Thou shall not sell environmental crimes indulgences

Sir, albeit a bit late, I refer to David Sheppard’s Big Read “Carbon trading: the ‘one-way’ bet for hedge funds” FT August 23.In his Encyclical Letter 'Laudato Si’ of 2015, Pope Francis wrote:

"171. The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors."

With “permits” Pope Francis was here de facto referring to some type of “indulgences”, which help pardon environmental sins. 

It was Martin Luther’s attacks on the Catholic Church’s sale of indulgences for the remission of temporal punishment for forgiven sins, which caused the rift that led to the creation of the Protestant Church. Therefore, more than 500 years since Luther in 1517 (supposedly) nailed his “Ninety-five Thesis” on the door of Old Saints' Church in Wittenberg, I found it curious (and equally correct) to read a Catholic Pope accusing many protestants who favor carbon trading, for sort of a similar procedure.

As a protestant belonging to the Swedish church, ser wife and catholic children, I do not like carbon trading, as I previously explained in a letter you published, I much prefer high carbon taxes shared out equally to all, as that would align the incentives in the fight against climate change and the fight against poverty. 

http://ourpiedaterre.blogspot.com

@PerKurowski

What’s the safest way to fight climate change: by centralized planning or through the market?

Sir, Tim Harford writes: We should do more to encourage innovation that attacks the climate change problem… The most obvious first step (among several worth trying) is a stiff tax on carbon dioxide emissions” “Let’s innovate a way out of our climate crisis” October 13.

I agree 100% with that. The real question though is what is to be done with the revenues of such stiff tax? There are different options. 

The first to allow governments to manage these, setting it up for good results, but also a quite likely having it much captured by the war-on-climate-change profiteers. 

The second to share out these revenues equally among all citizens, like by helping to fund a Universal Basic Income, and so that it is the market that will take the decisions on what’s to be done.

Of course there are also pseudo market solutions, like those carbon emission permits trading that handed over to speculators, a market in non-transparent carbon emission indulgences.

Sir, I am totally for the sharing out all those tax revenues among the citizens option. That would minimize the distortions, and align everyone’s incentives in the fights against climate change and poverty.

PS. In May 2016 you published a letter I wrote on how to fight the pollution in Mexico City, which was based on these arguments.

http://ourpiedaterre.blogspot.com

@PerKurowski

On carbon, please disclose something useful.

James Murdoch asks that “Carbon disclosure should be mandatory by 2010”, November 17. He is right though we must avoid becoming a now-we-disclosed-it-and-that’s-all-folks society… like in a now-we-provided a credit-rating-and-that’s-it-in-financial-regulations. The most singe important aspect with the disclosure of any information is that it is understandable, for any non-expert, and we also do not need more of the type of information that reveals for instance that, supposedly, hopefully, a quart of bottled water contains 0 calories.

In this respect instead of telling us how many units of carbon something generates it would be better to indicate what % of average daily emission of carbon is produced by a particular product or activity so as to allow us, in our daily life, to get a feel for whether we are making things better or worse. How many miles of average car driving does eating a standard Filet Mignon represent?

Another information that could come in handy, and which by the way does not require anything more than the gentle nod of an editor, is to publish, monthly, the list of the most and least per capita carbon emitters in the world, and on how they are evolving.

A hidden tax is neither acceptable nor efficient

Kyoto with its system of selling indulgences for undefined carbon-sins and invest the proceeds in equally undefined carbon-good-deeds, while capping carbon emissions at a globally unsustainable level, is something like building a labyrinth in order to make the search for the exit door for our environmental emergency more interesting.

Sir, Clive Crook in his “Bush may be on to something…” June 7, presents the alternative of another labyrinth, in this case a national one, that would make it possible to “simulate a carbon tax . . . avoiding the word tax”. Forget it! If we are to find our way out of the very difficult environmental hardships transparency is a must and we have to be able to call a spade a spade. If what we need is a direct carbon tax let us work on that and shame governments into action.

Crook also mentions that the sale of “perpetual permits” would create a constituency with a vested interest in enforcement of carbon caps as that would make the value of the permissions go up. Forget it! If we are to find our way out of our global and public predicaments we cannot afford having the income to ex ante deviate into private rents when so much investment is needed, just as we also must be extremely wary of any signalling risk. Place these “perpetual permits” investors in front of a forest and ask yourselves whether their profit motives would induce them to reach for water to put out a fire… or for the matches.

Let the willing consumer in on the carbon trading principle!

Sir, James Macintosh in “The car industry needs carbon trading”, July 3, puts the full responsibility for carbon-trading on the car manufacturers and also mentions the problem that “automotive carbon trading might not provide politicians with the image boos they get from driving a hybrid car or filling up a car with ethanol from Iowa’s cornfields”. Well, he misses the most important part of the story. As the environmental conscientious consumers are the ones actually purchasing the hybrids and the ethanol, the most important thing to be done is to make them aware that there are more efficient ways for them to help out. Let them get their real image boost by placing a sticker on their window shield stating that though they drive normal cars, with normal fuel, they are contributing all of their cash savings from not using hybrids or ethanol, to smart and cost-efficient environmental projects, like for instance a reforestation of a couple of acres in Tanzania, and that they could perhaps even watch growing on the web.