time, so too will the carbon fee (and rebate) until it finally disappears. How long will a carbon fee and rebate take to rev gasoline emissions from zero to $50 per gallon? That is entirely up to the world market for fossil fuels, which depends entirely on how well the entities engaged in or dependent on the fossil fuel business play their cards. Elegant, yes? Simple, yes? Supportive of innovation everywhere, certainly. Chances of success: better than 75% today but the figure has been decreasing slightly at least since 1988 with every day that we've waited for someone else to take action.
It's a better solution than any suggested to date. ...Better than a carbon "sin" tax, upon which governments would come to depend thus indirectly perpetuating the fossil fuel problem. ...Far better than a (Cap and Trade) fossil carbon market, which institutionalizes the very pollutant humans must eliminate as quickly as possible. There's simply no comparison with past methods such as regulated command and control, directly legislated solutions, too-slow consensus building, a rush to the bottom of bubbling state and local solutions, specifying sector by sector solutions, or artificially picking technological winners and losers. And we may yet avoid unforeseen consequences that will certainly arise with any scheme for Geo-engineering our way around unavoidable effects of global heating on this, the only known humanly habitable planet.
A carbon fee and rebate program optimizes virtuous market-based up-spiraling. Such a program voluntarily precipitated by the oil and gas industry would only be fair if applied to all fossil carbon resources slated for burning in air (and I'd be surprised if King Coal would stand up to volunteer since coal is the most carbon-intense fossil fuel and will either be retired first - or will find ways to beat oil and gas at their own game via safe carbon sequestration and long-term burial or solid-state stabilization). If the fossil fuel industry successfully self-regulates, then no special-purpose bureaucracy will need to be created. It's simply a steadily accruing market adjustment in fossil fuel pricing. It may seem hard to imagine right now but by imposing a carbon price the fossil carbon industry will have saved itself from extinction, too. Fossil coal, lignite, bitumen, petroleum and natural gas hydrocarbons are likely to become more rare, wondrous and useful to humanity in the same way that natural hardwoods already carry such greater value than as a common fuel or waste to be burned.
Even as we all try harder to distance ourselves from ever-increasing prices of fossil fuels, many people will find that their view of fossil industry brightens to one of benevolent provider of substantial cash bonuses, and benevolent leader now actively saving the global climate from destruction. This will certainly help build social permission for increasingly difficult and disagreeable mining activities seeking recovery of these universally valuable fossil hydrocarbon resources.
A carbon fee and rebate will change our world as easily and naturally as possible. The whole world will shift from one wrapped in dire clashes and crises fueled by fossil carbon. It will shift to a cleaner and healthier world more productive, certainly more optimistic and creative, in rapid transition to abundant and less harmful energy production available within humanity's earth- and solar-energy, current-account budgets. Because our sustainable earth- and solar-energy budgets, available in thermal, sunlight, wind, wave and tidal forces, are more freely available everywhere on earth, the competition to access them can become globally fierce but remain friendly. A race away from fossil fuels can confidently protect the world's poorest people from harm because of the knowledge that all human endeavors are becoming beneficial to life everywhere on the planet. The doomsayers, whom I while lacking societal solutions readily joined, will have lost again. I dare say, gladly. Restoration of earth ecosystems, species habitats, always-smarter forms of urbanization, safe closed-loop manufacturing processes, continuing scientific investigation, space and ocean exploration and exploitation could proceed alongside the provision of plenty enough for happiness among fourteen or fifteen billion people. Another, really any other, alternative path pales to this.
We can do this. Shall we demand of our industry a carbon fee and rebate instituted before global heating's inevitable natural feedback mechanisms override even our most humane desires? Houston, long ago we landed on the moon. Let's do this. Literally, the sooner the better.
