Countering Extremism, Engaging Americans in the Fight against Global Warming (Theda Skocpol, Harvard)
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Chairman Charles Rangel presided over an impressively substantive Ways & Means Committee hearing on economic policy to combat global warming this week. The seven witnesses at the March 26 hearing spanned a fairly broad spectrum of interest, representing the Congressional Budget Office, national environmental organizations, academia, think tanks and the corporate Right.
Among the takeaways: even stalwart supporters of cap-and-trade acknowledged the need to manage price volatility; two panelists suggested eliminating the market in carbon altogether and setting an explicit price based on scientific and economic principles.
Three witnesses displayed graphs showing that price volatility in the European Union’s carbon emissions trading system has risen with accelerating trading volume. They noted that such volatility along with collapsing prices discourages investment in energy conservation and alternatives but enriches speculators.
Michelle Chan, author of Friends of the Earth’s new “Subprime Carbon” report cautioned that a bubble in carbon-based derivatives is an almost certain consequence of a cap-and-trade system with unverifiable offsets, free allowances and unregulated secondary markets in carbon allowances. With Congress starting from scratch to design a carbon pricing system, Chan urged lawmakers to avoid the sub-prime carbon syndrome at the outset. Her warning seemed especially trenchant: across the Capitol, the Senate Banking Committee simultaneously heard testimony on how to untangle the wreckage from the collapse of the sub-prime mortgage bubble whose shock waves continue to rock financial markets and the world economy, throwing millions out of homes and jobs.
Reflecting the panel’s consensus, Douglas Elmendorf, director of the Congressional Budget Office said putting a price on carbon through either a carbon tax or cap-and-trade is the most cost-effective way to spur reductions in greenhouse gas emissions. He explained that flexibility about where, when and how to make emissions reductions is essential to capture all of the potential benefits from carbon pricing. Ideally, he said, carbon prices should not fluctuate in response to temporary factors such as weather or economic activity, but should reflect permanent factors that affect compliance costs over a period of years, such as new technologies. Elmendorf outlined the tools available to manage price volatility: banking, borrowing, a reserve pool, a price floor and ceiling, or a managed price approach.
Dan Lashof of NRDC (a member of the USCAP cap-and-trade coalition) said Earth’s atmosphere is “too big to fail” and argued that “a cap is the most effective way to re-power America.” He conceded that allowances will trade on a secondary market that could be volatile, regardless of whether they are auctioned or given away. Lashof insisted, however, that price fluctuations could have beneficial effects such as countercyclically providing price relief during a recession as is now occurring in the EU trading system. He listed six ways to manage volatility: 1) banking allowances, 2) market regulation, 3) access to high quality offsets, 4) complementary measures to promote energy efficiency, cleaner transportation and transformation of energy supply technology, 5) an allowance floor price established through a reserve price in the primary allowance auction and 6) a strategic offset and allowance reserve made available at a trigger price set to avoid undue economic harm.
Dallas Burtraw of Resources for the Future recommended a “symmetric safety valve” or “price collar” to set a floor and ceiling for allowance prices and limit market manipulation. Burtraw calculated that the acid rain (SO2) cap-and-trade program left roughly a billion dollars a year of environmental and public health benefits on the table because it lacks a price floor.
William Whitesell of the Center for Clean Air Policy agreed that a carbon tax would eliminate price volatility but expressed concern that even an adjustable carbon tax such as proposed earlier this month by Rep. John Larson might not reduce emissions enough to meet climate objectives. At the other extreme, he said, a pure cap-and-trade program lacks an effective mechanism to limit volatility. Whitesell called price volatility not only a market problem but a potential risk factor that would discourage investment in low-carbon energy supply and efficiency. He recommended Rep. Cooper and Doggett’s “Safe Markets” approach: an independent board would establish price targets to meet emissions reductions goals. The board would manage the supply of allowances to meet those price targets similar to the way the Federal Reserve manages interest rates.
Chan of Friends of the Earth predicted that carbon markets would experience boom-bust cycles. She noted that speculators now do the majority of carbon trading in the EU and predicted that they would continue to dominate as carbon markets grow. She suggested that speculation would drive prices higher, spurring development of sub-prime assets and creating the kind of bubble that precipitated the mortgage crisis.
Sub-prime carbon assets, Chan testified, would come from “shoddy” carbon offsets that would trade alongside emission allowances. She noted that in some proposals (e.g., USCAP’s January Blueprint for Legislative Action), offsets represent as much as 30% of carbon traded. Contending that regulatory agencies are often captured by well-heeled financial interests, Chan said FoE wants all offsets banned to preclude sub-prime carbon. She endorsed the structure of Rep. McDermott’s bill which eliminates the basic incentive for speculation by making prices predictable with quarterly sales that limit arbitrage opportunities.
Tufts University economist Gilbert Metcalf agreed with CBO’s Elmendorf that short-term price fluctuation is harmful and can obscure the longer-term price trends needed to set incentives. Metcalf testified that the trade-off between price certainty and emissions certainty can be managed under either a carbon tax or a cap-and-trade approach, but he cited these advantages of a carbon tax: first, it can be quickly implemented using existing structures; second, it avoids price spikes that can erode political support, such as the price spike that led to a relaxation of the cap in the Southern California smog emissions trading program, “RECLAIM.”
Metcalf recommended a “Responsive Emissions Autonomous Carbon Tax” (REACT) that would set an initial carbon tax with a specified growth rate, adjusted periodically to meet cumulative emissions goals, the structure that Rep. Larson’s bill employs. Metcalf suggested that in addition to straightforward implementation, and avoidance of price volatility, a carbon tax could be more easily made both revenue-neutral and regionally-neutral to reflect differing regional energy use patterns.
Alone among the panelists, Margo Thorning of the American Council for Capital Formation testified that all climate proposals would raise prices, hobble the economy, drastically raise unemployment and would not benefit the environment, because U.S. actions would not have any substantial effect on global emissions. She did, however, agree that a carbon tax would cause less volatility in energy prices than a cap and trade system.
Ways & Means Committee members questioned the panel extensively. Chairman Rangel (D-NY) asked whether revenue return would be easier with a carbon tax (as Metcalf had testified). Rangel said, “we want the most efficient system” and asked Elmendorf whether CBO had concluded that a carbon tax would work better. With the caveat that “CBO doesn’t advocate,” Elmendorf replied, “yes, cap-and-trade is less efficient than a carbon tax.”
Rep. McDermott (D-WA) asked why derivatives traders should be trusted to set carbon prices instead of EPA and Treasury. Lashof said we need market regulations. McDermott followed up: “Where have you seen a well-regulated derivatives market?” Metcalf and Chan nodded in agreement with his point.
Metcalf noted that the U.S. isn’t acting alone or first — the EU has led. He suggested that border tax adjustments provide a “GATT-legal” way to create economic incentives for other nations to follow and noted that such adjustments are easier with a carbon tax. Metcalf also noted that the EU had high unemployment long before its climate program started.
Rep. Doggett (D-TX) mentioned that last year’s Inslee-Doyle (“carbon leakage prevention”) bill included incentives for U.S. trading partners to enact their own carbon reduction systems. Doggett touted his “safe markets” approach — “training wheels” to limit volatility in the early years of the program.
Rep. Camp (R- MI) asked whether a carbon “cap and tax” would increase unemployment. Elmendorf replied that unemployment might temporarily rise in the transition to low-carbon energy, but because low-carbon energy production is likely to employ more workers, he expects the policy to reduce long-run unemployment.
Lashof disputed that climate policy would harm the economy. Even using Thorning’s estimate of a 1% relative reduction in GDP, Lashof calculated that the delay in the expected 50% growth to 2020 would amount to only several months. Lashof concluded that climate policy flexible enough to allow various compliance options should help build a more robust economy.
Links to written testimony:
- Douglas Elmendorf, Congressional Budget Office
- Daniel Lashof, Natural Resources Defense Council
- Dallas Burtraw, Resources for the Future
- William Whitesell, Center for Clean Air Policy
- Michelle Chan, Green Investments, Friends of the Earth
- Gilbert Metcalf, Tufts University
- Margo Thorning, American Council for Capital Formation
Graph: Point Carbon EUA OTC assessment
Note: British Columbia’s carbon tax remains the standard-bearer for carbon taxing in the Western Hemisphere. Click here for our Dec. 2015 report on its emissions impacts; click here for our press release; click here to download the data spreadsheet (xlsx).
Canada is set to impose a national carbon price in 2018. The initial price will be a minimum of $10 (Canadian) per metric ton (“tonne”) of CO2, and it will increase annually by $10/tonne to reach $50 in 2022.
The policy was announced on Oct. 3, 2016 by Prime Minister Justin Trudeau in an address to Parliament and widely reported across Canada. Here’s the lede from that day’s CBC News:
Prime Minister Justin Trudeau took provinces by surprise Monday by announcing they have until 2018 to adopt a carbon pricing scheme, or the federal government will step in and impose a price for them.
A tough-talking Trudeau told MPs in the House of Commons that provinces can craft a cap-and-trade system or put a direct price on carbon pollution — but it must meet the federal benchmark or “floor price.” “If neither price nor cap and trade is in place by 2018, the government of Canada will implement a price in that jurisdiction,” he said.
Trudeau made the announcement in leading off parliamentary debate on the Paris climate change agreement Monday, making the case for Canada to cut greenhouse gas emissions by 30 per cent from 2005 levels by 2030. Trudeau said the proposed price on carbon dioxide pollution should start at a minimum of $10 a tonne in 2018, rising by $10 each year to $50 a tonne by 2022.
Provinces and territories that choose a cap-and-trade system must decrease emissions in line with both Canada’s target and with the reductions expected in jurisdictions that choose a price-based system. Whatever model a province chooses, Trudeau said, it will be revenue neutral for the federal government, with any revenues generated under the system staying in the province or territory where they are generated.
In U.S. terms — applying a Fall 2016 exchange rate of 1.3 Canadian dollars to 1.0 U.S. and converting tonnes to tons — the price equates to $7 U.S. per ton at the start, rising to $35/ton in 2022. Inputting that price trajectory into CTC’s carbon-tax spreadsheet model suggests that a U.S. carbon tax at that rate would reduce CO2 emissions by 12-13 percent below “otherwise” emissions (without a carbon price) in 2022. While the two economies are far from identical, that result is probably a good first-order approximation of the prospective impact of the Canadian carbon price.
PM Trudeau’s policy appears to be modeled on the carbon tax adopted by British Columbia in 2008, discussed directly below. Both carbon prices employ a linear ramp-up plateauing in the fifth year, and both are revenue-neutral. The parallels point to the importance of putting an actual carbon tax in place to demonstrate its effectiveness and political acceptability and thus provide “proof of concept” to advance to the national level.
British Columbia is Canada’s third largest province (estimated 2015 population of 4.7 million). Its carbon tax is straightforward and transparent in both administration and revenue treatment, and it easily qualifies as the most significant carbon tax in the Western Hemisphere.
British Columbia inaugurated its carbon tax on July 1, 2008 at a rate of $10 (Canadian) per metric ton (“tonne”) of carbon dioxide. The tax incremented by $5/tonne annually, reaching its current level of $30 per tonne of CO2 in July 2012. At the U.S.-Canadian dollar exchange rate (1.00/0.75) in November 2015, and converting from tonnes to short tons, the provincial tax now equates to approximately $20.40 (U.S.) per short ton of CO2.
Emission Reductions from British Columbia’s carbon tax (this section is from our Dec. 2015 report)
From 2008 to 2011, British Columbia’s per capita emissions of carbon dioxide and other taxed greenhouse gases declined, continuing a downward trend that began in 2004. Averaged across the period with the tax (2008 through 2013; no data are available for 2014 or 2015), province-wide per capita emissions from fossil fuel combustion covered by the tax were nearly 13 percent below the average in the pre-tax period under examination (2000-2007), as shown in the graphic directly below.
The 12.9% decrease in British Columbia’s per capita emissions in 2008-2013 compared to 2000-2007 was three-and-a-half times as pronounced as the 3.7% per capita decline for the rest of Canada. This suggests that the carbon tax caused emissions in the province to be appreciably less than they would have been, without the carbon tax.
These figures come with an important caveat: They exclude emissions from electricity production ― a minor emissions category for British Columbia, which draws most of its electricity from abundant (and zero-carbon) hydro-electricity, but a major emissions source for much of Canada. This sector accounted for just 2 percent of total emissions from fossil-fuel combustion in British Columbia in 2013, but for nearly 20 percent in the rest of the country. More importantly, that sector constitutes most of the “low-hanging fruit” for reducing carbon emissions, since electricity generation affords more opportunities for quickly and easily substituting low-carbon supply than any other major sector. Eliminating it from our analysis allowed us to compare changes in emissions over time on an equal basis between BC and the rest of the country.
In terms of total emissions (not per capita), British Columbia emissions of CO2 and other greenhouse gases covered by the carbon tax (but excluding the electricity sector) averaged 6.1% less in 2008-2013 than in 2000-2007. (The reduction was 6.7% when electricity emissions are counted.) The 6.1% contraction is roughly what would be expected from a small carbon tax such as British Columbia’s.
We also found that British Columbia’s carbon tax does not appear to have impeded economic activity in the province. Although GDP in British Columbia grew more slowly during 2008-2013, the period with the carbon tax, than in 2000-2007, the same was true for the rest of Canada. From 2008 to 2013, GDP growth in British Columbia slightly outpaced growth in the rest of the country, with a compound annual average of 1.55% per year in British Columbia, vs. 1.48% outside of the province.
Nevertheless, as seen in the figure at left, GHG emissions increased in British Columbia in 2012 and again in 2013, not just in absolute terms but also per capita. This suggests that the carbon tax needs to resume its annual increments (the last increase was in 2012; its bite has since been eroded by inflation) if emissions are to begin again their downward track.
While we believe our report demonstrates unequivocally the success of the carbon tax at reducing BC’s emissions, our figures are less striking than reductions claimed in some other publications. For example, University of Ottawa law and economics professor Stewart Elgie, an eloquent supporter of the carbon tax, asserted in an 2015 interview in Yale’s “Environment 360” on-line journal, How British Columbia Gained by Putting a Price on Carbon (April 2015), that fossil fuel use in the province fell by 16 percent in the wake of the tax. While Prof. Elgie’s interview is a tour de force on the politics of designing, selling and implementing a carbon tax without disadvantaging vulnerable sectors and alienating the citizenry, we believe the figures in our report provide a more precise and comprehensive portrait.
Raise the Tax?
Not just the case for raising British Columbia’s tax, but a framework for doing so, was laid out in a Feb. 1 (2016) Huffington Post essay by Pembina Institute communications director Stephen Hui. Drawing on a report of the province’s Climate Leadership Team released in January by BC Environment Minister Mary Polak, Hui summarized the key recommendations (there were 32 in all):
- Increase B.C.’s carbon tax by $10 per tonne per year starting in 2018 (and use the incremental revenue to lower the provincial sales tax from 7% to 6%, protect low-income households and implement measures to maintain the competiveness of emissions-intensive, trade-exposed industry);
- Cut methane emissions from the natural-gas sector by 40 per cent within five years;
- Commit to 100 per cent renewable energy on the electricity grid by 2025 (except where fossil fuels are required for backup);
- Require new buildings to be so energy-efficient that they would be capable of meeting most of their annual energy needs with onsite renewable energy within the next 10 years (and starting in 2016 for new public buildings);
- Require an increasing percentage (rising to 30 per cent by 2030) of light-duty vehicles sold in the province to be zero-emission vehicles;
- Review the Climate Leadership Plan every five years.
(Although Hui didn’t say so, one can speculate that the financial incentives inherent in the robustly rising carbon tax levels in the first bullet point might by themselves exert enough force to effectuate most of the other recommendations).
In late March, more than 130 British Columbia businesses called on BC government to increase the carbon tax by $10 per tonne per year, starting in July 2018, as reported by Pembina.
The new Climate Leadership Plan is due out this spring, and the web-based public consultation period expires on April 8 (deferred from March 25). As Hui notes, this is a critical opportunity to rally public support for ambitious new actions.
Revenue from British Columbia’s tax funds more than a billion dollars worth of cuts in individual and business taxes annually, while a tax credit protects low-income households who might not benefit from the tax. All carbon tax revenues are being returned to taxpayers through personal income and business income tax cuts, as well as a low-income tax credit, fulfilling the 2008 promise of revenue-neutrality by Carole Taylor, who as BC finance minister shepherded the tax to implementation. A 2015 study by University of Ottawa graduate students concludes that BC’s carbon tax is “highly progressive” distributionally.
Mary Polak, BC’s minister of environment, commented in 2014, “We were told it would destroy the economy and we’d never get elected again, but we’ve won two elections since [our carbon tax] was enacted five years ago. It’s the revenue neutrality that really makes it work. We collected C$1.2 billion last year and a little bit more was returned.”
The Feb. 2008 BC Budget and Fiscal Plan spelled out the rationale, impacts and mechanics of the tax, including the revenue return provisions. The first 40 pages in particular make essential reading for any carbon tax advocate seeking to master not only the details of carbon taxing but communication tools for making a carbon tax palatable to the public. We also recommend Alan Durning’s March 13, 2008 Grist post, which usefully parsed the four principles embodied in BC’s carbon tax: revenue neutrality, phased implementation, protection for families, and broad coverage.
In May 2009, British Columbia voters re-elected Liberal Party Premier Gordon Campbell, under whose aegis the province’s carbon tax was proposed, devised and instituted, to a third four-year term. Our post, BC Voters Stand By Carbon Tax, reported on the election’s significance for carbon tax campaigners. See also Macleans magazine’s detailed take, Did Gordon Campbell Win Because of His Carbon Tax? In the same vein, the Vancouver Sun reported in November 2009 on the cost to the opposition New Democratic Party of its strident opposition to the BC carbon tax during the May provincial election.
In July 2012, on the occasion of the fourth (and final) annual increase in the BC carbon tax, the Toronto-based Financial Post newspaper chimed in with 4 key reasons why BC’s carbon tax is working. (The Post drew its text from the June, 2012 report by Sustainable Prosperity, British Columbia’s Carbon Tax Shift: The First Four Years.)
- Drop in Fuel Consumption: “The carbon tax has contributed substantial environmental benefits to British Columbia (BC). Since the tax took effect in 2008, British Columbians’ use of petroleum fuels (subject to the tax) has dropped by 15.1% — and by 16.4% compared to the rest of Canada. BC’s greenhouse gas emissions have shown a similarly substantial decline (although that analysis is based on one year’s less data).”
- Growth Unaffected: “BC’s GDP growth has outpaced the rest of Canada’s (by a small amount) since the carbon tax came into effect – suggesting that it has not adversely affected the province’s economy, as some had predicted. This finding fits with evidence from seven other countries that have had similar carbon tax shifts in place for over a decade, resulting in neutral or slightly positive effects on GDP.”
- Revenue-Neutral: “The BC government has kept its promise to make the tax shift ‘revenue neutral’, meaning no net increase in taxes. In fact, to date it has returned far more in tax cuts (by over $300 million) than it has received in carbon tax revenue – resulting in a net benefit for taxpayers. BC’s personal and corporate income tax rates are now the lowest in Canada, due to the carbon tax shift.”
- Greenhouse Gas Emissions Declining: “From 2008 to 2010, BC’s per capita GHG emissions declined by 9.9% — a substantial reduction. During this period, BC’s reductions outpaced those in the rest of Canada by more than 5%.”
A similar tack was taken in a July, 2012 NY Times op-ed, The Most Sensible Tax of All, by Yoram Bauman, an environmental economist and fellow at the Sightline Institute in Seattle, and Shi-Ling Hsu, law professor at Florida State University and former law professor at the University of British Columbia, and author of “The Case for a Carbon Tax” (Island Press, 2011). (Bauman has since become the spearhead of Carbon Washington and its Measure I-732 Carbon Tax initiative.)
A later summation is a July, 2014 Toronto Globe & Mail op-ed, The shocking truth about B.C.’s carbon tax: it works. Also useful is a July, 2014 op-ed in the Guardian, A carbon tax that’s good for business?, that cogently compares B.C.’s successful revenue-neutral carbon tax with Australia’s short-lived revenue-raising one.
BC’s Advantage — Abundant Hydro-Electricity
British Columbia’s carbon tax applies to energy sold and consumed in the province from fossil fuel combustion. (Notably, the tax excludes coal exported for combustion elsewhere.) Because the province is blessed with abundant sources of hydro-electric power, the price of electricity there is only minimally affected by its carbon tax. But BC’s power grid is linked to the U.S. Pacific Northwest and Alberta. Seasonal and daily fluctuations in power availability and electricity demand result in electricity inflows and outflows, in turn raising the question of whether BC’s carbon tax applies to the full carbon content of electricity consumed there.
Recent analysis indicates that at times, up to a quarter of BC’s electricity may be generated by fossil fuel sources outside the province, whose carbon emissions are not covered by the tax. Nevertheless, this should be seen as a minor flaw in BC’s carbon-tax leadership. Indeed, this instance of carbon leakage points to the need for adjacent jurisdictions, perhaps especially those linked through the power grid, to enact their own carbon taxes, as part of the march to a globally-harmonized carbon price.
Canada (other than British Columbia)
Why Saskatchewan should join the carbon-pricing club, Christopher Ragan, Globe & Mail, 29 Feb 2016.
Canada’s Atlantic provinces eyeing regional carbon price – PEI environment minister, Mike Szabo, Carbon Pulse, 14 Feb 2016.
Ottawa seeks to set national minimum on carbon pricing, Shawn McCarthy, Globe & Mail, 17 Feb 2016.
Canada’s second largest province began collecting a carbon tax on “hydrocarbons” (petroleum, natural gas and coal) on Oct. 1, 2007. Though the tax rate is quite small, the tax nevertheless made Quebec the first North American state or province to charge a carbon tax.
Here are details from the Toronto Globe & Mail (June 7, 2007, updated April 3, 2009):
Quebec will introduce Canada’s first carbon tax this fall, forcing energy producers, distributors and refiners to pay about $200-million a year in taxes as one part of an ambitious plan to fight global warming.
About 50 energy companies will be required to pay the new tax, including Ultramar Ltd., Petro-Canada and Shell Canada Ltd., which operate refineries in the province as well as distributors Imperial Oil Ltd., Irving Oil Ltd. and independent retailers.
Oil companies will be required to pay 0.8 cents for each litre of gasoline distributed in Quebec and 0.938 cents for each litre of diesel fuel. The tax is expected to generate $69-million a year from gasoline sales, $36-million from diesel fuel and $43-million from heating oil.
At March 2008 exchange rates, the petroleum tax rate equated to just 3.1 cents (U.S.) per gallon of gasoline and 3.6 cents for diesel. Moreover, because only a tiny fraction of electricity in Quebec is generated from fossil fuels (virtually all is from hydroelectricity), power prices are essentially unaffected.
Spread across Quebec’s population of 7,546.000 million (2006), the anticipated annual carbon tax revenue of $200 million is only $26.50 per person per year ($26.75 U.S.). For the U.S. to generate the same per capita revenue through a carbon tax would entail a rate of just $4.26 per ton of carbon (equivalent to $1.16 per ton of carbon dioxide), which equates to 1.1 cent (U.S.) per gallon of gas.
The worldwide fossil fuel divestment campaign got a huge boost this week when Guardian editor Alan Rusbridger boldly thrust his paper into the fray. Britain’s most respected newspaper is urging readers to sign a petition by 350.org demanding that the Gates Foundation and the Wellcome Charitable Trust divest from the world’s top 200 fossil fuel companies within five years.
Combined, the two charities manage over $70 billion in assets. Both say they consider climate change a serious threat. But last year the Gates Foundation invested at least $1 billion of its holdings in 35 of the top 200 carbon reserve companies, while the Wellcome Trust invested $834 million in fuel-industry mainstays Shell, BP, Schlumberger, Rio Tinto and BHP Billiton.
We’re both elated and concerned by Rusbridger’s audacious move. Elated that this distinguished and brave journalist has thrown down the gauntlet to the global fossil fuel industry. But concerned that this divestment campaign may raise false hopes.
As Matthew Yglesias articulated last year in a thoughtful piece on Slate, divestment by socially responsible investors, universities and even governments won’t starve capital flows to fossil fuel corporations anytime soon. That’s because in a global market, every share of stock we activists dutifully unload will be snatched up in milliseconds by some trader who can bank on humanity’s continued dependence on fossil fuels to continue generating profits.
South Africa’s historic divestment campaign — the one that helped topple Apartheid and enshrined divestment as a tool against oppression — was paired with a UN-sponsored boycott of South African goods. Not just aiming at the supply of capital but destroying the demand for goods sheared the Apartheid regime’s economic lifeline to the rest of the world more than either policy could have done alone.
No, we’re not suggesting a global boycott of fossil fuels. Rather, we point to the Guardian’s campaign to reiterate that the best and maybe only broadly effective way to reduce fossil fuel demand (which is the point of a boycott) is with a carbon tax. Economists agree on that policy prescription just as strongly as climate scientists agree on the diagnosis. And national-level carbon taxes can be designed to draw our or any nation’s global trading partners into carbon taxing, which means that a move by a big economy to impose a carbon tax will trigger a wave of followers.
So by all means, divest. The cultural and perhaps political opprobrium that divestment can spark is long overdue for the fossil fuels industry. But let’s not assume that divestment alone will break the chains of fossil fuel dependence. Even with the Guardian’s welcome campaign, the world still needs a transparent price on carbon pollution to strangle demand for fossil fuels by replacing them with non-carbon alternatives.
A new report from a British Columbia think tank reveals the inside story behind B.C.’s successful tax on CO2 pollution. “How to Adopt a Winning Carbon Price, Top Ten Takeaways from Interviews with the Architects of British Columbia’s Carbon Tax,” published by Clean Energy Canada, draws on extensive interviews with senior government officials, elected representatives and a broad range of experts who helped shape or respond to this groundbreaking policy.
British Columbia inaugurated its carbon tax on July 1, 2008 at a rate of $10 (Canadian) per metric ton (“tonne”) of carbon dioxide released from coal, oil and natural gas burned in the province. The tax incremented by $5/tonne annually, reaching its current level of $30 per tonne of CO2 in July 2012. At the current U.S.-Canadian dollar exchange rate (1.00/0.80), and converting from tonnes to short tons, the B.C. tax now equates to around $22 (U.S.) per ton of CO2.
In the tax’s initial four years (2008 to 2012), CO2 emissions from fuel combustion in British Columbia fell 5% — or 9% per capita, considering the province’s 4.5% population growth over that span. [NB: These figures are revised downward from the original version of this post; see editor’s note at end.] During the same period, emissions from the rest of Canada increased slightly. Revenue from the tax has funded more than a billion dollars worth of cuts in individual and business taxes annually, while a tax credit protects low-income households who might not benefit from the tax cuts. [Read more…]
The entrenched power of the fossil-fuel industry and its political backers isn’t all that stands in the way of taxes on carbon pollution. Outmoded ideas and enduring myths about energy use and taxes are also factors.
This page describes and dissects some of these misconceptions. Please send us your own favorite fallacies about carbon taxes. Ditto your suggestions or criticisms of ours.
Myth #1. A tax on carbon pollution will harm the poor and middle class.
Who says? Some low-income advocates, some left-of-center activists, some conservatives masking as populists.
Rebuttal: The wealthy use more carbon-based energy than the rest of us, by far. For every gallon of gasoline used by the poorest quintile (20%) of households, the richest quintile uses three.
A similar pattern holds for the other sources of carbon pollution: electricity, jet fuel, even diesel fuel that powers the trucks that deliver goods. It’s true that consumption taxes, a category including carbon taxes, are “regressive” — they take a larger share of income from low-income households — but that’s true only when the use of the tax revenues is ignored. The net impact can be made “progressive,” i.e., beneficial to people of below-average means, by proper distribution of those revenues.
One policy option is to distribute the revenue directly to households as regular “dividends.” Climate scientist Jim Hansen and the Citizens Climate Lobby are among those calling for all carbon tax revenues to be returned to citizens in equal, monthly “green checks.” In 2016 CCL released a working paper analyzing the short-term financial impact of a $15/ton carbon fee under this plan.
The report, which estimated household carbon footprints with new levels of detail, including crucial geographical variation, found that 53% of U.S. households (58% of individuals) would reap a positive net financial benefit, i.e., receiving more via the dividends than they would pay directly and indirectly in higher fossil fuel prices. The benefits would be greatest for lower-income, younger, senior, and minority households with nearly 90% of households below the poverty line benefitting from a carbon tax. The distributional effect would essentially shift purchasing power from the top quintile of households to the bottom two quintiles, highlighting the income-progressive nature of a fee-and-dividend plan.
A worthy alternative, which Al Gore and many economists advocate, is “tax-shifting” — use carbon tax revenues to reduce regressive taxes such as sales taxes and payroll taxes. (See our Issues page, Managing Impacts.) British Columbia has enacted and annually increased its revenue-neutral carbon tax with popular support by dedicating all revenue to reducing a variety of other taxes ranging from sales taxes to business taxes.
What’s really regressive is the impact of global warming. Sea level rise, food shortages and storms like Katrina, Irene and Sandy hit the poorest hardest.
Myth #2. Carbon taxes won’t change habits — after all, high gasoline prices haven’t cut usage.
Who says? An odd collection of groups and individuals, including former Sierra Club “CAFE” (car fuel-economy) lobbyist Dan Becker (“Even as gas prices have doubled and trebled over the past several years, we see little change in driving behavior,” Becker told the New York Times in October, 2006.)
Rebuttal: Four points are key. First, rises in gasoline prices have cut usage, and by more than a little. Comparing 2008, the last pre-recession year, to 2003, U.S. gasoline usage was unchanged even though economic activity was up 13%. What did the trick was the 73% higher price “real” (inflation-adjusted) price. Second, much of the increase in energy prices in recent years was masked by price volatility; as we show here, over the past decade or more, gas prices have fallen almost as often on a month-to-month basis as they have risen, masking the upward trend and convincing millions of Americans that prices would head south soon enough to make adjustments unnecessary. Third, other sectors, especially electricity generation, which emits nearly twice as much CO2 as cars, are even more price-sensitive. Last, price-responsiveness will grow as households have opportunities to buy more fuel-efficient vehicles and appliances, and as society transitions to a more fuel-efficient infrastructure — once we enact carbon taxes to send clear and strong price signals. (See our Issues page, Carbon Tax Effectiveness, for more discussion.)
Myth #3. Taxes on carbon emissions aren’t necessary. Vehicle efficiency standards and mandates or subsidies for wind turbines, ethanol, hydrogen, nuclear power [pick one or more] will solve the problem.
Rebuttal: Standards and subsidies are blunt instruments — vehicle efficiency standards don’t reduce vehicle usage, for example — and are often contested for years and then undermined by “gaming” (viz., the “light trucks” exemption from CAFE standards, or tax credits for hybrid SUV’s). Moreover, fuel usage is ever-changing and diffuse (a majority of petroleum is not used in cars or light trucks, for example), while efficiency standards are by nature both usage-specific and frozen in time. As for supply, economic theory predicts, and experience confirms, that raising the price of a harmful activity is always more effective at reducing that activity than is lowering prices of the thousands of imaginable alternatives — as we documented in the comments we submitted in January 2014 to the Senate Finance Committee. Only taxes on carbon pollution from fossil fuels can create the clear, rapid, across-the-board incentives needed to propel a massive shift to clean alternatives.
Myth #4. Heavy fuel taxes will constrict the economy.
Who says? Traditional growth champions, fossil fuel interests.
Rebuttal: Price volatility wreaks far more economic havoc than high or even steadily rising energy prices. Even fairly steep increases can be manageable so long as they’re regular and predictable, particularly now that the share of economic activity occupied by the fossil fuels sector is at an historic low — provided the revenues are distributed or tax-shifted back to Americans. And carbon taxes need not be draconian to accomplish their mission. Our program of recurring annual increases of $10-15 per ton of emitted carbon dioxide equates to 5-10% increases in energy prices per annum (with the percentages shrinking as the “base” rises and as non-fossil energy assumes a larger share). By comparison, the average annual real increase in U.S. gasoline prices in 2003-07 was 11%, but that didn’t stop the economy from growing at 3% a year. Needless to say, the true long-term threat to the economy (and everything else) is unchecked global warming, as the National Academy of Sciences warned years ago and the National Climate Assessment reiterated more urgently in 2014.
Myth #5. Carbon taxes will provide more revenue for government to squander.
Who says? Anti-tax groups, some conservatives, Tea-Partiers.
Rebuttal: Not if the tax is made revenue-neutral” via dividends and/or tax-shifting (see rebutgtal to Myth #1). Because higher taxes on fuels will create a strong “market pull” to clean energy, carbon taxes will put a big dent in fossil fuel use and CO2 emissions without having to earmark revenues for hybrid cars, mass transit, biofuels, etc. — or to lawmakers’ pet projects.
Myth #6. Heavy fuel taxes will price U.S. goods out of the marketplace.
Who says? Some business groups, some labor unions.
Rebuttal: This argument assumes a static economy, sans adaptation and innovation. In reality, increased energy taxes will shrink the trade deficit (by cutting both volumes and pre-tax prices of imported oil). The higher prices will also spark innovation in clean, efficient technologies better suited for world markets than, say, supersized automobiles. Finally, taxing energy will create parity with our traditional competitors — the EU and Japan — while encouraging like-minded actions in India, China and other emerging economies. In the interim, border tax adjustments can equalize prices of imports from non-carbon-taxing nations.
Myth #7. A carbon cap-and-trade system is as good as a carbon tax, and more politically feasible.
Who says (or said)? Too many “Big Green” groups; elected officials seeking to “hide the price” signals; business organizations and corporations that know a complex program like cap-and-trade can be more easily gamed in their favor.
Rebuttal: Click here for CTC’s dissection of the logistical and strategic differences between carbon taxes and cap-and-trade (they’re not minor). As for political feasibility, the political process has borne out our belief that carbon cap-and-trade was too complex, regressive, cumbersome and undemocratic to succeed. Supporters of cap-and-trade were never able to resolve this contradiction: either it wouldn’t raise fossil fuel prices, in which case it would be ineffectual; or it would raise them after all, provoking an unstoppable backlash among a citizenry that hadn’t signed off on the higher prices and wouldn’t be getting the dividends from the tax revenues, while carbon-market participants skimmed big profits. Moreover, cap-and-trade’s complexity guaranteed that it couldn’t be implemented for several years — the Northeast states’ electricity cap-and-trade system took five years to institute — whereas a carbon tax can be implemented within months, as British Columbia demonstrated with its 2008 carbon tax startup.
Myth #8. Americans are too myopic, and our politics too broken, for even revenue-neutral carbon taxation to ever take root here.
Who says: Veterans of failed past efforts to take on entitlements; assorted skeptics and cynics — including, sometimes, ourselves.
Rebuttal: This is the myth even we at CTC can’t dismiss out of hand. Witness the failure of past fuel-tax efforts, the resistance to fossil-fuel-displacing wind farms in some areas, and the persistence of costly tax entitlements like the deductibility of home mortgage interest payments from federal taxes — each, in its own way, testament to the dictum that “losers cry louder than winners sing,” in the words of University of Michigan tax policy expert Joel Slemrod.
Nevertheless, we’re working for a different outcome for carbon taxes. For one thing, emphasizing revenue-neutral carbon taxing can help dispel the presumption that a carbon tax is a tax hike. Second, because the non-climate benefits of carbon taxes are enormous, from cleaner air to less road gridlock, there are many opportunities to broaden support from traditional environmentalists. Finally, unlike 1980 or 1993, when fuel-tax proposals that were primarily designed for budget-balancing went down to defeat, the stakes are frighteningly high. Stiff carbon taxes can’t rescue the climate by themselves, but without them a rescue is virtually inconceivable. We remain hopeful that the American people will rise to the challenge.
The Case for a Carbon Tax (by Prof. Shi-Ling Hsu), reviewed here. Chapter 4 offers forceful responses to standard (and largely mythological) arguments against carbon taxes and chapter 5 delves into some of the psychology that biases many people against using price instruments to address global warming.
Five years ago, novelist and technologist Ramez Naam published a series of articles, collectively titled How Far Can Renewables Go? Pretty Darn Far, in which he wove empirical data into declining-cost curves for wind power, solar photovoltaic cells and battery storage that pointed, in his estimation, to prodigious future growth paths for renewables in the U.S.
Now, in a new post, Solar’s Future Is Insanely Cheap, Raam carries optimism about solar photovoltaics to a new height.
He demonstrates that costs of utility scale solar electricity in the U.S., China, India and the world as a whole have dropped by a factor of five since 2010, putting them at around $50 per megawatt-hour (5 cents per kWh), the low end of the cost range for new fossil-fuel generating plants. He points out that most forecasts, including his own, have underestimated the speed of decline in solar costs.
This 10-year record of plummeting solar PV costs is impressive and heartening. But what can it tell us about the next 10 or more years? To predict the cost of solar electricity going forward, Naam uses a “learning curve” approach based on Wright’s Law, a staple of industrial engineering that states that, for many technologies, each doubling of cumulative production leads to a constant percentage decline in the cost of that technology. (The decline rate varies across technologies but tends to be constant for each.)
By Naam’s account, Wright’s Law has been found to apply to at least sixty technologies. Naam demonstrates it via falling prices for Henry Ford’s Model T as its production grew steadily through the period 1909 to 1923. He then compares the cost of utility-scale electricity with global cumulative installed capacity of solar, and, just as Wright’s Law would predict, finds a smooth and steady decline, which he depicts in the chart at right, below.
By plotting these data on a log/log scale (not shown here), as befits “power laws” like Wright’s Law, Naam finds that the cost of utility-scale solar generating facilities has dropped by 30% to 40% for each doubling of installed capacity. This coefficient is at the high end of “doubling elasticties” in those sixty or so technologies that are said to conform to Wright’s Law.
If ever there was cause for optimism that solar power (and perhaps its renewable-power cousin, wind turbines) can keep getting cheaper at a fast enough rate to permit and justify massive deployment (which in turn will keep driving down costs), it is Raam’s May 2020 post. Think of it: just two more doublings in cumulative production (and installed capacity) will drive down costs by another one-half to two-thirds. Affordable, irresistible solar is coming to save us from fossil fuels and climate change.
There’s a problem with this approach, however. The solar costs that Naam has plotted are total installed costs. Thus, they include not only the cost of the solar panels (modules) but the costs of inverters, trackers, cabling, mounting systems, land and labor, not to mention the business relationships and contractual arrangements necessary to actually bring each job to fruition. These so-called balance of system (BoS) costs currently account for 2/3 of the cost of solar installations, by Naam’s admission. And while it is true that the “inertia” in BoS costs means that the costs of the modules themselves have fallen even faster since 2010 than the 80 percent overall drop in solar costs in that time (that’s the 5-fold drop we noted earlier), this same inertia seems almost certain to drag down the rate of cost decline going forward.
And in fact since 2010, costs of modules have dropped approximately 10-fold; twice as much as solar installations as a whole, which means that the other parts of solar costs fell less impressively (see this and this). The slower learning rate for BoS solar costs suggests that while the modules, with their very high learning rate, might theoretically cost next to nothing, the inertia in at least some BoS costs could mean that, no matter how many megawatts and gigawatts of solar are installed here and globally, the full cost of solar electricity may level off and be unable to fall below a certain level.
Even if we assume as Naam does that a 30% to 40% learning rate applies more or less uniformly to all solar costs, including modules and BoS items, cumulative installed capacity will have to double to achieve each approximate 35% drop in cost. Successive doublings in generating capacity require larger and larger absolute increases. World solar generating capacity was about 1 gigawatt in 2000. It was over twice that in 2003, and twice that, about 4 gigawatts, in 2005. Today world solar generating capacity is about 600 gigawatts. Growing from 600 to 1200 gigawatts, and then again from 1200 to 2400 gigawatts, requires vastly more production of panels and other necessary materials than growing from 1 to 2 gigawatts and then from 2 to 4 gigawatts, etc.
In order for cumulative installed solar capacity to double and then double again by 2030, for example, solar’s rate of growth would have to maintain exponential growth in the range of 15% per year. Whether such a continued high rate of growth is at all feasible is a fair question.
Learning from History: Autos, Railroads, Electricity
U.S. solar growth has slowed of late, taking three years for its most recent doubling, from 2016 to 2019, which Naam refreshingly acknowledges, noting that “solar growth has very clearly slowed over the past few years.” This slowdown in solar’s growth in the face of continued dramatic declines in costs signals that other factors are involved than cost alone.
In short, cost declines following Wright’s law may not translate directly to increased deployment. Take Naam’s example of the Model T. U.S. motor vehicle ownership grew exponentially from around 1900 to 1920 but then settled into a long period or more of less linear growth, as indicated in the chart above. (In this figure and the two following it, exponential growth rates were selected that produce curves that approximately match actual data for the early years.)
Another example, shown at left, is U.S. railroad track mileage, which surged in the 1850s and 60s and then also settled into a long period of linear growth.
A third example, shown further below, is U.S. electricity generation. An exponential growth rate of about 9% per year is apparent from 1900 until the mid-1950s. Exponential growth slowed around then, and by 1970 growth had settled into a more-or-less linear pattern.
Few technologies — or natural systems, for that matter — grow in an exponential manner for long (Smil, 2014, Kramer & Haigh, 2009.) Instead, “growth curves” are characterized by an early exponential period that transitions to a linear phase, adding a more-or-less constant increment each period, which eventually levels off as constraints increasingly come into play and limit further growth.
Growth in both motor vehicle ownership and railroad track mileage became linear despite ongoing innovations in the technologies themselves and improvements in manufacturing methods as production continued to increase. A similar pattern is apparent with U.S. electricity generation; growth gradually transitioned from exponential to linear during the ‘60s and ‘70s, as decades of declining costs (which enabled utilities to discount rates for big users) ground to a halt. Since 2005 growth in electricity use has ceased altogether, primarily due to large-scale dissemination of energy efficiency (see reference to Komanoff analysis, below).
How fast will solar electricity production grow?
Naam’s discussion of solar electricity’s declining costs is important because it can shed light on how far and fast solar electricity generation is likely to grow. In particular, can solar output grow rapidly enough to displace enough coal and natural gas to help avert climate catastrophe?
To be sure, growth in solar electricity is already pushing out fossil fuel use in the United States and other countries. In the U.S., the roughly 100 TWh increase in solar electricity production since 2005 was great enough to avert burning coal and gas that would have emitted 74 million metric tons of carbon dioxide in 2019, according to an analysis released last month by Carbon Tax Center director Charles Komanoff.
Yet that accomplishment pales beside the 1,618 million metric tons actually emitted by U.S. power plants last year. And the need for large-scale electrification of transport and heating — in order to displace petroleum — only magnifies the growth required of solar (and wind), and perhaps from other advanced energy sources such as next-generation nuclear and enhanced geothermal, to fully decarbonize the economy.-
Unfortunately, Naam doesn’t venture to predict the pace of solar growth, either for the U.S. alone or for the world as a whole. That is probably wise, seeing as that at this point, and probably for some time to come, there is no way to divine whether to extrapolate past growth figures linearly or exponentially. We’ll revisit this issue in a follow-on post scheduled for the first week of July.
This new page, added in 2020 spring, reprints articles about the pandemic that touch on the climate crisis and the future of our species. These first selections, by a NY Times columnist and critic of Silicon Valley, an acclaimed author of “speculative fiction,” a renowned environmental economist, and an attorney specializing in energy projects, are particularly evocative and wide-ranging.
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The Coronavirus Is Rewriting Our Imaginations, by Kim Stanley Robinson
From Climate to Covid, and Back Again, by Andrew Ratzkin
Write us at firstname.lastname@example.org to suggest your own candidate post.
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The Bay Area Billionaires Are Breaking My Heart, by Farhad Manjoo (May 13)
Looking for hope in San Francisco
New York Times opinion columnist Farhad Manjoo, who reports on Bay Area politics, culture and tech wars, captured the poles of optimism and defeat, possibilities and realities, in this NYT Sunday review piece.
One sun-drenched afternoon last month, I took a long solo bike ride through the San Francisco Bay Area. I rode from my home to Mountain View, near the once-desolate stretch of marsh that Google has leased from NASA to build a monumental new campus. It looks like a collection of lunar bases made out of origami.
Construction has been paused under lockdown, and on the fetid plains surrounding the million-square-foot project, birds sang and wildflowers painted the horizon, and the trails that run beside the site were packed to socially distant capacity with masked families on foot and wheel.
Bicycles and pets, not sirens and fridge-truck morgues, have become the unlikely icons of the pandemic in the Bay Area. Bike shops and animal shelters say they’ve been inundated with demand. With the streets free of cars and full of people, the air clean, the cavernous office buildings empty and their endless parking lots turned into carefree pedestrian plazas, you’d be forgiven for mistaking some areas of Silicon Valley under lockdown for outtakes from the “The Good Place.”
On my way to the Google lunar landing base, I passed by Santiago Villa, one of the area’s few remaining mobile-home parks. It was built in the 1960s as an affordable retirement community. In January, its residents, who rent the space on which their mobile homes stand, petitioned the City Council to include trailer parks in Mountain View’s rent-control rules.
They’re worried that wealthy Googlers looking for a kitschy pied-à-terre near the new campus will push them out. The anger has been rising. Last year, the same City Council prohibited RVs and trailers — many of them used as homes — from parking on the street; a petition to overturn the RV ban will be on the ballot in November.
But as I rode past Santiago Villa, all that rancor felt like a remnant of the Before Time. Everything was quiet — then, from one of the trailers, a jolly trumpet began blowing loud and out of tune.
It was then that I first had the ghoulish idea: Could the coronavirus have an upside, at least in this one place? What if the pandemic and its aftermath lead Googlers and trailer park residents to find common cause? What if, after the virus, the Bay Area’s wealthy gained a new appreciation for those who live on its edges, and finally made room for them in this digital wonderland?
I have lived in the Bay Area for almost 20 years, and for most of that time, I’ve felt this place creaking steadily into uninhabitability for all but the wealthiest few. We have one of the world’s highest concentrations of billionaires, and yet we have not been able to marshal our immense wealth and ingenuity against our most blatant and glaring challenges — including the lack of affordable housing and entrenched homelessness.
But in this crisis, the Bay Area’s response was an unexpected success. And that has given a lot of people, including me, new hope about what’s possible. Yes, it sounds hokey, but this might be a time for hokeyness.
The first big moment came on March 16, when the six counties around the San Francisco Bay ordered the first shelter-in-place rules in the United States. Google, Apple, Facebook and other large employers fell right into step; they ordered all of their employees to work from home, setting the pace for most other local businesses to close up shop. And the tech giants set an important example — they made a commitment to keep paying their on-site service workers, even if they could no longer come on-site to work.
San Francisco, Oakland and San Jose secured thousands of hotel rooms for homeless people, away from the streets and the risk of the virus in crowded shelters. Cities opened their streets to pedestrians and bicycles and closed them to cars. Perhaps most important, officials in the area were the picture of calm leadership.
When I despaired about our national failures, I found myself tuning into hear the plain-spoken exhortations of San Francisco’s mayor, London Breed. “This is going to take all of us,” Breed told the city late in March. “This is going to take all of us coming together and sacrificing so that we get through this.”
And it worked. Thanks to some combination of early action, collective adherence to public health guidelines, a concerted effort to help the vulnerable, and perhaps just blind luck, mass death missed the Bay. By the start of May, fewer than 30 people had died of Covid-19 in San Francisco; in the greater Bay Area, deaths stand around 350.
The toll is probably an undercount, and blacks and Latinos are disproportionately represented in it. Still, compared to many American metropolitan areas, this ranks as a near miracle. San Francisco’s death rate of four per 100,000 residents is one-fourth the rate in Los Angeles, a fraction of the national average, and nowhere near New York’s.
In the absence of mass death, people around here have had time and psychic space to imagine longer-term possibilities. If we could band together so quickly to beat the virus, making so many big changes so seamlessly, what else are we capable of doing?
I was not alone in my vague sense of optimism.
In an article that went viral among techies last month, the venture capitalist Marc Andreessen characterized the pandemic as a call to arms to rebuild American institutions, including our cities. Like many of the Valley’s tech princes, Andreessen has often been skeptical of government and its champions, but now here he was, cheering them on: “Demonstrate that the public sector can build better hospitals, better schools, better transportation, better cities, better housing,” he wrote. “Stop trying to protect the old, the entrenched, the irrelevant; commit the public sector fully to the future.”
I heard a similar urgency for grand reform from nearly every Bay Area official, activist and resident I spoke to — even those who had clashed with the tech industry or those whose fights earlier seemed unwinnable.
Libby Schaaf, the mayor of Oakland, opened up 74 miles of city streets for pedestrians and moved hundreds of homeless people into hotels. She saw the crisis as an opportunity to make permanent improvements.
One example: Schaaf required that the hotels which the city paid to house the homeless during the pandemic offer the city long-term leases. “I do not want, at the end of the health emergency, to turn homeless people back out onto the streets,” she said.
In April, Ro Khanna, who represents parts of Silicon Valley in the House, introduced legislation to provide greater pay, health care and labor protections to workers deemed “essential” during the pandemic. “When we talk about who are the ‘essential workers,’ very few people are saying it’s lawyers or middle or senior management,” Khanna said. “They’re saying, we want the person who’s delivering our groceries, the person who’s keeping the internet open, the electricity flowing, or the person who’s taking care of our kids.”
In a similar way, the crisis illustrated the importance of keeping everyone healthy — even people who lack a place to live. “Housing is health care,” explained Abigail Stewart-Kahn, director of the San Francisco Department of Homelessness and Supportive Housing. “That’s something, in my field, that people have been saying for a long time.” Now, the connection was inescapable — people who lacked housing were also outside of the health care system, and during a pandemic, their presence on the streets created a risk for everyone else in the city. “What this has shown us all is that everyone’s health is intertwined,” she said.
These were all officials and experts — people who might be biased toward finding “silver linings” in any crisis. But was anything really changing for homeless people around the Bay Area? I contacted several homeless people who have been placed in hotels during the pandemic. They spoke rapturously about their sudden fortune in an otherwise grim time.
“Oh my God — I can really breathe and be myself.” That was the reaction from a 33-year-old woman who had been living in a hotel for weeks with her 12-year-son. She asked me not to use her name. Before the virus, they had spent years bouncing from couch to couch around the Bay. Under lockdown, their lives were, in many ways, freer than before. For the first time in years, she no longer felt that crushing dependence on other people. “I can move as the adult I am, and no one dictates what I do or how I move,” she told me.
The hotel room has two beds and a private bathroom. It was starting to feel like a studio apartment — like a kind of home, she told me. “I only wish we could have a deep fryer.” It is only guaranteed for three months, but she has begun to see the possibility of a new life in the uncertain distance: “I just know that I am on my way to my place.”
As the weeks of lockdown dragged on, San Francisco began to break my heart again. While the number of coronavirus cases and deaths remained low, the full gloom of the coming recession began to descend into view, and with it, the same ageless, endless political squabbles. The basic problem is that despite the region’s apparently limitless wealth, there were not enough ready resources available to public officials to reach everyone in need. And in the absence of more help from the state and the federal government, or from the region’s billionaires, the Bay Area’s needs simply outmatched its capacity to meet them.
Even after the huge effort to move people into hotels, there are still thousands of homeless people on the Bay Area’s streets, and little prospect that many will be housed anytime soon. My hopes for inspiring leadership began to fall apart when a fight broke out recently between San Francisco’s Board of Supervisors and the mayor over how many more homeless people the city could house.
The board passed an ordinance to secure 7,000 hotel rooms for homeless people who are now on the street, but the mayor refused to comply. She said it was impossible; the city is straining against its limit already. So far, San Francisco has placed 965 homeless people in hotel rooms, and has signed contracts for 2,731 rooms for homeless people and essential workers.
This fight hinges on the usual things — money, willpower, staffing and basic municipal capacity. But it also lays bare how ephemeral our coronavirus-inspired unity may be. “To the extent we have restored faith in what is possible, we have also underscored, sadly, our city’s limitations,” Matt Haney, a member of the Board of Supervisors, told me.
When I asked the mayor about her dispute with the supervisors, she was cordial but clearly annoyed. Annoyed that the supervisors hadn’t considered the limits on the city’s capacity. Annoyed that she agreed with them — more homeless people could be taken off the streets if only she had the funds or the people to make it happen.
The federal government has promised to reimburse cities for part of the cost of housing the homeless, but Breed says she is not sure whether those funds will come through. “There’s a huge difference between what we all want, which is to get every homeless person off the street, and reality,” she said.
And instead of bringing the region’s wealthy and its needy together, she suggested that the pandemic might pit the less needy against the more needy. “I think many people are like, ‘Well, wait a minute — I lost my job where I was making minimum wage. I can’t pay my rent. I can barely eat. Where’s my help from the city?’” Breed said.
When I asked if the virus had created much political room for bold action to address inequality, she said, “It’s going to make it even harder.”
Is this really the best the city can do? The further we move from the initial crisis, the crazier my bike-riding optimism now sounds. Rather than fostering some new sense of civic unity, the virus is just as likely to worsen inequality further.
Margot Kushel, a physician and scholar of homelessness at the University of California, San Francisco, suggested that this was the “nightmare scenario” for inequality in San Francisco: low-income jobs disappear, so more people lose their homes, but because the tech industry keeps doing well, home prices remain high, and housing slips further out of reach for everyone else. “Those who are housed are fully aware that they’re one thread away from losing that housing,” Kushel said.
San Francisco and other Bay Area cities have imposed temporary moratoriums on evictions caused by virus-related economic disruptions. But those will expire later in the year, at which time a wave of tenants may be kicked out of their homes unless they can pay months of back rent. At the same time, the virus has given more political ammo to those NIMBYs who have long opposed urban density and blocked the construction of more housing.
All is not lost. I do feel a renewed sense of pride and possibility about the Bay Area — the way our leaders responded to the virus did strengthen my faith in our local institutions, and we certainly seem better equipped to address long-term challenges than I once thought we were.
There might still be a window for substantive action: Our local governments can use the new leverage to push for bold ideas — among other policies, a plan for rent relief, rather than simply an eviction moratorium, so that more people don’t lose their housing.
I’m also waiting on the city’s billionaires to open up new floodgates of generosity, at least for mitigating the immediate pain of the crisis. Jack Dorsey, the chief executive of Twitter and Square, recently pledged $1 billion to coronavirus relief; but of the nearly 100 billionaires reportedly living in the Bay Area, only a handful have donated to the city’s coronavirus relief fund. Mary Kate Bacalao, the director of external affairs at Compass Family Services, a nonprofit group that helps homeless families, told me that with a few big checks, the Bay’s wealthiest could instantly make a difference.
But I wouldn’t be surprised if we — the people of the Bay Area, our lawmakers, our billionaires and our ordinary, overburdened citizens — end up squandering this moment. Rebuilding a fairer, more livable urban environment will take years of difficult work. It will require sacrifices from the wealthy. It will require a renewed federal interest in addressing the problems of cities. It will require abandoning pie-in-the-sky techno-optimism.
This isn’t a problem that will be solved by flying cars; it will be solved by better zoning laws, fairer taxes and, when we can make it safe again, more public transportation. We will have to commit ourselves to these and other boring but permanent civic solutions.
I’m hopeful we’re up to the task. We cannot go back to the way things were. But as the immediate danger of the pandemic recedes, it will be all too easy for many of us to do exactly that.
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The Coronavirus Is Rewriting Our Imaginations, by Kim Stanley Robinson (May 1)
What felt impossible has become thinkable. The spring of 2020 is suggestive of how much, and how quickly, we can change as a civilization.
This penetrating, lyrical article in The New Yorker magazine by celebrated speculative-fiction writer Robinson (Mars Trilogy, New York 2140 and many other works) offers cautious optimism that the new “structure of feeling” sparked by the pandemic might lead humanity to finally address climate change with full force.
The critic Raymond Williams once wrote that every historical period has its own “structure of feeling.” How everything seemed in the nineteen-sixties, the way the Victorians understood one another, the chivalry of the Middle Ages, the world view of Tang-dynasty China: each period, Williams thought, had a distinct way of organizing basic human emotions into an overarching cultural system. Each had its own way of experiencing being alive.
In mid-March, in a prior age, I spent a week rafting down the Grand Canyon. When I left for the trip, the United States was still beginning to grapple with the reality of the coronavirus pandemic. Italy was suffering; the N.B.A. had just suspended its season; Tom Hanks had been reported ill. When I hiked back up, on March 19th, it was into a different world. I’ve spent my life writing science-fiction novels that try to convey some of the strangeness of the future. But I was still shocked by how much had changed, and how quickly.
Schools and borders had closed; the governor of California, like governors elsewhere, had asked residents to begin staying at home. But the change that struck me seemed more abstract and internal. It was a change in the way we were looking at things, and it is still ongoing. The virus is rewriting our imaginations. What felt impossible has become thinkable. We’re getting a different sense of our place in history. We know we’re entering a new world, a new era. We seem to be learning our way into a new structure of feeling.
In many ways, we’ve been overdue for such a shift. In our feelings, we’ve been lagging behind the times in which we live. The Anthropocene, the Great Acceleration, the age of climate change — whatever you want to call it, we’ve been out of synch with the biosphere, wasting our children’s hopes for a normal life, burning our ecological capital as if it were disposable income, wrecking our one and only home in ways that soon will be beyond our descendants’ ability to repair. And yet we’ve been acting as though it were 2000, or 1990 — as though the neoliberal arrangements built back then still made sense. We’ve been paralyzed, living in the world without feeling it.
Now, all of a sudden, we’re acting fast as a civilization. We’re trying, despite many obstacles, to flatten the curve — to avoid mass death. Doing this, we know that we’re living in a moment of historic importance. We realize that what we do now, well or badly, will be remembered later on. This sense of enacting history matters. For some of us, it partly compensates for the disruption of our lives.
Actually, we’ve already been living in a historic moment. For the past few decades, we’ve been called upon to act, and have been acting in a way that will be scrutinized by our descendants. Now we feel it. The shift has to do with the concentration and intensity of what’s happening. September 11th was a single day, and everyone felt the shock of it, but our daily habits didn’t shift, except at airports; the President even urged us to keep shopping. This crisis is different. It’s a biological threat, and it’s global. Everyone has to change together to deal with it. That’s really history.
It seems as though science has been mobilized to a dramatic new degree, but that impression is just another way in which we’re lagging behind. There are 7.8 billion people alive on this planet — a stupendous social and technological achievement that’s unnatural and unstable. It’s made possible by science, which has already been saving us. Now, though, when disaster strikes, we grasp the complexity of our civilization — we feel the reality, which is that the whole system is a technical improvisation that science keeps from crashing down.
On a personal level, most of us have accepted that we live in a scientific age. If you feel sick, you go to a doctor, who is really a scientist; that scientist tests you, then sometimes tells you to take a poison so that you can heal — and you take the poison. It’s on a societal level that we’ve been lagging. Today, in theory, everyone knows everything. We know that our accidental alteration of the atmosphere is leading us into a mass-extinction event, and that we need to move fast to dodge it. But we don’t act on what we know. We don’t want to change our habits. This knowing-but-not-acting is part of the old structure of feeling.
Now comes this disease that can kill anyone on the planet. It’s invisible; it spreads because of the way we move and congregate. Instantly, we’ve changed. As a society, we’re watching the statistics, following the recommendations, listening to the scientists. Do we believe in science? Go outside and you’ll see the proof that we do everywhere you look. We’re learning to trust our science as a society. That’s another part of the new structure of feeling.
Possibly, in a few months, we’ll return to some version of the old normal. But this spring won’t be forgotten. When later shocks strike global civilization, we’ll remember how we behaved this time, and how it worked. It’s not that the coronavirus is a dress rehearsal — it’s too deadly for that. But it is the first of many calamities that will likely unfold throughout this century. Now, when they come, we’ll be familiar with how they feel.
What shocks might be coming? Everyone knows everything. Remember when Cape Town almost ran out of water? It’s very likely that there will be more water shortages. And food shortages, electricity outages, devastating storms, droughts, floods. These are easy calls. They’re baked into the situation we’ve already created, in part by ignoring warnings that scientists have been issuing since the nineteen-sixties. Some shocks will be local, others regional, but many will be global, because, as this crisis shows, we are interconnected as a biosphere and a civilization.
Imagine what a food scare would do. Imagine a heat wave hot enough to kill anyone not in an air-conditioned space, then imagine power failures happening during such a heat wave. (The novel I’ve just finished begins with this scenario, so it scares me most of all.) Imagine pandemics deadlier than the coronavirus. These events, and others like them, are easier to imagine now than they were back in January, when they were the stuff of dystopian science fiction. But science fiction is the realism of our time. The sense that we are all now stuck in a science-fiction novel that we’re writing together — that’s another sign of the emerging structure of feeling.
Science-fiction writers don’t know anything more about the future than anyone else. Human history is too unpredictable; from this moment, we could descend into a mass-extinction event or rise into an age of general prosperity. Still, if you read science fiction, you may be a little less surprised by whatever does happen. Often, science fiction traces the ramifications of a single postulated change; readers co-create, judging the writers’ plausibility and ingenuity, interrogating their theories of history. Doing this repeatedly is a kind of training. It can help you feel more oriented in the history we’re making now. This radical spread of possibilities, good to bad, which creates such a profound disorientation; this tentative awareness of the emerging next stage — these are also new feelings in our time.
Memento mori: remember that you must die. Older people are sometimes better at keeping this in mind than younger people. Still, we’re all prone to forgetting death. It never seems quite real until the end, and even then it’s hard to believe. The reality of death is another thing we know about but don’t feel.
So this epidemic brings with it a sense of panic: we’re all going to die, yes, always true, but now perhaps this month! That’s different. Sometimes, when hiking in the Sierra, my friends and I get caught in a lightning storm, and, completely exposed to it, we hurry over the rocky highlands, watching lightning bolts crack out of nowhere and connect nearby, thunder exploding less than a second later. That gets your attention: death, all too possible! But to have that feeling in your ordinary, daily life, at home, stretched out over weeks — that’s too strange to hold on to. You partly get used to it, but not entirely. This mixture of dread and apprehension and normality is the sensation of plague on the loose. It could be part of our new structure of feeling, too.
Just as there are charismatic megafauna, there are charismatic mega-ideas. “Flatten the curve” could be one of them. Immediately, we get it. There’s an infectious, deadly plague that spreads easily, and, although we can’t avoid it entirely, we can try to avoid a big spike in infections, so that hospitals won’t be overwhelmed and fewer people will die. It makes sense, and it’s something all of us can help to do. When we do it — if we do it — it will be a civilizational achievement: a new thing that our scientific, educated, high-tech species is capable of doing. Knowing that we can act in concert when necessary is another thing that will change us.
People who study climate change talk about “the tragedy of the horizon.” The tragedy is that we don’t care enough about those future people, our descendants, who will have to fix, or just survive on, the planet we’re now wrecking. We like to think that they’ll be richer and smarter than we are and so able to handle their own problems in their own time. But we’re creating problems that they’ll be unable to solve. You can’t fix extinctions, or ocean acidification, or melted permafrost, no matter how rich or smart you are. The fact that these problems will occur in the future lets us take a magical view of them. We go on exacerbating them, thinking — not that we think this, but the notion seems to underlie our thinking — that we will be dead before it gets too serious. The tragedy of the horizon is often something we encounter, without knowing it, when we buy and sell. The market is wrong; the prices are too low. Our way of life has environmental costs that aren’t included in what we pay, and those costs will be borne by our descendents. We are operating a multigenerational Ponzi scheme.
And yet: “Flatten the curve.” We’re now confronting a miniature version of the tragedy of the time horizon. We’ve decided to sacrifice over these months so that, in the future, people won’t suffer as much as they would otherwise. In this case, the time horizon is so short that we are the future people. It’s harder to come to grips with the fact that we’re living in a long-term crisis that will not end in our lifetimes. But it’s meaningful to notice that, all together, we are capable of learning to extend our care further along the time horizon. Amid the tragedy and death, this is one source of pleasure. Even though our economic system ignores reality, we can act when we have to. At the very least, we are all freaking out together. To my mind, this new sense of solidarity is one of the few reassuring things to have happened in this century. If we can find it in this crisis, to save ourselves, then maybe we can find it in the big crisis, to save our children and theirs.
Margaret Thatcher said that “there is no such thing as society,” and Ronald Reagan said that “government is not the solution to our problem; government is the problem.” These stupid slogans marked the turn away from the postwar period of reconstruction and underpin much of the bullshit of the past forty years.
We are individuals first, yes, just as bees are, but we exist in a larger social body. Society is not only real; it’s fundamental. We can’t live without it. And now we’re beginning to understand that this “we” includes many other creatures and societies in our biosphere and even in ourselves. Even as an individual, you are a biome, an ecosystem, much like a forest or a swamp or a coral reef. Your skin holds inside it all kinds of unlikely coöperations, and to survive you depend on any number of interspecies operations going on within you all at once. We are societies made of societies; there are nothing but societies. This is shocking news — it demands a whole new world view. And now, when those of us who are sheltering in place venture out and see everyone in masks, sharing looks with strangers is a different thing. It’s eye to eye, this knowledge that, although we are practicing social distancing as we need to, we want to be social — we not only want to be social, we’ve got to be social, if we are to survive. It’s a new feeling, this alienation and solidarity at once. It’s the reality of the social; it’s seeing the tangible existence of a society of strangers, all of whom depend on one another to survive. It’s as if the reality of citizenship has smacked us in the face.
As for government: it’s government that listens to science and responds by taking action to save us. Stop to ponder what is now obstructing the performance of that government. Who opposes it? Right now we’re hearing two statements being made. One, from the President and his circle: we have to save money even if it costs lives. The other, from the Centers for Disease Control and similar organizations: we have to save lives even if it costs money. Which is more important, money or lives? Money, of course! says capital and its spokespersons. Really? people reply, uncertainly. Seems like that’s maybe going too far? Even if it’s the common wisdom? Or was.
Some people can’t stay isolated and still do their jobs. If their jobs are important enough, they have to expose themselves to the disease. My younger son works in a grocery store and is now one of the front-line workers who keep civilization running.
My son is now my hero: this is a good feeling. I think the same of all the people still working now for the sake of the rest of us. If we all keep thinking this way, the new structure of feeling will be better than the one that’s dominated for the past forty years.
The neoliberal structure of feeling totters. What might a post-capitalist response to this crisis include? Maybe rent and debt relief; unemployment aid for all those laid off; government hiring for contact tracing and the manufacture of necessary health equipment; the world’s militaries used to support health care; the rapid construction of hospitals.
What about afterward, when this crisis recedes and the larger crisis looms? If the project of civilization — including science, economics, politics, and all the rest of it — were to bring all eight billion of us into a long-term balance with Earth’s biosphere, we could do it. By contrast, when the project of civilization is to create profit — which, by definition, goes to only a few — much of what we do is actively harmful to the long-term prospects of our species. Everyone knows everything. Right now pursuing profit as the ultimate goal of all our activities will lead to a mass-extinction event. Humanity might survive, but traumatized, interrupted, angry, ashamed, sad. A science-fiction story too painful to write, too obvious. It would be better to adapt to reality.
Economics is a system for optimizing resources, and, if it were trying to calculate ways to optimize a sustainable civilization in balance with the biosphere, it could be a helpful tool. When it’s used to optimize profit, however, it encourages us to live within a system of destructive falsehoods. We need a new political economy by which to make our calculations. Now, acutely, we feel that need.
It could happen, but it might not. There will be enormous pressure to forget this spring and go back to the old ways of experiencing life. And yet forgetting something this big never works. We’ll remember this even if we pretend not to. History is happening now, and it will have happened. So what will we do with that?
A structure of feeling is not a free-floating thing. It’s tightly coupled with its corresponding political economy. How we feel is shaped by what we value, and vice versa. Food, water, shelter, clothing, education, health care: maybe now we value these things more, along with the people whose work creates them. To survive the next century, we need to start valuing the planet more, too, since it’s our only home.
It will be hard to make these values durable. Valuing the right things and wanting to keep on valuing them — maybe that’s also part of our new structure of feeling. As is knowing how much work there is to be done. But the spring of 2020 is suggestive of how much, and how quickly, we can change. It’s like a bell ringing to start a race. Off we go — into a new time.
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Freedom or Protection in Times of Plague — Some Reflections on the Swedish Covid Policy, by Thomas Sterner (April 24)
University of Gothenburg economist Thomas Sterner published this essay in the Collège de France under the title, “Liberté ou confinement en temps de peste.” Prof. Sterner has published more than a dozen books and a hundred articles in refereed journals, mainly on environmental policy instruments with applications to energy, climate, industry, transport economics and resource management in developing countries. With Gunnar Köhlin, he founded the Environment for Development Initiative. Sterner is a recipient of the Myrdal Prize and a past president for the European Association of Environmental and Resource Economists.
« Mais le bien public est fait du bonheur de chacun. » Albert Camus
« But the public good is made for everyone’s happiness. »
Among the most interesting questions posed by the pandemic is how to forge a viable path between the collective and the individual, between freedom and responsibility. I feel deeply divided. On the one hand, environmental economics has taught me a deep respect for public goods. I think we should take external effects seriously. I am one who believes we should protect our grandchildren’s right to a clean atmosphere and force people and companies to take responsibility for their carbon dioxide emissions. After all, we might contribute to causing children to drown in Bangladesh by the end of the next century…. Of course, I also think that we should do everything possible to not infect others — and even do everything we can to support emergency care units in these times of crisis.
Thus, we have a responsibility not to become infected ourselves. During a crisis in the health care system, it is not just my business if I fall ill or not. Naturally, I think you have to accept restrictions on our freedom and comfort, even on our income and our desire to sit in a cafe too close to our friends. Nevertheless, I feel deeply uneasy about having the police check whether citizens walk with a member of the household or possibly a close friend?
Difficult to evaluate
Most citizens still seem to support their respective governments in different countries. There are many ways to interpret this. I do not want to fall blindly for the temptation to defend the Swedish policies. If we end up with disease and more deaths and a health care system strained beyond hope and into chaos, then our liberalism will have been proven fatally naive.
At the same time, I want to point out that I am very careful about not drawing conclusions too fast. The basic process in the initial spread of the virus is exponential growth. It does not take much mathematical insight to realize that it is difficult to compare the number of deaths per million inhabitants in different countries. It is very difficult to know what the results of different strategies are, given that the time dimension is so dramatically important. A difference of a week or two in the process can mean a huge great difference in the number of patients or the number of deceased. Of course, socio-economic and cultural factors are also of great importance: how close to each other you live and travel, whether you kiss each other on the cheek and whether you live together over the generations.
Still, this issue is already hotly debated. Sweden may indeed have fewer cases and deaths than France or Italy, but it has more than neighboring countries which is perhaps the best comparison. As I said, we must be very careful for the reasons I stated above. In addition, one must take a long run view: if a country has less death rates, this can be temporary. The question is how and if there will be a second wave and when or if vaccines become available. Finally, we measure differently, test to very different extents and register the deaths outside the healthcare completely differently. This may be the case, for example, for elderly patients who die and have a cough, but have not been tested. This can play a very important role. We have a lot of regional variation. Large parts of Sweden have a similar spread to our neighboring countries — it is mainly Stockholm that has significantly more cases. The differences between regions are so great that it contradicts the idea that national strategies would be a key determinant. Maybe population density is more important?
Cold and empty: Swedes are already experts on social distancing
One should not exaggerate the differences between the measures in Sweden and, for example, France. Sweden is already characterized by a fairly high degree of “social distancing” in normal circumstances. We have low population density, mainly small cities, and social norms with relatively little human crowding. We have a cold climate (at least during months like February, March and April many prefer to stay indoors), and also a culture of equality, a high level of education and a well documented trust in authorities. These factors probably lead to lower risk in a country like Sweden compared to the Netherlands or England. The fact that people trust authorities and largely follow advice also means that the public authorities do not need to use very coercive measures.
Decentralized, science-based and expert-driven
In the United States, President Trump holds an hour-long press conference every day while Dr. Fauci stands in the background. In Sweden, a public health expert holds the entire press conference with his colleagues.
Axel Oxenstierna (AO) was Chancellor of the State and in practice regent in the 17th century and is said to have founded the strong Swedish public administration. (It could be mentioned in passing that he and Cardinal Richelieu were the hub of the coalition against the Habsburgs during the Thirty Years’ War, and negotiated with each other in Compiègne outside Paris. Richelieu wanted to speak French, Oxenstierna replied that he would then speak Swedish — so they decided on Latin.) AO designed a strong state administration with considerable power for regional and local government and with a well trained civil service.
Sweden still has a uniquely strong decentralization. For example, almost all income tax is decided and managed at the municipal level. “Ministerial rule” in Sweden is a sin. Ministers (including the prime minister) are only supposed to lay down general principles and are expressly forbidden from deciding individual cases — which are to be decided by government officials. (Trump once called Prime Minister Löfven and wanted him to pardon and release the American rapper ASAP Rocky, and could not understand when Löfven said that he could not possibly meddle into such a case). It is difficult to generalize on constitutional issues but it seems that Sweden has a uniquely high degree of decentralization, expert and administration control. At the political level, Parliament also has relatively more power compared to the government (especially as we now have a weak minority government).
So part of the reason the Swedish state has not acted more resolutely with lock downs may be that the government did not feel it had very clear authority to act. It seems we were not legally well prepared and did not have the ability to declare a sufficiently strong state of emergency in peacetime. The main reason for the relatively soft-spoken policies is probably that the decision makers wanted to educate and convince citizens rather than order or force them. The experts who made the decisions or in any case had a considerable influence over them believe that this strategy is more sustainable if the pandemic lasts for a long time (Tegnell 2020).
The Swedish debate
We should not exaggerate the differences between countries. The Swedish strategy also involves restrictions and social distancing. Universities and (senior) schools are closed but not elementary or preschools. Cafes remain open but have instructions to be less crowded than usual. The construction industry continues, companies make their own decisions, they (like Volvo) are more often closed due to a collapse of global supply chains rather than because of political decisions.
Personally, I spend almost all my time at home! But I don’t complain because I enjoy working 12 hours a day on the sofa with my computer. In fact, I also have the opportunity to go out and meet my friends, my children and my grandchildren and take a walk in the park.
All in all, the Swedish authorities enjoy a fairly high level of support, which does not mean that there is no debate. A few days ago, 22 prominent medical researchers wrote a very critical article in the largest Swedish daily newspaper, claiming that the country’s politics were a failure, that the deaths were too high compared to the Nordic neighboring countries. However, the debate that followed was very critical of this article and emphasized that they had cherrry-picked their examples and data that favored their views and that their analysis was therefore biased. Still there are also others who are critical concerning the relatively lax shutdown. Assuming it is correct that we did less damage to the economy but suffered somewhat more cases of illness and death then the evaluation of this will probably depend on how fast a vaccine (or cure) becomes available. If this is very soon then we may have had unnecessarily many deaths. If on the other hand the vaccine/cure takes years then we may have a very large benefit of having achieved partial herd immunity faster than others. It is probably too early to say.
In any case, it seems that Sweden, like other countries, has made some clear mistakes. To name a few: we did not test enough people, the authorities reacted too late and did not always succeed in communicating in an educational or transparent way, serious mistakes were made in the protection of the elderly and shortcomings in the care staff’s skills and protective equipment explain the large number of people who are infected and die among our elderly. Some debaters see this development as a consequence of waves of deregulation and privatization in the elderly care sector. Finally, the authorities have also been slow to close a couple of skiresorts and information for newly arrived migrants has been inadequate.
Swedish hospitals have no doubt been under heavy pressure, but are still far from the chaotic situation in northern Italy. Even in Stockholm, it is said that there is still available (spare) capacity in intensive care. Anecdotally, however, it seems however that one must be much sicker to be admitted to the intensive care units now than in ordinary times. Definitive assessments will have to wait extensive comparative studies in the future.
It is also premature to assess the effects of the measures taken to counteract the adverse economic consequences of the pandemic. Among the positive points, it is generally argued that Sweden is well equipped to cope with economic crises thanks to, among other things, rapid and fact-based decision-making, experts with influence and a broad consensus based on social dialogue. In this crisis, politics has been characterized by broad political consensus. While the United States unemployment rate raised by 22 million in four weeks, measures for lay-offs were quickly negotiated in Sweden (and in many European countries), as well as tax cuts (employer contributions, VAT, rents, etc). Similarly, various forms of support for households and businesses were implemented reasonably fast. Measures taken like layoffs are progressively implemented and shaped through a developed social dialogue, based on negotiations between the state, trade unions and employers. This has helped minimize financial damage, but again there are of course also critical voices (from opposition parties).
The authoritarian threat
The current crisis has horrific consequences. Naturally, exceptional measures may be justified including restrictions on individuals for the benefit of society. However, one must be very vigilant. Crises also offer opportunities for evil forces. The Mafia has strengthened its positions in Italy. Some leaders gladly take the chance to postpone elections, postpone trials or even enact laws to increase their own executive power. Even before this pandemic, authoritarian trends were on the rise in several countries. The development of modern technology, GPS tracking of the individual, tracing of mobile phones and face recognition through surveillance cameras, offers unmatched opportunities for political leaders or movements that are in some cases openly xenophobic and fascist. Orwell and Huxley have never been more up-to-date.
We need to be extremely careful as these movements can develop very quickly. There is a demand for public action, but it is far better to make forceful and well grounded decisions like strengthening research or public hospitals or reducing the number of home care providers that visit each elderly person and providing them with adequate training and protection than to order the police to check the general population and fine those who are not carrying the correct forms or documents.
Of course, our everyday freedom may need to be restricted, but it must be done with great caution and for a limited time. The economy must recover, and here too, transparency and social justice must guide the use of public resources. Huge sums of money are being spent in a very short period of time and there is a clear risk that they will be spent corruptly or inefficiently and mainly benefit the rich and those who have the best lobbyists. I have written in other contexts (Financial Times, Nature Sustainability Blog) about the importance of not wasting all the the public funds should on save oil companies and airlines. Trump is trying to save his friends’ investments by talking up the international oil prices. He has almost made the USA an OPEC member – at least in practice: The US has promised to lower oil production to help the oil cartel. This is deplorable. Instead, we should quickly introduce a global tax on fossil fuels that could not only help boost public finances but promote the necessary transition to sustainable development based on renewable energy.
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From Climate to Covid, and Back Again, by Andrew Ratzkin (May 2)
In this op-ed published in the Albany Times-Union as Virus’ collective threat, the author, an energy-sector lawyer who serves on the Westchester County Climate Smart Communities Task Force, draws lessons for climate challenges from the Covid pandemic.
No one’s talking much about climate change lately. We have a lot on our minds.
But climate’s not going away as an issue, even though emissions have temporarily dropped steeply. The climate will not stop warming, and spillover effects will not stop coming, just because we are distracted dealing with coronavirus.
The coronavirus was not caused by climate. Still, there are important things we can learn from the virus, and maybe have already learned, that can make a difference in how we approach climate once we are again able to focus on other things.
The coronavirus’ spread and impact reveal critical shortcomings in our preparedness, and offer important lessons, directly relevant to the climate challenges to come:
Cognitive Dissonance and Magical Thinking. It’s hard to envision and take seriously things that seems distant and intangible. It’s harder still to confront a long-term, collective threat from an inanimate adversary, especially while you’re still comfortable.
Like climate change, a pandemic once seemed to many like something that was “never going to happen” — until it did. Coronavirus awakens us to the possibility that bad things (and worst case scenarios) can actually happen. Long-term things eventually become short-term, immediate things.
Facts Matter, Science Matters. Science can tell us stuff. Science helps us detect and solve actual problems. Self-serving or delusional spin can actually hurt us, even though bravado makes for good TV. Spin — believing it and acting on it — is dangerous.
Expertise Matters. We need to listen to people who have studied problems that are not obvious without study. We don’t have to uncritically accept everything experts tell us. But we should respect them, hear their analyses and warnings, and factor them into our decisions.
Prevention Matters, Preparedness Matters. We hear how expensive it is to control greenhouse gas emissions, to convert our economy so that it is not powered by fossil fuels, to build a climate-resilient infrastructure. Just like we’ve heard how expensive it was to maintain the pandemic unit at the National Security Council. But maybe we have learned that the cost of an exacerbated crisis far exceeds the cost of reckoning with one ahead of time.
Follow-on Effects Happen. The coronavirus caused stocks and the economy to crash. It will cause untold cultural changes. What do we think will happen when climate change really starts to bite? And, unlike coronavirus, climate effects won’t present as a short-term, albeit painful, blip. When climate change hits in a big way — say, the irreversible flooding of a major city — what will be the follow-on effects for the stock market, the economy, mass migration, conflict? Consequences can be as severe, or more so, than the initial cause.
Some Problems Are Global. If coronavirus couldn’t be prevented from reaching our shores, what about changes in the climate? Global problems require global solutions and international cooperation.
Politics Can Change Fast. Look how fast the Trump administration shifted from denying that the coronavirus was anything more than a liberal media hoax to relishing a “wartime” presidency. Look how fast the Republican Senate became a hotbed of Keynesianism.
Maybe, just maybe, the suspicion that, just like coronavirus, climate is not a hoax after all, nor a conspiracy serving a political agenda, will open some minds. Maybe more will listen to calls to redouble our efforts to prevent as much of the impending climate crisis as we can, and to take measures needed to prepare for what we can’t. For now, for the most part, climate change is still out there as something that will happen “one day.” But that day will arrive, when something happens so terrible that everyone will at last know it’s for real. When that day comes, will we be ready?
Of course, the climate crisis won’t actually arrive “one” day. It’s already here, if not quite yet in a form — despite wildfires, dying coral reefs, melting glaciers, changes to planting seasons, more frequent and extreme hurricanes, droughts and deluges — that evokes universal recognition.
The coronavirus will one day be behind us; the warming already baked into the atmosphere will make itself felt for decades and centuries. In that key sense, climate change is very different.
Note: We’ve revised this post to reflect an April 15 update from Carbon Brief in which it raised its CO2 reduction projections for 2020. More details appear at end of post. — C.K., April 29.
A new post this week from Carbon Brief’s Dr. Simon Evans, Coronavirus set to cause largest ever annual fall in CO2 emissions, projects a 5-6 percent fall this year in worldwide emissions of carbon dioxide from last year’s level on account of the coronavirus.
Dr. Evans is highly regarded for his analyses of global energy trends, and his new post does not disappoint. His projections, shown at left, draw on what he calls “five key datasets and projections covering roughly three-quarters of the world’s annual CO2 emissions, including the entire output of China and the US, the EU carbon market, the Indian power sector and the global oil sector.” Those sectors’ projected reductions, shown in the rust-red bar near the top, sum to around 2,000 million metric tons, equivalent to 5.5 percent of the 2019 worldwide total.
The five trailing blue bars in the Carbon Brief graphic underscore the prospective downturn’s unprecedented extent. They denote actual reductions during traumatic world events, from the 1919 Spanish flu pandemic and the 1945 close of World War II to the 2009 financial crisis, which shows the smallest emissions drop. Using tons of decline as the metric — after all, the climate system responds to tonnages of CO2, not percentage changes — none of the earlier five contractions rivals Carbon Brief’s projected 2020 downturn. The closest is the 845 million tonne reduction in 1945, caused not just by the collapse of economic activity in defeated Germany and Japan but also by the battered economies of victor states such as the Soviet Union and the United Kingdom.
Last month, we at Carbon Tax Center published a post estimating that global emissions this year could plunge by as much as 7,640 million metric tons from their business-as-usual level. That would be nearly four times as great a reduction as the 2,000 million tonne drop in Dr. Evans’ Carbon Brief post, a huge gap but one largely explainable by these differences between our respective approaches:
- Carbon Tax Center’s figures are in Btu’s, a good but imperfect proxy for carbon emissions, whereas Carbon Brief employs CO2 directly.
- CB’s calculations omit sectors outside of its “top five,” which account for 24% of worldwide carbon emissions.
- CB conservatively applies its estimated reductions to a 2020 baseline that would have exceeded 2019 emissions by 1,000 million tonnes, effectively handicapping its 2020 reductions.
- CB chose to base its top five sector reductions on official, and necessarily conservative, sources such as the U.S. EIA, the IEA, and CB’s own mid-Feb. analysis of China’s CO2 reductions.
- CTC took a deliberately aggressive approach to estimating reductions in order to stake out an outer limit.
We add this sober warning from Dr. Evans’ post:
To put the potential 2020 coronavirus effect in a broader climate context, it is worth adding that global emissions would need to fall by more than 6% every year this decade – more than 2,200MtCO2 – in order to limit warming to less than 1.5C above pre-industrial temperatures. (This figure is based on the 2018 Intergovernmental Panel on Climate Change (IPCC) special report, which found that global emissions in 2030 needed to be 45% below 2010 levels, in order to limit warming to 1.5C.)
It should go without saying that the forced nature of the 2020 emissions contraction disqualifies it as a model for going forward. Nevertheless, surpassing, even under great duress, and even for just one year, the recurring 2,200 million tonne per year contraction cited as essential by Carbon Brief, is not to be sneezed at.
A useful way to think about CTC’s “extreme” 7,600 million tonne estimate is that it would buy the world three to four years worth of the 2,200 Mt reduction otherwise needed each year to the next … and that in 2023 or 2024 worldwide emissions would need to fall, from the reduced level, by 2,200 million tonnes each year, to get onto the IPCC trajectory for keeping warming to less than 1.5C.
Point being: while Covid-19 is not how the world should have started down the road to reducing emissions, it has gotten our attention and is, at least, a start.
Carbon Brief’s April 15 amendment to its original April 9 post (linked to at the top of our post) reads: Update 15 April 2020: This analysis was updated in light of new forecasts for global oil demand in 2020, which suggest a significantly larger drop this year. The original version had put the potential impact of coronavirus at 1,600MtCO2 in 2020, equivalent to 4% of 2019 emissions.
[NB: This post is co-authored with Christopher Ketcham. A slightly different version was published earlier today in The Intercept under the headline “What The Coronavirus Pandemic Can Teach Us About The Climate Emergency.”]
Greta Thunberg couldn’t do it. Bill McKibben and 350.org couldn’t do it, and neither could the Paris climate accord. But Covid-19 is cutting human-caused emissions of carbon dioxide and other greenhouse gases as travel and other economic activity in much of the world slow or halt altogether.
While the contraction in CO2 emissions set off by the virus may not be as pronounced as the related though distinct fall in “conventional” pollutants like soot and smog, it is far more consequential. Soot and smog poison and kill only in the present, while greenhouse gases stick around to maim the climate for the next century. Burning a fossil fuel today is tantamount to signing a death warrant for future generations. Conversely, forgoing an action that would have caused a fossil fuel to be burned creates a permanent benefit.
Until now, the only downturn of note in total worldwide CO2 emissions during the era of climate awareness — defined as the period beginning in 1995 with the first U.N. Climate Change Conference — was in 2009, the onset of the Great Recession. That downturn was brief and mild.
In contrast, the current contraction could be severe enough to cut in half this year’s addition to the atmosphere’s carbon dioxide concentration — the metric that dictates climate change — according to calculations by co-author Charles Komanoff for the Carbon Tax Center.
Is it cruel to point approvingly to the steep reduction in carbon emissions now unfolding, given the skyrocketing deaths, lost livelihoods, and widespread privation? And won’t the reductions be negated as the virus is tamed and emissions come roaring back? No and no.
Like so much else, whether or not the current reduction in CO2 is sustained will depend on who gets to reconstruct society after the virus. But the reduction will not be negated. Just as carbon emissions persist long enough in Earth’s upper atmosphere to act as permanent climate change agents in terms of one individual’s lifetime, avoided emissions are a permanent balm.
The airplane trips you won’t take this year won’t be made up in 2021, for the simple reason that most people who use airplanes do so regularly. A missed trip isn’t a once-in-a-lifetime experience that will be put back next year; it’s a missed trip, period. Ditto for work commutes and leisure activities.
So yes, the precipitous drop in burning petrol for vehicles and aircraft has a lasting imprint. The contraction of the U.S. economy this year could purge 30 to 40 percent of carbon emissions we would otherwise spew. Similar but milder jettisoning of carbon-burning in the rest of the world could collectively trim up to one part per million from the atmosphere’s present 415 ppm concentration of CO2 — a modest climate-protective achievement, to be sure, but one without precedent in the modern era.
The suffering is a different story. Were a happiness/misery calculator able to quantify the pluses and minuses to well-being from events befalling human society, the coronavirus’s flattening of the rising CO2-in-the-atmosphere curve would obviously be swamped by the lost life and the disordering of business as usual.
And yet business as usual must come to an end if we are to hand down a livable planet to our children.
The rub is how to slash carbon emissions with minimum suffering and maximum social and economic justice, and without nature forcing the reductions on us via pandemics or other chaotic black swan events that are surely in store.
The fact that human behavior and activity are undergoing climate-beneficial changes in the crucible of Covid-19 suggests that “business as usual” can be altered, and quickly. Though we can’t yet point to new models of planned and equitable carbon reduction, there are four identifiable pandemic-driven upheavals of social consciousness that should give us hope of instituting the transformations necessary for civilization not to commit collective climate suicide.
One is that science’s prestige and value are being restored. Americans watching Trump’s circus-like coronavirus daily briefings see National Institutes of Health immunologist Dr. Anthony Fauci stepping in to correct the president’s dangerously ignorant commentary. Similarly, we know it is the community of front-line doctors, nurses, and health care workers who will care for the sick; the epidemiologists and science journalists who will inform the public’s response; and trained chemists, biologists, and statisticians who will synthesize and prove the vaccines that will bring the pandemic to an end. As environmental legal scholar Michael Gerrard wrote last week, the climate change lessons of Covid-19 are to heed the warnings of scientists, do everything possible to minimize the hazards they predict, and prepare to cope with the impacts that remain.
Second, the crisis is helping us see just how much our well-being depends on muscular, proactive governance. Government of the people and for the people is literally the thing that’s now needed more than ever. The people must be sovereign over corporations and not vice versa — a point driven home by the tepid response of big business to Trump’s exhortations to step up manufacture of equipment to protect health care workers.
Third, we may be shaking loose the defeatism that nothing can be done quickly. Take the example of those of us sheltering in place: We are learning, overnight, that simplicity isn’t necessarily austerity, frugality need not be privation, and that we can forgo quite a lot of our leisure and consumer entitlements if it serves some higher purpose — at present, to stop the sickening and death of our fellow human beings; in the longer run, to bend the rising curve of carbon emissions and put a hard stop on climate chaos.
Moreover, if our society can act, finally, to manufacture a million ventilators and a billion protective masks, surely we can within a few years act on a far grander scale to erect, say, a million wind turbines, insulate and solarize a hundred million buildings, carve ribbons of bicycle paths throughout our cities and suburbs, and so on. With the pandemic enforcing a brutal but necessary reset, the NIMBYism that has impeded this kind of progress practically everywhere might be swept into the dustbin for good.
My well-being depends on your not being sick. My ability to be fed depends on your ability to grow and transport and distribute food. My life is now literally in your hands, as you make decisions whether to restrain your activity in the public sphere, keep your distance, self-quarantine.
If we so fully need each other, how can I abide your not having affordable health care? In this moment when the precarity of half or more of American households is laid bare, how can I abide a government that places the well-being of billionaires — whose wealth each week generates more money than many of us earn in a lifetime — above that of the 90 percent of Americans who make less than $100,000 a year?
What does solidarity have to do with climate? Everything. People whose health is tenuous and whose pocketbook is empty can’t easily stand up for climate action, but they may do so if government has put them on a solid footing and, in the Green New Deal, provided a framework for paying them good wages to actually implement it.
Synergies abound. With the U.S. government providing direct payments to American households, it’s only a step or two to paying coal miners and cattle ranchers to become solar installers and wind farm maintainers. Enacting some form of guaranteed income, even just temporarily, could pave the way for the “carbon fee and dividend” approach to taxing carbon fuels without further burdening the less well-off. In a different vein, trading frenetic foreign travel for staycations could downsize socially destructive companies like Airbnb, making rental apartments more affordable and in turn diminishing long-distance commuting and slashing carbon footprints.
As for the super-rich, never have their fortunes been so fully revealed as hollow and corrosive. Worldwide, the wealthiest 5 percent of households collectively burn more carbon than the entire bottom half, according to a comprehensive new report from the University of Leeds. Could the past decade’s research and agitation on economic inequality now culminate, in the pandemic’s wake, in an insistence on transmuting extreme private wealth into a new collectively shared wealth of renewable energy and sustainable communities?
Table presents the calculations and assumptions underlying Carbon Tax Center’s assertion that economic disruption from the pandemic could cut 1 ppm from atmospheric CO2. For fuller discussion, follow link from “calculations” higher up in the text.This, more than fossil fuel divestment or class-action litigation, is the kind of program that will actually cast off the yoke of the fossil fuel empire upon which the portfolios of the super-rich depend. In the process, the toxic aspiration to join the super-rich could be swept aside. Bye-bye, lusting after commuter helicopters. Bye-bye, hungering for one’s own island. Bye-bye, legislatures purchased by dark money.
As for those in the rarified upper classes who, in Margaret Thatcher’s iconic phrasing, embrace the libertarian right-wing precept that “there is no such thing as society,” let’s hope they will be answered by the millions of commoners who see clearly, as the pandemic rages, that we are all in this leaky boat together.
Charles Komanoff, a New York City-based economist and activist, directs the Carbon Tax Center. Christopher Ketcham, an upstate New Yorker, is author of “This Land: How Cowboys, Capitalism, and Corruption are Ruining the American West.”