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Pitch

Fossil Carbon emission is reduced by a DEC (Distributed External Costs) rationing system running orthogonally to market economy. No price!


Description

Summary

Climate Change induces Distributed External Costs (DEC).

But DEC quantifies the first articles of the Universal Declaration of Human Rights. Being wealthy has nothing to do with my right to induce DEC (like drinking water or emitting CO2) and my duty to keep them sustainable (like limiting emissions).

A free market doesn't reduce DEC. It pushes their growth instead. It also prevents "Codes of conducts" by making better agents poorer.

So when full DEC bans (1952 London smog) is not possible, the "Polluter Pays Principle" (PPP) is usually applied: Pigovian Taxes (tobacco products) or Permits Trade (acid rains).

But PPP has flaws:

  • it increases inequities by pressuring lower incomes while preserving the most influent individuals,
  • it legitimates bad behaviors ("I paid not to change"),
  • it looks shady (another new tax!) when no clear loss compensation or counteraction is funded.


PPP flaws are blatant regarding carbon.

  • No price can be high enough to be incentive while being low enough to preserve economy and poorest people.
  • Future impacts are priceless (venus syndrome)
  • No counteraction (geoengineering) is fundable yet.

 

Beside PPP, other popular proposals (neo-protectionism, living wages)  could make DEC mitigation even harder.

Our solution is a true alternative. It consists in setting up a DEC rationing system which will work orthogonally to a market economy.

  • every individual periodically receives a same quantity of DEC permits as tokens .
  • every agent (business/individual) gives back tokens when its activity induces DEC.
  • in between, token exchanges are unsupervised. Producers freely get tokens from consumers and partially relay them to providers.
  • every good in practice gets 2 values on the price tag ($ and tokens) and consumers make choices accordingly.


Note this solution doesn't create a new market place. Tokens are not a currency. They are literally priceless (ones doesn't sell vital rights).

Note that to be viable, the system should replace all Pigovian Taxes beside carbon.


What actions do you propose?

One creates a governmental organization which

  • distributes DEC (Distributed External Costs) Permits
  • and collects them back at the source agents of DEC inducing activities.

 

DEC Permits Tokens are given to individuals only, on a regular basis (per month) from birth to death. The same amount of token is given to every person, whatever one's social status, wealth or incomes.

Tokens accounts are "on the cloud" (computer based). Virtual transaction between accounts are free and unsupervised. Virtual tokens may also be converted to real tokens -and vice versa- through local agencies. Concrete tokens may be traded from hand to hand.

The same organization also defines the DEC of every economical activities. Concerning fossil carbon emissions, only carbon extractors and importers are asked for tokens.

One doesn't need to token-tax intermediates as the flow of tokens from consumers to producers occurs naturally whatever the number of intermediate agents:

  1. Firstly, oil producers ask tokens to their buyers so to give them back to the organization)
  2. Then these clients asks them in turn to their own clients,
  3. and so one
  4. till
  5. end users.

 

The global amount of tokens asked back by the organization has to be obviously higher than the global amount of distributed tokens so that mitigation may take place.

As an example, let's postulate than one starts distributing 10 billion tokens per month to the population and one simultaneously asks coal/oil producers/importers ~11 billion tokens for a business-as-usual activity.

Very quickly, producers/importers won't be able to gather enough tokens to keep extracting carbons at the same level. Carbon emissions will be eventually mitigated by roughly 10%.

One can't tell exactly how carbon emissions will be limited in details as the final decisions are freely made by individuals as they realize they have not enough tokens -whatever their actual incomes- to keep their way of life.

Note that every person can freely choose which carbon-rich purchases he/she avoids or replaces in order to spare tokens.

 

The system is less coercive than it looks. The only new laws is:

  • one must give tokens to the organization when one is asked for. It happens when one's activity induces DEC (eg oil extraction).
  • when one can't durably pay token, it's a bankrupt. Business are closed and people get assisted and lose rights.
  • token falsification is a crime, and not giving the tokens that a seller is asking for is a theft.

 


Who will take these actions?

This proposal is organized around a new governmental organization.

This organization distributes permit tokens to individuals, that is people, you, me, everybody... No token are directly given to firms or business. Only end consumers directly receive tokens.

The core idea of this proposal is that the amount of tokens given to each citizen is the same for everyone. It's the Universal Distributed External Cost Permit.

The same organization also asks token-based taxes for the production or importation of fossil fuels. Wells and borders are severely controlled.
 Taxes are finely tuned so that a "business as usual" usage of fossil fuel would globally lead to collect a bit more tokens that what's actually distributed.

Oil producers or importers must ask for tokens to their clients. These clients ask for tokens to their own clients. And so on till the end consumers. In practice, every good or service is sold by exchanging both $ and tokens. The chain of transactions till the end consumers is unsupervised.


What challenges will be faced in implementing this proposal and how will they be overcome?

  • DEC rationing must start with an initial period of low pressure when one gives more tokens than what producers are asked for.
  • Imported foreign products must be token-limited by computing LCA.


How much will emissions be reduced or sequestered vs. business as usual levels?

Let's suppose the government

  1. distributes 9 billion tokens per month (as 1000 tokens per person).
  2. collect tokens at carbon sources so that a non-mitigated extraction of fossil carbon would lead to collect 10 billion tokens per month.

 

As carbon producers/importers can't gather more tokens that what was given to end consumers, mitigation is guaranteed. 10% fossil carbon won't be emitted.

In practice, every person changes his way of life as will so to fit the quota he/she got.

  • eating less meat,
  • sharing their car to commute,
  • colder home temperature in winter
  • etc

 

One again, people are free to live as they want as long as their way of life fits in the quota.

 


What are other key benefits?

Tokens allow to control when an individual emit additional CO2 by himself (cutting and burning his own forest)

Tokens would as well control many activities unrelated with Fossil Carbons and Climate Change.

Here are a few DEC activities which may be more or less severally mitigated by the same system:

  • pets
  • smoking
  • public health service usage
  • trashing waste
  • risky loans
  • excessive geographical concentration of activities
  • risky transport
  • risky labor
  • etc.


Additionally, many resources which used to look renewable or infinite might be now controlled with our orthogonal system:

  • clear water,
  • sand,
  • copper,
  • fishery,
  • land usage,
  • etc.

 

All this without triggering riots and wars.

 


What are the proposal’s costs?

The foundation of the system is not so costly. An exception is the importation of high level products which requires to compute a lot of long, costly and controversial LCA.

 

LCA will increases the system cost dramatically.

 


Time line

One first gives people a large DECP quota in the couple of years after the system is enabled.

People learn how to manage their quota.

Abrupt contraction and economical collapse is avoided.

Then one slowly raises the token-based taxes for fossil carbon and people start being cautious about tokens expenses. The society enters a  transition phase to a carbon-free economy.

The tooled society may turn sustainable and fossil fuel free in less than 30 years.

 


Related proposals

What this proposal isn't

  • socialism/marxism. Business initiative is preserved;
  • anti-capitalism. Rich people may still exist and have a conspicuous but armless life;
  • liberal. It's just than duties and rights aren't measured with a currency
  • anti-liberal. Coercition is lower than what future societies will be if PPP is forced intoi people.
  • right / left wing tinted. For example, it might been as well been used to promote or discourage, says, Women Emancipation.
  • a parallel market place / an Alternative Currency.  Because there is no equivalence between DECP and prices like there is no equivalence between temperature and weight. Those are orthogonal values in a Cartesian coordinate system;
  • a Basic Income. A basic income may fuel DEC growth.
  • Green / neo-protectionism.
     

What this proposal is

This proposal generalizes Tradable Energy Quota (TEQS) / Personal Carbon Trading (PCA) to all kind of distributed external costs. Orthogonality makes tradale quota usable to address many social/environmental problems.


References

No reference were used. It's a plain new solution based on a simple reasoning which doesn't need any theorem or studies to be proven.