For decades, even centuries, humanity will be dealing with complex climate-change impacts, yet we lack essential democratic assets to meet the challenges. Policymakers must take great care to choose paths that build our democratic-governance muscle—the decision-making structures, policies, citizen practices, and public trust we need to avert the worst impacts and to deal creatively with those now unavoidable. Any proposal on the table needs to ask three questions:
Does it move the country toward accountable democracy, or does it reinforce distrust?
Diverting all carbon-permit revenue to individuals, based on the assumption that government would misdirect revenue to those with political clout, signifies a resignation to a “privately held government.” If citizens everywhere are serious about climate change, they must see accountable democracy as an urgent environmental goal. For example, without it, $300 billion in annual global energy subsidies will continue mostly to promote planet-heating fuels. Canceling them could alone cut greenhouse gas emissions by as much as 6 percent annually.1 Regardless of one’s particular environmental passion, each can weigh in on the mother-of-all-environmental issues: wresting government from control by private interests so that people can trust it. Such change may come via bipartisan Fair Elections Now legislation in the U.S. Congress to help remove corporate influence. As Al Gore notes, “in order to solve the environmental crisis we’ve got to solve the democracy crisis.”
As citizens keep their eyes on the prize of accountable democracy, they can take heart in knowing that, with the right pressure on them, even our compromised governments can serve as essential tools for the common good. Note that 11 U.S. states are already “cleaner”—emissions-wise—than Germany, an environmental leader. California, one of the world’s largest economies and under Republican governors for two-thirds of the period since 1943, has achieved its goal of 24 percent of electrical power from renewable resources in only a few decades.2 Or, consider the impact of government action abroad. In Denmark, CO2 emissions fell nearly 15 percent between 1990 and 2005, in part via energy taxes; 40 percent of these taxes were “recycled” to industry, earmarked for environmental innovation.3
The proposed distribution of all carbon income to individuals would leave no share for such ends; however, the Center for Budget and Policy Priorities estimates that about 60 percent of carbon-allowance income would be adequate to protect vulnerable citizens via rebates. That would leave the public roughly 40% of the income from carbon permits to invest in a speedier energy transition.4
The proposed special trust to oversee and disperse carbon income may be just what is needed, but lessons from the financial meltdown should make us wary of anything modeled on the Federal Reserve. In contrast to this centralized approach, why not build in a role for citizen juries and assemblies and direct civic consultations in guiding such a new entity?
Does it reinforce appreciation of the commons and deepen the sense of stewardship for the planet’s well-being?
In the early stages of a cap-and-dividend plan, as caps descend and carbon income rises, individuals’ pecuniary interests align with the goal of lowering carbon. As companies convert to green technology and suppliers need fewer permits, would the government face the danger of dividend recipients seeking ways to continue the source of their income through carbon emissions? Consider Alaska. Some accustomed to the Alaska Permanent Fund, likened to cap-and-dividend, now seem to see “their” oil as an ongoing entitlement. They call it “permanent,” after all. So why not squeeze out every last drop, regardless of the harm? Imagine the conflicting desires felt if, for example, each person received income from government permits to use national parks.
The danger lies in conditioning citizens to perceive the commons—air, in this case—as a source of personal wealth rather than a treasure held in common. By contrast, the Center for Budget and Policy Priorities’ proposal to use need-linked energy rebates to cover rising energy prices appears to avoid this danger.
So how do people align personal interests with Earth’s? Costa Rica uses the revenue from energy taxes in part to reward commons’ care, like villagers protecting forests and watersheds. Germany guarantees householders and utilities a high enough price for renewable energy to allow quick recovery of installation costs. The price is assured for 20 years, and costs are spread across all ratepayers so they come to a few dollars a month. This simple tool has already spread to more than 64 countries, states, provinces, and municipalities.5 In Gainesville, Florida, a recent convert, households pay about 13 cents a kilowatt hour for electricity, but the publicly-owned utility will now pay them 32 cents a kilowatt hour for solar-generated electricity for 20 years. In these approaches citizens are actively contributing to solutions.
Does it have a chance of being enacted soon?
Before adopting a risky path, let citizens work with all their strength for policies that build the basis for public trust and actively engage them in protecting the commons. Humans love to feel summoned to historic challenges: from World War II rationing to cutting the poverty rate by half during the 1960s to Civil Rights breakthroughs, Americans have stepped up. Now, facing vastly more complex challenges, we need to go for what we really want—a democracy that calls forth the best in us.
- Morgan, T. Reforming Energy Subsidies: Opportunities to Contribute to the Climate Change Agenda. UNEP's Division of Technology, Industry and Economics. http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=543&ArticleID=5902
- Theil, S. The Greenest Nation, A Laggard No Longer, America Could Soon Out-innovate Europe and Japan. Newsweek, March 2, 2009. http://www.newsweek.com/id/185812
- Prasad, M. Taxation as a Regulatory Tool: Lessons from Environmental Taxes in Europe. 10-11. (2008). http://www.sociology.northwestern.edu/faculty/prasad/Taxation_3_25_08
- Stone, C. & Shaw, H. Extending “Climate Rebates” to Include Middle-Income Consumers. Center for Budget and Policy Priorities, Washington, D.C. (2009).
- Mendonca, M. Powering the Green Economy: The Feed-in Tariff Handbook. Earthscan (2009).