(Daniel Lazare is a writer living in New York City; his books include The Frozen Republic, The Velvet Coup, and America’s Undeclared War.)
Naomi Klein is not exactly bubbling over with enthusiasm about a carbon tax, and since she has emerged as a leading voice on climate change, it’s worth exploring why. She barely mentions the topic in This Changes Everything: Capitalism vs. The Climate, her magnum opus on global warming, and was oddly dismissive in a recent interview with Grist. “I don’t think a carbon tax is a silver bullet,” she said, “but I think a progressively designed carbon tax is part of a slate of policies that we need to make this transition … [to] rapid renewables.” But then she went on to disparage the analysis that is at the core of the carbon-tax argument:
You know, I’ve been making these arguments around economics, but there is nothing more powerful than a values-based argument. We’re not going to win this as bean counters. We can’t beat the bean counters at their own game. We’re going to win this because this is an issue of values, human rights, right and wrong. We just have this brief period where we also have to have some nice stats that we can wield, but we shouldn’t lose sight of the fact that what actually moves people’s hearts are the arguments based on the value of life.
So on one hand we have economics, the stuff of “bean counters” and other bloodless sorts, while on the other we have values and morality. A carbon tax would be beneficial, but since we will never beat the economic analysts on their own turf, there’s no point even trying. Instead, we should concentrate on things that stir the soul, such as human rights.
Or so Klein maintains. But there’s something off-putting about such arguments. The distinction between economic analysis and morality, for instance, smacks of anti-intellectualism. Not only are head and heart separate and distinct in Klein’s world, but there’s no question as to which is on top. But her view of a carbon tax is also incorrect. It’s not for bean counters only. Like any real-world phenomenon, a carbon tax is multi-dimensional, which means that it has not only an economic component but a political and moral aspect as well.
How so? Everyone knows what the purpose of a carbon tax is. It’s to internalize the externalities, to take the growing costs associated with fossil fuels and bundle them into the price of such fuels so that the individuals using them have a more accurate idea of how much a specific activity truly costs. When drivers understand how expensive gasoline really is when all the attendant costs are taken into account, then they’ll treat it with the respect it deserves.
This is the sort of economic wonkery that no doubt leaves Klein cold. But it is not only an economic argument. Externalities include not only environmental and congestion costs and the like, but such items as the cost of insuring an uninterrupted flow of oil from the Persian Gulf. Expenditures like these aren’t trivial, needless to say. Indeed, one study published in Energy Policy puts them at a stunning $7 trillion for the years 1976-2007, not including the Iraq War, which, according to Joseph Stiglitz and Linda Bilmes, may wind up costing $3 trillion more.
This is a political externality as much as an economic one. If we agree, moreover, that the invasion of Iraq was fundamentally about oil, then there is another external cost to consider, that of lost lives. This includes not just the 4,500 U.S. servicemen killed since 2003, but a half million or more Iraqis. Klein, curiously enough, made no mention of the spiraling conflict in the Middle East in either This Changes Everything or her Grist interview, yet it’s as much a consequence of unconstrained fossil-fuel use as is global warming. But if we adjust fuel prices to reflect the growing human wastage that carbon addiction causes, then it becomes clear that a carbon tax is not just an economic or political instrument, but a moral one too.
Economics, politics, and morality are different ways of approaching the same problem. They are not antagonistic as Klein seems to think, but complementary and mutually supporting. Whether or not a carbon tax is a silver bullet, it’s a means of attacking over-reliance on fossil fuels on all fronts simultaneously. That doesn’t make it a magic wand that will wave all such problems away. But it’s one of those elegantly simple ideas – like one person-one vote or liberté, egalité, fraternité – that easily roll off the tongue yet are politically explosive. That’s their beauty since they require that society be turned upside down before such a basic principle can be implemented. And what can be more soul-stirring than that?
Photo by Ed Kashi, courtesy of Grist.
Thank you for writing this. I’ve felt the same way, in great admiration of Naomi Klein for the most part, and the this frustrated alienation when she speaks about a carbon fee and rebate in ways that make it clear she doesn’t fully “get it” in terms of the power and importance of connecting morality to the market as a carbon tax does. Both the struggle for a carbon tax, and the tax itself, are game changers, if fully embraced and understood and communicated to the people.
Jodiah Jacobs says
It is my experience that many, many environmentalist are clueless when it comes to carbon tax. As a person who’s deeply concerned by climate change I think this is an area we need to focus on. Went to last time you went to a rally and hurt someonetalking about the carbon tax? Very rarely will you hear that. Also, it takes time to absorb the concept of Putting a fee on Carbon. At first it seems like a pie in the sky dream. We need to get more people thinking and talking about a carbon fee, so they can digest the concept (and the implication of not putting a fee on carbon) and embrace it. Carno has very real hidden costs. We can point to sea level rise and valuable real estate as an example. These costs will be paid.
We need people to understand in systems terms the simple idea of the carbon rebate. You tax the carbon and recycle the money. This washes the system of fossil fuels at a steady rate, by ramping up the carbon fee every year (and of course, the dividend too).
len botterill says
Agree. By putting a price on carbon we let our communities see the true cost of making various energy sourcing decisions. It shows the value to us in reality of utilising alternative sources of energy. In fact l would argue that it is immoral not to tax carbon. All we are doing in not taxing carbon is to deceive ourselves about what the costs of surviving on the planet really are. And since we give billions of dollars in subsidies to the fossil fuel companies around the world to mine, frack and pump already, would we want to give them an unbelievably easy ride at the over end of the production process as well? I think not.
It is a social harm to burn fossil fuels, contributing to the degradation of our environment. Therefore, although we cannot humanely shut them down full stop, we can reduce their use steadily, in full stewardship of the Earth we have been entrusted with.
Paul Price says
The article and the comments to date are fair enough but the critique of Klein is missing the entire point of her book and the point of pricing carbon – stopping global warming. The only way to do this, as IPCC clearly state, is to stop nett carbon emissions entirely and very quickly given the rate at which the 2ºC carbon budget is being exhausted.
Putting a price on carbon may be part of the solution but it is far from sufficient, especially if a hard cap on future emissions is not in place. Kevin Anderson spells out why a carbon tax is not enough very well here http://kevinanderson.info/blog/why-carbon-prices-cant-deliver-the-2c-target/
In short, a carbon price can always be paid by the wealthy yet the 10% per annum cuts in emissions by wealthy countries now needed require far deeper societal and cultural change, exactly as Klein argues. Twenty years ago a carbon tax might have set us on a path to safety but that is no longer the case. We have to wake up to this reality fast.
I read the Kevin Anderson piece, and it lacks logic. His criticisms all fall short of actually understanding the thing itself, which is a precondition for criticizing something, i think. It’s very strange, as if he lives in a discursive universe that doesn’t include money or basic economics. I will quote a key paragraph of his, and then comment on it:
“” This catastrophic and ongoing failure of market economics and the laissez-faire rhetoric accompanying it (unfettered choice, deregulation and so on) could provide an opportunity to think differently about climate change. Early signs of such a paradigm shift are already evident. As Alan Greenspan, former head of the US Federal Reserve and a pivotal figure in the economic orthodoxy revealed, he was “in a state of shocked disbelief ” at having “discovered a flaw in the [free market] model”.8 This is not just a minor flaw; it undermines a central tenet (self-regulation) of the laissez-faire ethos. It is to market economics what Copernican heliocentrism was to Ptolemaic astronomy. “”
See, here he conflates market economics with laissez-faire agenda. Market economics does *not* need imply a laissez-faire agenda, and such agenda is never even genuine, because the market admittedly embodies at least some basic ethics (such as “don’t kill people” and “keep your contractual word”) and often some more advanced ethics (like “don’t pour your toxic waste directly into the river”). He is conflating money with lack of ethics. The market can be made more ethical, in a very simple way in this case, and that’s the point of a carbon fee. Nobody in their right mind is saying that the neoliberal agenda is wonderful. On the contrary, we are opposing the neoliberal agenda by demanding ethics be built into the market to address the climate crisis.
A carbon fee and rebate is an adjustable tool, with no real hard upper limit. I mean, the rate of the fee affects the rate of transition, and there would be huge qualitative differences between a $10/ton and $60/ton carbon fee. The higher the fee, the faster the transition. The higher the fee, the more disruptions will occur, leaps from one process or product to another, substitutions rather than marginal changes. It’s a continuum, and at the lower rates, there would be more marginal changes, and at higher rates of a fee, the more big changes would be made, and more rapid innovation of economic relationships.
Don Matheson says
While I agree that the carbon rebate is not sufficient by itself, I strongly believe that it is, in the tax and rebate form, the most palatable giant step in the present political landscape. We have to stop burning more, begin to burn less, pass milestones of 10% reduction, then 20, etc. before we can get to zero. People are more likely to do the right moral thing, if they can be taught that the economic cost is lower than they thought. Success breeds success. One feeds the other.
James Handley says
Thanks for your post and for adding your voice to the growing chorus of carbon tax supporters.
As CTC’s Senior Policy Analyst and Washington DC representative, I’m a devoted and full-throated carbon tax advocate. Yet, I feel you’re off the mark accusing NK of anti-intellectualism because she doesn’t believe that markets rule hearts and minds and can be corrected by a “silver bullet” carbon tax. I began “This Changes Everything” skeptically — her subtitle pitting “capitalism vs the climate” struck me as grandiose and needlessly provocative, especially to conservatives whose support will be needed to enact environmental tax reform.
Yet, NK’s book persuaded me that the climate challenge is wider and deeper than economics; it’s a symptom of even more profound illness than distorted energy markets. Yes, fossil fuel prices certainly are terribly wrong. Yes, a robust correction is necessary and long overdue. And yes, a carbon tax would tilt the tables toward many of the social, cultural and political evolutions NK advocates. And yet, I don’t believe that’s sufficient.
I practically leaped to applaud NK’s trenchant critique of big green’s sell-out on globalization, beginning with NAFTA. She deftly points out that global trade agreements have encouraged vast escalation and mobilization of CO2 pollution sources, overwhelming whatever reductions might have come out of Kyoto-based national emissions caps (if the UN had been able agree on and implement them).
I do wish NK had gone further to point out that an explicit, transparent carbon tax with WTO-sanctioned border tax adjustments is the only policy that can meet the climate challenge in the context of globalized “free” trade. And I fervently wish NK and the organizations she supports and counsels (including 350.org) would boldly, loudly advocate a briskly-rising carbon tax, not as a final “silver bullet,” but as a first big step toward “the great turning” that humanity must make.
Bob Dobrow says
Agree very much with James Handley’s comment. Note that NK *does* support a vigorous carbon tax. For instance, “A steep carbon tax would be a straightforward way to get a piece of the profits, as long as it contained a generous redistributive mechanism–a tax cut or income credit–that compensated poor and middle-class consumers for increased fuel and heating prices. As Canadian economist Marc Lee points out, ‘It is possible to have a progressive carbon tax system that reduces inequality as it raises the price of emitting greenhouse gases.’ ” There are numerous other favorable statements about a carbon tax and one can check her Index to see them all. But her thesis is that much more is needed, and that a broad-based, militant social movement must be built which will “demand and create political leadership that is not only committed to making polluters pay for a climate-ready public sphere, but willing to revive two lost arts: long-term public planning and saying no to powerful corporations.” From personal experience, I feel TCE is a transformative work, which points the way in terms which are both realistic and hopeful.
Al Connor says
Dan, James, I too have argued for an upstream tax or surcharge on carbon at the point of extraction and port of entry.. It does need to be high enough (1) for large CO2 emitters wonder if switching to a renewable source might be more profitable than a carbon fuel and (2) equal the cost of the externalities that result from burning carbon. As for NK’s position (I am reading her book now) I think she puts little hope in a carbon tax because as proposed it is not economically hard enough on present transnational energy corps to stop investing in carbon for the next 10-15 years. I think she also dismisses the moral argument because those same ignore it. It does not affect their bottom line or reduce their control of the energy market or of national legislatures. My thought is that neither the present economic or moral arguments has any effects of the corporations or legislatures they control. The citizenry. is going to have to take it on ourselves to develop and control small distributive renewable powered electric generation, storage and transmission systems that by pass corporate controlled centralized grid systems.. That will cost a lot up front, but over time will be more reliable, more efficient and save money.
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Sid Madison says
I use the term “silver bullet” in the following way: national climate legislation/carbon fee and dividend (I’m a member of Citizens’ Climate Lobby) is the closest thing we have to a silver bullet. It is the only policy choice, if not taken, will make us fail. But many other policies must also be taken. Like Klein, I also want a more sustainable and just future; my opinion is that because of the time critical nature of global warming, we must solve it mostly within the confines of the existing system so as to preserve our planet for future generations.
Rick Knight says
I haven’t read her book, but just based on reports, I fail to understand what it actually is that Klein thinks should be done. Everyone hold hands and … what? There are no separate realities where “economics’ and ‘values’ reside. There are just things that are so and things that are not so. I believe the fee-and-dividend version of the carbon tax is the key that unlocks the door to the future that Klein actually would like to see. It forces everyone to participate in the behavioral and, yes, economic shift away from fossil fuels that has to happen, not just those who anoint themselves as the virtuous few. I am baffled why she and so many of her admirers don’t see this.