There is NO fair and efficient carbon price. Wealth should not mess with human rights and responsibilities. Here is another proposal
Climate Change induces Distributed External Costs (DEC), a class of negative externalities which impact many agents on wide space and time scales. Uncontrolled DEC are destroying global systems, both natural (eg climate) and societal (eg social protection systems).
DECs deal with the first articles of the Universal Declaration of Human Rights, especially this third article stating “Everyone has the right to life [...]”, which may be reformulated in these terms
- everyone has the right to induce DEC
- everyone has the duty to limit one's DEC
Being wealthy has nothing to do with one’s right to induce DEC and the duty to limit them, like a reasonable consumption of clear water and carbon-based products.
And yet, the only accepted way to mitigate DEC is to apply the Polluter Pay principle, that is to set up Pigovian Taxes (read "carbon price") or Permit Trades.
Yet this approach has its own flaws. It obviously increases inequities, legitimates unmoral behavior (it's ok if you pay), and look terribly shady (who gets the money?).
Concerning carbon pricing, these flaws are blatant. No price can preserve the current economy while having enough effects to save our climate. Unbearable social inequities couldn't be defended when nothing need to be funded (the joke on these carbon sink technologies).
Social redistribution of this taxe (living wage?) won't help as it may fuel the existing system, letting the statu quo unaltered.
So here is a better alternative: Setting up a DEC rationing system in an orthogonal way, next to the existing market, not within it.
The proposal in a glance
distribute the same amount of DEC tokens to every individual, every month
individuals and firms give back their tokens when their activities induce DECs.
in between, exchanges are unsupervised. Producers demand tokens from consumers and relay them to providers.
In everyday life, goods get 2 values on the price tag: $ and tokens. Agents make their choices to fit both their money and token incomes.
Is this proposal for a practice or a project?
What actions do you propose?
We must immediately set up a governmental or supra-governmental organization in charge of:
distributing DEC Permits Tokens to individuals,
identifying the DEC of a couple of economic activities -fossil fuel extraction to begin with- through both a democratic and scientific process,
reclaiming tokens from economic agents which induce these well identified DECs
let the society self-organizes under these new constraints
Practically, an internet service hosts token accounts managed by electronic appliances (web sites, phone apps, terminals, etc). Transaction between accounts are free and unsupervised.
Other popular proposals at climatecolab.org (especially block-chain based transactions) might be reconverted into such a dematerialized token exchange place.
Non-electronic tokens may also be traded from hand to hand. “Virtual” tokens may be converted back and forth to “concrete” tokens by leveraging an existing network of local agencies (eg. banks).
To mitigate carbon emissions now, one only needs to reclaim tokens from fossil carbon extractors and importers.
One doesn't need to reclaim tokens from all intermediate agents between DEC inducing firms and end-consumers. The flow of tokens from consumers to producers will naturally occur. Simply put,
our new organization reclaims tokens from oil producers/importers,
oil producers/importers reclaim these tokens from their clients in turn,
these clients reclaim tokens from their own clients,
and so one till end consumers. End consumers obviously see a high token value on goods with a high carbon impact.
Contrarily to other permits trading, one won't create a new marketplace because tokens are not yet another currency. They are quantized rights instead of wealth. Vital rights are not tradable. These tokens are literally priceless.
Note that to better enforce this trait of orthogonality, token flows should replace all existing and future Pigovian Taxes in addition to carbon taxes.
In addition to the system installation, only a couple of new laws need to be enforced.
Token falsification is a crime. Getting goods without token compensations to the seller is a crime worse than thief (it's about rights deprivation).
Polluting firms must also give the tokens that the organization is asking for.
As a side note, tokens may also be demanded from individuals which emit DEC all by themselves, eg. by shopping trees, trashing instead of reusing, overusing public health or transportation systems, etc.
when an agent can't honor its token debt, it's a token bankrupt.
Firms may be closed down.
People who can't save enough tokens get assisted and lose rights (also fines and various sanctions).
Who will take these actions?
Actually, DEC Permits Tokens are given to individuals -that is people- and not firms. Only human beings deserve a guaranteed token income.
Free will preservation
Every person has free will to change his way of life so to fit the quota he/she got.
eating less meat,
sharing their car to commute,
tolerating colder home temperature in winter
One can't tell now exactly how carbon emissions will be limited, and what are the most impacted sub-markets. One can only tell that tokens curb individual choices as every person soon realizes he/she doesn’t have enough tokens for business as usual.
This orthogonal system of DEC rationing may look brutal. But it is eventually much less coercive than the dystopian societies that DEC taxes are leading us to.
Where will these actions be taken?
The larger the market this proposal is applied to, the better: Europe, US, ...
Indeed, importation of foreign products must be token-rationed as well. It implies to compute an LCA (Life Cycle Analysis) for every imported good so to determinate the amount of token demanded to importers.
These LCA studies may dramatically increase the overall cost of this proposal.
In addition, specify the country or countries where these actions will be taken.
No country selected
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What impact will these actions have on greenhouse gas emissions and/or adapting to climate change?
No need for complex maths. For mitigation to take place, the global amount of collected tokens must be simply be higher than the global amount of distributed tokens.
As an example, let's imagine that one distributes 9 billion tokens per month to the population and that one simultaneously demands fossil carbon extractors and importers roughly 10 billion tokens so to keep their regular activities.
Obviously, producers and importers can’t gather enough tokens to keep extracting fossil carbons at the same level. They may at most token-fund 90% of the activities they used to perform.
Fossil carbon extraction is immediately and definitely mitigated by roughly 10%.
What are other key benefits?
Tokens may also help mitigating DEC which are unrelated to Fossil Carbons and Climate Change.
Here are a non exhaustive list of DECs which may be mitigated as well.
tobacco induced mortality,
public transport abuses,
public health services abuses,
toxic financial products (eg. risky loans),
transportation insecurity (eg. oil spills),
Additionally, from now on, all these resources which used to look renewable or infinite may be managed with DEC tokens without triggering riots and wars.
What are the proposal’s projected costs?
The foundation of the orthogonal system is not so costly by itself but it must be installed with care.
The transition to a fossil carbon free economy needs to be sustainable.
That’s why DEC rationing must start with an initial period of low pressure when the organization gives almost as much tokens as it reclaims.
This way, the system puts a very little pressure on individuals to begin with.
During the following years, the difference between tokens inputs and outputs are slowly increased so to smoothly reduce carbon emissions. That's how we get a sustainable society transformation.
Importation of foreign products must be token-rationed as well.
It implies one must compute an LCA (Life Cycle Analysis) of every imported good so to determinate the amount of token which are demanded to importers.
This border regulation may be mistaken for protectionism despite token-based rationing is both rational and fair.
Education and international cooperation will be essential.
Token capitalisation may weaken the system orthogonality.
Firms and individuals may slowly accumulate tokens over a long period by demanding more than what they need for from their clients.
In no time, agents might even sell tokens on the regular market and break the orthogonality of the overall system.
In other words, rich people would escape their individual DEC Permits quota while poor people become overpressured.
This downward slide may be prevented through controlled token inflation. Token inputs (individual incomes) and outputs (token debits) should be doubled on a regular basis.
Token may curb entrepreneurship and investments
Token loans must be granted to individuals and firms. They will allow DEC inducing investments (house renewal, production infrastructure) so to preserve entrepreneurship.
One creates a new organization and reuses an existing network of local agencies to set up token exchanges across the country.
One starts by giving people a relatively large DEC quota in the years following the system creation. Mass education helps people to learn how to manage their orthogonal income.
Then one slowly raises the token-based taxes for fossil carbon. The orthogonal place begins to pressure people in being cautious with their token-based expenses. The whole society enters a transition phase into a carbon-free economy. Abrupt contraction and economic collapse is avoided.
The tooled society turns sustainable and fossil fuel free in less than 30 years.
About the author(s)
The person who write these lines is none to care about. But this idea is in its infancy and needs your help.
This proposal looks much like Tradable Energy Quota (please google TEQS) while being fundamentally different.
The difference resides in the principle of Orthogonality which is stated in the beginning of this proposal. Quota shares can't be traded like an usual wealth as they quantify human rights.
To enforce this trait of orthogonality, the proposal aims to:
generalize token usage to all kind of Distributed External Costs, not only carbon emissions.
prevent token capitalization, through an artificial token inflation or more exotic approaches: melting/weakening token value, counter-token flows...
discourage the development of a token-to-currency market place which sets the fox among the chicken by reintroducing pre-existing social inequities
Orthogonality is not only an important concept. It's the the key feature which makes this rationing system feasible and efficient to address many societal and environmental issues at once.
This proposal should also not be confused with
Free will, decentralization, and business initiative are preserved.
Impressively rich people may still exist and feature a conspicuous life as long as they behave within the limits of their DEC quota.
Freedom of entrepreneurship, competition, and free market are the way to go, as long as human duties and rights aren't traded within the same market. That’s now the role of the orthogonal token exchanges system.
Coercition will be actually lower than dystopian societies based upon right-to-money trading (as know as carbon pricing).
Is there an equivalence relationship between, says, the temperature of a coffee cup and its weight? No. They are unrelated properties. It would be absurd to enforce the policy that 1°C is equivalent to 1Kg.
So why insisting in turning human rights into currency?