From a Washington Post editorial, Take Mr. Obama’s Oil Fee Proposal Seriously, Feb. 7.
Last modified: February 8, 2016
“Climate change just keeps getting scarier,” Paul Krugman rightly pointed out in his biweekly New York Times column yesterday. But fear not, he instructs. A “renewable-energy revolution” is brewing in America — one that won’t require threading a carbon tax through the climate-denying GOP Congressional majority.
This “remarkable technological progress in renewable energy,” which Krugman partly credits to Obama administration stimulus and tax breaks that helped wind and solar scale up and drive down costs, has “put the cost of renewable energy into a range where it’s competitive with fossil fuels.” The U.S. will soon be “leading the world” down the low-carbon path, promises Krugman, so long as the presidency, and Obama’s Clean Power Plan, stay out of Republican clutches.
Leaving aside the fact that the global renewables revolution already has a leader (hint: it’s Europe’s largest economy), there are many reasons to question Krugman’s implicit suggestion that the U.S. and the world can banish carbon fuels fast enough to avert catastrophic climate change without a serious carbon tax in the policy mix. Here are a few:
Demand matters (not just supply) — A renewables-only revolution leaves intact the demand side of the carbon equation. Yet human appetites for energy have proven so boundless that, absent robust prices on carbon emissions, energy demand will invariably outrun the output of even optimized solar and wind power systems — at least during the 50-year time horizon in which our climate fate will be decided.
There’s a new climate villain: cheap oil — With gasoline again going for two bucks a gallon, driving is up and fuel economy is down. Even the Obama administration’s vaunted CAFE standards can’t hold back such powerful price signals. Last year’s bump in U.S. cars’ and trucks’ emissions — the CO2 equivalent of nine good-size coal-fired power plants — will be just the beginning, unless we raise fuel taxes.
Scaling up wind and solar isn’t child’s play — To underscore the first point, take a look at the 100%-renewables plan drawn up for New York State (where both Krugman and I happen to live) by a crack team of physicists and engineers from Stanford. Their zero-carbon and zero-nuclear plan requires 17,000 giant offshore and land-based wind turbines to power just half of the state’s transportation, heating, industry and electricity. (The other half of the energy would come from masses of rooftop solar cells, solar PV and thermal plants, plus existing hydro dams.) Cutting that very tall order down to manageable size cries out for a carbon tax.
Tax breaks cost money — Fiscal-scolding isn’t our thing, but someone must pay for Krugman’s touted solar investment tax credits and wind production tax credits — not to mention ethanol mandates. Moreover, energy subsidies are notoriously hard to dislodge (notwithstanding Sen. Ted Cruz’s victory in yesterday’s Iowa Republican caucuses despite his attacks on ethanol subsidies). And it isn’t necessarily the wealthy who foot the bill, as we showed two years ago in our paper comparing carbon taxes with clean-energy subsidies.
We get that Krugman, an implacable foe of Republican know-nothingism since at least the 2000 elections, thinks it’s essential to keep a Democrat in the White House this November. We also appreciate his “tipping point” argument that “Once renewable energy becomes an obvious success and, yes, a powerful interest group, anti-environmentalism will start to lose its political grip.” And we don’t necessarily insist that every climate commentary begin and end with carbon taxes.
But Krugman, a Nobel laureate in economics, surely knows that in the race to eliminate fossil fuels, raising their prices will go much further than making renewables cheap. We hope his columns will again make this clear, soon.
Last modified: February 3, 2016
On Feb. 8, 2016, shortly after we put up this post, the International Civil Aviation Organization, the United Nations’ aviation agency, announced an agreement with the global aviation industry to impose binding limits on CO2 emissions for all new airplanes delivered after 2028. The New York Times reported on this development here. — Editor.
Shipping and aviation combined account for only an estimated five percent of global CO2 pollution. But some experts project this share doubling or even tripling as globalization accelerates. How can those emissions be reduced, and would a carbon tax help?
Shipping, which is believed responsible for 3% of world CO2, is already the most energy-efficient large-scale way to move cargo, pound for pound and mile for mile. Moreover, shipping fuel costs already comprise about half of operating costs, and efficiency standards for new large ships took effect last year. How would a carbon tax on maritime fuel (primarily residual fuel oil, a/k/a bunker fuel) spur further efficiency and innovation? Air carriers also have incentive to conserve fuel since it accounts for about one-third of ticket prices. How would a carbon tax on aviation fuel lead to reduced emissions in that sector?
The simplest and most immediate way to improve ships’ efficiency is to slow down. “Slow steaming” — reducing speed by at least several nautical miles per hour — can slash fuel consumption and thus CO2 emissions. Efficiency can also be raised through advanced engine design and by reducing drag by polishing propellers, coating hulls with algae-inhibiting paint, reshaping bows and adding fins or ducts to propellers. One promising new device called “Silverstream” cuts water friction by laying a carpet of tiny bubbles along the hull so it rides mostly on air.
Then there’s fuel choice. The single largest force in reducing U.S. CO2 emissions in recent years has been displacing electricity generators powered by dirty, high-carbon coal, with lower-Btu and lower-CO2 combined cycle plants burning natural gas. Similarly, new ships fueled by liquefied natural gas (LNG) are beginning to replace freighters and tankers powered by dirty tarlike bunker fuels, reducing CO2 emissions by 15-20%. The climate downside to this trend is methane “slip” — emissions of unburned methane, a far more potent greenhouse gas than CO2 (per pound), a problem that marine engine manufacturers are beginning to tackle.
Perhaps the biggest pathway through which carbon taxes could cut greenhouse gas emissions from shipping would be by altering the cost equation between distant imports that must be transported thousands of miles, and domestically produced goods. The resultant reduced demand for shipping would translate not only to less CO2 (and methane) but less air and water pollution, fewer megaports and, perhaps most importantly, retention or creation of domestic manufacturing jobs. The potential job-producing impacts of a carbon tax covering shipping should interest those building “blue-green” alliances and clearly deserves further study.
A month after his article on shipping innovations, Times reporter Fountain tackled aviation, reporting on innovative aircraft designs, new lighter materials and more efficient air traffic practices. Composite materials, which now comprise about half of the airframe of the new Boeing 787, have made new planes much lighter. More efficient jet engines are being installed on existing aircraft. And operational measures like altering flight paths to glide downward and better management of air traffic, both at airports and in the air, can further reduce emissions.
There’s more. New flexible aircraft wings are being tested to reduce drag. “Distributed propulsion” — locating an array of electric motors at the leading edge of aircraft wings for takeoff and landing, while using jet-fueled engines at the wingtips for cruising – is reportedly showing promise to reduce fuel consumption and resultant CO2 emissions. Of course, research and adoption of innovations like these depend heavily on rising fuel prices, which makes the 2015 price plunge so concerning.
In addition to driving new technology, a carbon tax would soften demand for air travel. The pull of a carbon tax would add impetus for more and better ground transportation alternatives, particularly high-speed inter-city and regional rail services to supplant short-hop flights. Technology such as video-conferencing can curb travel needs while saving time and money for businesses and individuals; a carbon tax would encourage such behavior to become our cultural norm. And even absent direct substitutes, costlier air travel would lose market share to other discretionary activities, almost all of which would be less carbon-intensive.
We return to the questions posed earlier: with fuel costs already their single largest expense, why should fuel price increases spur changes in shipping and aviation designs, equipment and practices?
For one thing, whereas unrelenting fuel price volatility undermines incentives to conserve and innovate, a predictably-rising carbon tax would be more likely to ensure that investments in nascent shipping and aviation technologies actually pay off. The best ideas will move off the drawing boards and into practice faster and more widely.
More broadly, a carbon tax would not just move shipping and aviation down the fossil fuel demand curve; it would create a new, lower demand curve by boosting every substitute for, and every alternative to, high-carbon activity. In layman’s terms, a global, economy-wide, briskly-rising carbon tax would induce a culture change.
The need for a broad, all-inclusive price signal raises another key point. Not only was the December Paris climate accord mute about the best economic tool to achieve emission targets; the agreement left out international shipping and aviation altogether.
Climate activists are urging a carbon tax on shipping and aviation not only to spur reductions in climate pollution but as a revenue source to finance global climate mitigation. A new report from the International Monetary Fund suggests that a carbon tax of $30/ton of CO2 on offshore maritime and aviation emissions alone could generate $25 billion of revenue a year, while noting that national governments may have only weak claims to that revenue. Dedicating it to global climate finance might help resolve a thorny issue in climate negotiations while closing a gap in the Paris framework.
Photos: Flickr, New York Times
Last modified: February 9, 2016
Clifford Krauss and Diane Cardwell have a front-page story in today’s New York Times about the challenge that cheap oil poses to the Paris climate agreement. The way that governments respond could make or break the agreement, they say, with huge ramifications for the global fight to stop climate change:
For the climate accord to work, governments must resist the lure of cheap fossil fuels in favor of policies that encourage and, in many cases, require the use of zero-carbon energy sources. But those policies can be expensive and politically unpopular, especially as traditional fuels become ever more affordable.
“This will be a litmus test for the governments — whether or not they are serious about what they have done in Paris,” said Fatih Birol, executive director of the International Energy Agency.
The Carbon Tax Center has repeatedly highlighted this challenge over the past twelve months, particularly in economic terms. Cheap oil has meant cheap gas, which has encouraged more driving and a reversion to gas guzzlers. We calculated last month that increased gasoline consumption in the U.S. alone in 2015 produced carbon emissions equivalent to a year’s worth of emissions from nine coal-fired power plants. That’s equivalent to the entire annual emissions from burning all fossil fuels for all purposes in Denmark or Ireland.
We concluded that cheap oil risks making a “mockery of just about every scenario to move the U.S. and other countries decisively off carbon fuels.” But that’s not the end of the story. Cheap oil paradoxically presents an historic opportunity to pivot away from oil — and all fossil fuels — for good.
As we wrote last January, cheap oil brings a host of positives, like more jobs in most economic sectors, and negatives, like increased fuel use. The trick is how to safeguard the positives while neutralizing the downside. From a policy perspective, this actually isn’t hard to do, and oil’s low price makes it that much easier (as well as more imperative). The real question is whether we have the political will to do so.
The policy solution is a revenue-neutral carbon tax, beginning with a refundable tax on oil. The government would collect the tax at ports and wellheads and distribute the revenues equally to households each month, just like in Alaska. Because tax dollars stay in circulation, the amount of money families have to spend doesn’t fall and the economy benefits. Most families of limited means will come out ahead because on average they spend fewer dollars on oil than they will receive in their monthly revenue check.
By simulating higher fuel prices, we can preserve incentives to get more fuel-efficient. As a result, motorists will buy higher-mileage cars and drive them somewhat less, manufacturers will build more-efficient vehicles and aircraft, and cities and counties will be less inclined to dial back public transit. The same goes for freight movement — goods produced nearby will be advantaged, boosting local agriculture and domestic jobs. You can read more about our proposed oil tax here.
As we and others, including former Treasury Secretary Lawrence Summers, have argued over the past year, the current cheap oil environment is ideally suited for the implementation of a carbon tax. The question remains: do we seize the moment to lock in the good while neutralizing the bad? Or do we instead continue fighting climate change with one arm tied behind our backs?
Last modified: January 26, 2016
Gavin A. Schmidt, head of NASA’s climate-science unit (the Goddard Institute for Space Studies), in 2015 Was Hottest Year in Historical Record, Scientists Say, NY Times, Jan. 21.
Last modified: January 22, 2016
Even for folks hardened by decades in the trenches fighting climate change, the release yesterday of 2015 planetary temperature data was still shocking. The “global land and water temperature” didn’t just set another record last year, it changed the rate at which those records are being set.
This morning we downloaded the official NOAA/NCDC global temperature dataset of temperature anomalies — that’s each year’s deviation from the trend increase averaged across the 20th Century. Here’s what we saw when we ran the stats:
- The 2015 anomaly was 0.90 degrees Celsius (1.6 degrees Fahrenheit; except for graph excerpt at right, all figures here are Celsius); in other words, last year’s global average temperature was almost a full degree above the 20th Century average.
- The 2015 temperature anomaly was 0.16 degrees greater than the anomaly for 2014, making last year’s increase the biggest since 1997 — even though the 2014 anomaly had just set a new record.
- The trendline we drew through 1975-2015 temperature data has a nearly 4 percent steeper slope than our year-earlier trendline for 1975-2014 data. Adding 2015 data in effect lifts the prior trend from its moorings, like an earthquake, tilting it upward.
Here’s how climate scientist Michael Mann characterized the new data, as reported by the New York Times:
Michael E. Mann, a climate scientist at Pennsylvania State University, calculated that if the global climate were not warming, the odds of setting two back-to-back record years would be remote, about one chance in every 1,500 pairs of years. Given the reality that the planet is warming, the odds become far higher, about one chance in 10, according to Dr. Mann’s calculations.
(The entire Times article, which led the paper’s Jan. 21 print edition and was written by the paper’s superb climate reporter, Justin Gillis, is well worth reading.)
Here’s one more way of grasping how the rate of temperature rise is accelerating:
The trendline running through the entire 1880-2015 NOAA/NCDC dataset yields an average rate of temperature rise of 0.0668 degrees per decade; it’s probably easier to multiply that by 10 to derive a per-century rise of two-thirds of one degree. However, a trendline on just the most recent 40 years, 1975-2015, gives an average rise of 0.1664 degrees per decade, or one-and-two-thirds of one degree per century. Over the past 40 years, temperatures have risen 2.5 times as fast as they have over the entire 135-year record.
(NB: Our 1880-2015 slope matches the slope reported by NOAA/NCDC. Our choice of 1975 as the start year for our recent trendline has no particular significance; a regression on 1995-2015 yields a similar slope. For those interested in methodological issues in temperature measuring, the Niskanen Institute posted a useful primer earlier this week.)
In his State of the Union Address last week, President Obama sent a message to senators and representatives on the GOP side of the aisle:
[I]f anybody still wants to dispute the science around climate change, have at it. You will be pretty lonely, because you’ll be debating our military, most of America’s business leaders, the majority of the American people, almost the entire scientific community, and 200 nations around the world who agree it’s a problem and intend to solve it.
It’s hard to discern the extent to which the denialism running through the Republican Party is driven by ideology or by politics, especially since the two are strongly intertwined. At some point, reality will come into play. Temperature data can help that happen. So can election returns.
Last modified: January 22, 2016
On December 30, a crowd of climate activists trooped to the office of Washington’s Secretary of State in Olympia, hauling boxes of signatures with a message from hundreds of thousands of Washingtonians: We want Washington to enact a carbon tax and make our state a U.S. leader on climate action. By filing the signatures before the year-end deadline, the group ensured that Washington must consider a carbon tax, either by a vote of the legislature or as a ballot measure in November.
We first reported on Carbon Washington’s I-732 initiative last June, when the grassroots group had collected 50,000 signatures. Since then their campaign grew exponentially, gathering a total of 362,000 signatures and gaining prominent endorsements both locally and nationally.
The signature total far surpassed the 246,372 valid signatures required to advance the initiative to the legislature. In fact, it puts I-732 in Washington State’s all-time top 10 by most signatures collected. This is especially impressive given that Carbon Washington relied on volunteer labor and grassroots donations, disproving skeptics who said collecting the necessary signatures was impossible without at least $1 million to hire paid petitioners.
Now Washington’s divided state legislature will consider the measure — the 2016 session runs from January to March. I-732 was designed to meet fiscal conservatives halfway; it is revenue-neutral, pledging carbon tax revenues to reduce the state sales tax. But while the measure has been endorsed by some prominent Republicans, including Harvard economics professor (and former Romney advisor) Greg Mankiw, it has yet to win support from Republican legislators.
If the legislature doesn’t enact I-732, the measure will appear on the ballot in November, alongside what will almost certainly be a hotly contested presidential election. Advocates hope this will lead to higher voter turnout, especially among younger voters, which might boost the measure’s chance to pass.
Last modified: January 19, 2016
As 2016 dawns, carbon taxing has become more than just the preferred climate policy of economists. It’s taking center stage in policy discussions and climate organizing in the U.S. and around the world. The Carbon Tax Center is helping to spur that process. Here is a summary of major carbon tax developments over the past year, including the Paris climate summit and Pope Francis’s elevation of climate in his June encyclical and his September visit to the U.S.
The Paris Climate Summit Advances the Climate Cause
CTC drafted, convened, and on the eve of the Paris climate summit unveiled a “luminaries’ letter” calling on the Paris negotiators to prioritize carbon taxes, both for their own value as the most potent national-level climate policy and as a path to a harmonized global carbon price. The 32 hand-picked signatories comprise a virtual “who’s who” of leading climate economists and other “wise men” (and women) including four Nobel laureates, three former U.S. cabinet secretaries, and prominent academics from Harvard, Princeton, Stanford and the University of Chicago. The roster was bipartisan as well, topped by a Reagan secretary of state and a top Romney advisor, among others. Our outreach to the media led to extensive coverage.
Pope Francis Lends his Authority to the Carbon Tax
The pope’s June encyclical didn’t just decry climate change and call on humanity to address it, it also insisted that polluters bear the costs they impose. The encyclical engendered surprising pushback from a few prominent climate economists and journalists who misinterpreted Francis’s injunctions against carbon trading and offsets. We set the record straight — Francis is calling for polluters to pay, and he’s not interested in gimmicks that hide the price or unfairly shift the burden — and he amplified that message when he addressed Congress in September.
Public Support Grows for a Carbon Tax
CTC broke the story in April that a prominent national poll showed 2/3 support among Americans for a revenue-neutral carbon tax — a result that was buried in the data and hadn’t been reported.This and other polling in 2015 revealed that the idea of taxing carbon pollution and distributing the revenues fairly is gaining public acceptability.
British Columbia, a Carbon Tax Trendsetter
Last month we published the first report quantifying the efficacy of British Columbia’s “textbook design” carbon tax. Using official data, we concluded that BC’s carbon tax has provided the impetus for the province to reduce its emissions 3.5 times as fast as the rest of Canada, without slowing economic growth. But we noted pointedly that the recent upward creep in emissions demonstrates the limits to the province’s modest tax rate and, hence, the need to resume raising the tax rate annually. The Vancouver Sun’s report on our analysis called the BC carbon tax “a model for Americans and the world.”
New York Times Strongly (and Finally!) Endorses a Carbon Tax
The New York Times’s post-Paris editorial urged nations to “embrace carbon taxes” — the second explicit mention of carbon taxing in a Times editorial. The first mention came in June when the paper issued a rousing endorsement of carbon taxes as “one of the best policies available” to fight climate change.
Carbon Tax Legislation Gets Ready for Prime Time
Five carbon tax bills embodying that approach were introduced in the House and Senate last year — including one by presidential candidate Sen. Bernie Sanders. In our view, they constitute a quantum leap in effectiveness, transparency and fairness vis-à-vis climate legislation under discussion only half a dozen years ago. We’re fairly certain our efforts both behind the scenes and in the public sphere, including running carbon tax scenarios for Hill staff, have contributed to this marked evolution. While none of the bills have a chance of passage in 2016 in the face of GOP denialism, they are a signifier of progress and a base to build on.
Carbon Taxes Advance in the States
We’re not betting on enactment of a federal carbon tax by this Congress, but we are encouraged by grassroots activism at the state level that may provide both a policy and political template that could eventually be emulated at the national level. In particular, we’ve supported the grassroots effort underway to enact a carbon tax in Washington State, either through legislative action or a referendum in November 2016.
Out with the Old Leaders, in with the New
The electoral defeat of Canadian Premier Stephen Harper and ousting of Australian Prime Minister Tony Abbott are strong signals of public dissatisfaction with anti-climate policies. The election of Justin Trudeau as Prime Minister and Rachel Notley as premier of Alberta hold out the possibility of a national carbon tax in Canada that could serve as a model around the globe. Meanwhile, new IPCC chair Hoesung Lee has joined IMF head Christine Lagarde in strongly endorsing carbon taxes.
Cheap Oil Emerges as a Climate Villain
We worked hard in 2015 to highlight cheap oil as the “new climate villain” for engendering more driving and a reversion to gas-guzzlers — a trend that is poised to grow much worse. Unlike other commentators, we quantified this negative trend, not just in terms of CO2 emissions but, more viscerally, as equivalent to firing up nine coal-fired power plants last year alone.
President Obama Calls for Putting a Price on Carbon
In concluding his press conference at the Paris conference, President Obama argued for pricing carbon emissions in the strongest and clearest terms used by any president to date. Perhaps the question that provoked the president’s remarks was prompted by our pro-carbon tax letter released and widely reported two days earlier. Obama said: “I have long believed that the most elegant way to drive innovation and to reduce carbon emissions is to put a price on it. This is a classic market failure. If you open up an Econ101 textbook, it will say the market is very good about determining prices and allocating capital towards its most productive use — except there are certain externalities, there are certain things that the market just doesn’t count, it doesn’t price, at least not on its own.”
Looking back at last year has us excited about what’s to come in 2016. The Carbon Tax Center has been at the forefront of pursuing national carbon taxes that are proven to reduce carbon emissions. We intend to aggressively build on the positive developments of 2015 and make 2016 a banner year in the fight against climate change.
Last modified: January 24, 2016
Last modified: January 7, 2016
Dozens of armed ultra-right ranchers seize a federal wildlife refuge in eastern Oregon and proclaim it “a base place for patriots from all over the country.” On the other side of the globe, Saudi Arabia goes on a rampage, subjecting neighboring Yemen to nightly bombing raids and then executing a revered Shi’ite leader named Nimr al-Nimr, prompting a furious reaction in Iran and bringing the Persian Gulf to the brink of war.
Given the immense distance separating such events, there couldn’t possibly be a connection between them — could there?
Actually, there is, and it starts with the conservative complaint about the infantilizing effects of welfare. This is the old right-wing argument that instead of making people richer, “free stuff” (to use Jeb Bush’s phrase) in the form of food stamps and aid to single mothers encourages a culture of dependency that discourages thrift and hard work and ultimately deprives recipients of the tools they need to get ahead. Rather than raising them up, government aid turns them into spoiled children who demand more and more and throw ever more violent tantrums when they don’t get it.
As George Will once said about riots in the French banlieues:
Welfare states are, paradoxically, both enervating and energizing — and infantilizing. They are enervating because they foster dependency; they are energizing because they aggravate an aggressive sense of entitlement; they are infantilizing because it is infantile to will an end without willing the means to that end, and people who desire welfare states increasingly desire relief from the rigors necessary to finance them.
Because the welfare state undermines the labor ethic, in other words, it undermines society in general, leaving the poor angrier and more impoverished than ever.
These are fighting words as far as liberals are concerned. But instead of rejecting them out of hand, when not turn them around and apply them to the real welfare chiselers, the ones truly raking in the big bucks?
Take the ranchers currently occupying the Malheur National Wildlife Refuge in southeastern Oregon. They claim a right to graze their cattle on federal lands free of charge and demand that the grasslands in question be “returned” to the states, even though the states never owned them in the first place. “It’s happening all across the United States,” explained protest leader Ammon Bundy. “We have the EPA taking properties away from American people … restricting whole industries, putting whole states and counties into economic depressions. We have a slew of other federal agencies that are doing the exact same thing and they’re doing it by controlling the land and the resources.”
But rather than removing such properties, the U.S. Bureau of Land Management has been renting them out for decades at well below the market rate — indeed, as much as 99.5 percent below according to a 1993 study. For the BLM as a whole, that amounts to an annual $11 billion giveaway, more than double what the feds provide via Temporary Assistance for Needy Families, the main welfare program for the poor. And where approximately two million families benefit from TANF funds each month, just three thousand ranchers have managed to corral half of all BLM subsidies.
This is welfare on a truly gigantic scale, yet Bundy and his followers want even more. And unless the feds give it to them, they’re going to seize government facilities at gunpoint and take it themselves.
Even greater infantilism is on display in Saudi Arabia, where the royal family claims exclusive control of a quarter of the world’s proven oil reserves. Saudi oil deposits are so extensive and so close to the surface that extraction costs are only a fraction of those in the U.S. The upshot is an income stream amounting to hundreds of billions of dollars a year in oil export, one that requires the House of Saud to do next to nothing in return.
By comparison, Ronald Reagan’s famous welfare queen, the one with “eighty names, thirty addresses, twelve Social Security cards [who] is collecting veteran’s benefits on four non-existing deceased husbands,” was a piker.
But there is bad news for the kingdom’s seven thousand or so princes. After peaking at $114 in July 2014, oil prices have plunged to less than $35 a barrel, a sickening 70 percent swoon that has left Saudi finances in tatters.
How have the Saudis responded? Exactly as George Will says French welfare recipients would respond to a massive cut in benefits, i.e. by blowing stuff up and taking out their anger on the world at large.
In March, with oil down to $60 a barrel, the Saudis vented their fury on Yemen, launching air attacks that have killed thousands of civilians and destroyed historic urban centers such as Sana’a and Saada to rubble. “Yemen after five months looks like Syria after five years,” declared Peter Maurer, head of the International Red Cross, following a mid-summer visit. With oil prices dipping another 25 percent, the kingdom followed up with a ground invasion in late August. Despite raking in trillions over the years, it pleaded poverty at the Paris climate talks in early December, claiming it could not afford to comply with mandates to present a comprehensive carbon mitigation plan.
“We developing countries don’t have the capacity to do this every five years,” a member of the Saudi delegation reportedly complained. “We are too poor. We have too many other priorities. It’s unacceptable.”
Mega-welfare in the form of lottery-level petro checks has thus left the House of Saud poorer and less self-reliant. But the ultimate tantrum came on January 2 when the kingdom ushered in the new year by executing 47 prisoners, including Nimr al-Nimr, a fiery Shi’ite preacher who had vigorously denounced the royal family’s arch-Sunni bigotry but nonetheless urged his followers to rely on “the roar of the word” rather than violence. When angry Shi’ites responded by storming the Saudi embassy in Teheran, the kingdom upped the ante by severing diplomatic relations and leaning on other Arab gulf states to do the same.
As The New York Times put it, “the Saudi government seemed willing to endure the potentially high political costs of the killings in order to deliver a warning to would-be militants, political dissidents and others that any challenge to the royal family’s rule would not be tolerated.” The more difficult its financial position, the more obdurate Saudi Arabia grows, turning its back on a growing chorus of criticism both domestic and foreign.
How would Saudi Arabia have responded if oil prices were still bouncing along in the $100 range? It is hard to imagine that they would have done the same. Despite talk about the Saudis cutting prices in order to punish Russia, Iran, and U.S. shale producers, it appears that the royal family has gotten caught in a downdraft of its own making and can’t figure a way out. As prices have plunged, the atmosphere in Riyadh has thus grown bleaker and bleaker. “The Saudis seem to be sort of in a retaliatory mood,” one Saudi watcher said regarding setbacks in Syria. A $100 billion budget-deficit, observed Rutgers professor Toby Craig Jones, “may soon force the kingdom to slash spending on social welfare programs, subsidized water, gasoline and jobs – the very social contract that informally binds ruler and ruled in Saudi Arabia.” As such ties fray, the position of the Saudi ruling family will grow more precarious rather than less.
If welfare weakens society as people like George Will maintain, then the lesson of Saudi Arabia is that super out-of-control welfare destroys it all the more decisively. The upshot is greater and greater instability, which, in the Middle East, translates into stepped-up terrorism and war.
Which brings us to carbon taxes.
The purpose of a carbon tax is to unwind a bloated welfare system that serves the interests of the oil companies, auto companies, and petro-sheikdoms rather than the poor. By internalizing the cost of climate change, it encourages society to accept responsibility for the carbon it injects into the atmosphere — not the most beleaguered segments, but society as a whole, which, in an age of galloping economic polarization, is increasingly of, by, and for the wealthy.
Tantrums thrown by the super-rich are wreaking havoc across much of the world. Conservatives have thus gotten it only half-right. It’s not welfare to those below that is leading to infantilization du monde, but the far greater welfare payments to those on top.
Last modified: January 6, 2016