Thou shall not sell carbon emission indulgences

Sir you write: “Polluters can purchase “carbon credits” to mitigate the effects of their activities. This allows them to continue with their existing business while claiming that they are doing their bit to combat climate change” “The merits of a global carbon offset market” December 7.

For more than a decade I have argued that “carbon credits” are like the indulgences sold by the Catholic Church for the forgiveness of sins, and which Martin Luther protested. And carbon credits are currently much promoted by Germany.

In his 2015 Encyclical Letter LAUDATO SI’ 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."

So, in a strange twist of history, it seems the Catholic Church is now telling the Lutheran Church “Thou shall not sell carbon emission indulgences”

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

Yes we sure need a carbon tax, but its revenues, should be shared out equally to all

Sir, Tim Harford writes: “The exciting thing about the Green New Deal is that it has serious political momentum focused at addressing climate change.” “Why the world urgently needs a carbon tax” April 13.

No! That “Green New Deal” “vague, and [with] grand aims [to] win… support than [with] hard practicalities”, far from being exciting is scary. As Harford thinks, “climate change is far too important a challenge to entrust to oil companies” I am sure that “climate change is far too important a challenge” to entrust its spending decisions of the fight against it, to some few who might be pursuing a different objective.

As I’ve said over and over again, the more you are concerned about climate change, the more you should be concerned with keeping the climate-change-fight profiteers as far away as possible.

Harford writes: “A lump-sum subsidy can encourage the uptake of electric cars — but a carbon tax will also reward those who cycle instead of driving.” Sir, I just ask, would the rewards for cycling not become so much real, if all carbon tax revenues were shared out equally to all?

PS. Harford mentions “a carbon permit auction” as a “close sibling” to a carbon tax. Not so. A carbon permit auction is nothing but a new type of those indulgences that were sold by the Catholic Church in order to permit sinning. It is a twist of history to see that Martin Luther’s Protestant Germany is one that now most supports such indulgences.

@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

Let’s make sure that environmental, social and governance investing does not just signify ESG profiteering, or access to indulgences for paying worse sins.

Sir, John Authers writes: “On the side of the devil, ESG offers a rebranding for an unpopular industry, an excuse for data providers to crunch a lot of data and then charge for it” “Pressure for ESG presents fund management chiefs with a moral dilemma” May 31.

That is right on the dot. In all these political correct issues, what is by far the most present is the profit motive for those preaching it... morality is much absent

In terms of defending the environment, I would much rather prefer a huge revenue neutral carbon tax, meaning all its revenues paid out in equal shares to all its citizens, than having the climate change fight profiteers gaming the fight and taking their cut. It is sufficiently difficult and expensive as is.

And in terms of “social” it is much better to use all potential profits to help fund a Universal Basic Income than to help fund the social fighters.

But what really upsets me is that good governance is on the list of good socially conscious investments. Much better, much clearer, would be to make sure bad governance is never ever financed.

Let me be absolutely clear. I would much rather prefer a Goldman Sachs’ Lloyd Blankfein being socially sanctioned, never ever more invited to a party in New York, for helping to finance a human rights violating regime like Venezuela’s Maduro’s, than allowing him to be able to purchase indulgencies to pay for his sins, by (profitably) financing some other “good” guys.

http://ourpiedaterre.blogspot.com/2017/04/solutions-that-share-out-all-benefits.html

http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

https://unsustainabledebtsustainability.blogspot.com/2017/06/goldman-sachs-financing-of-venezuelas.html

@PerKurowski

A revenue neutral carbon tax helps face climate change, inequality, structural unemployment (UBI) and promotes growth

Sir, Ed Crooks reports that “Eleven leading international companies… have joined a campaign backing a revenue-neutral carbon tax in the US, as a way of tackling the threat of climate change that “embodies the conservative principles of free markets and limited government”. “GM and Total among 11 multinationals to support US carbon tax campaign” June 21. 

And yesterday, George P. Shultz and Lawrence Summers also signed up completely on the idea. “The inevitable climate solution” Washington Post, June 20.

Indeed, as I have written to you many times before, a carbon tax which revenues are equally redistributed to all, “carbon dividends”, is the way of how to align the market signal that helps face the current environmental challenges, with the current concerns about inequality and lack of sustainable economic growth.

It also constitutes a fiscally sound way to begin funding the universal basic income the society so urgently needs in order to face growing structural unemployment, before social cohesion breaks down, as then it might be too late.

It follows the same principles as what I proposed in May 2016, in order to combat pollution in Mexico City, and that you surprisingly yet very kindly published.

So Sir, forget the Paris Climate Agreement lamentations, at least for a while. The Climate Leadership's Council proposed carbon dividends proposal carries a lot more green, social and economic punch.

Please, even if this could make Trump to become a greater green hero than Al Gore, swallow it, for the best of our young. If Washington Post seems to be able to do so, you could too. 

PS. A decade ago I protested the trading of carbon credits as being just indulgences issued in order to keep on committing environmental sins. But carbon-tax-dividends, is that not something like democratic climate change indulgences, applied to and shared by all?

@PerKurowski

Is the Catholic Church now telling the Lutheran Church: “Thou shall not sell carbon indulgences”?

Sir I refer to James Politi’ and Giulia Segreti’s “Pope says multinationals and greed threaten environment” June 19.

Pope Francis’ encyclical Laudato Si states: “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.”

I have for years I argued that the “carbon credits” so much promoted by Germany among others, are like the indulgences sold by the Catholic Church for the forgiveness of sins, and which Martin Luther protested. And so now, in a strange twist of history, it seems it is the Catholic Church that is telling the Lutheran Church “Thou shall not sell indulgencies”

@PerKurowski

In Paris Conference we will hear many echoing Neville Chamberlain: There will be splendid planet earth for our time

Pilita Clark and Stefan Wagstyl report on “G7 in historic accord to phase out fossil fuel emissions this century”, June 9. Hurrah!

But when Stephen Harper, the Canadian premier, brings it down to reality mentioning that: “doing so would require “serious technological transformation…I don’t think we should fool ourselves, nobody’s going to start to shut down their industries or turn off the lights” it makes it all look much more that a historic hullaballoo… in preparation for all to come out of the Paris conference in December declaring, like any Neville Chamberlain: There will be splendid planet earth for our time.

As I have held for many years, any planet earth environmental agreement, if disconnected from the people will not work… and in that respect Governments, NGOs and Greens are not the people.

Also for me, to read about phasing out fossil fuel without phasing in nuclear power, which for the time being is the only available bridge between now and that “serious technological transformation”, shows this is not a real serious effort.

What do little me currently propose we do for our pied-a-terre?

For a starter… instead of allowing banks to earn especially high risk adjusted returns on equity on anything perceived as safe from a credit risk point of view, something which has no purpose and is dumb, we should give banks the incentives to earn those extra high returns on everything that seems to help sustainability (and job creation).

Put one and the same capital (equity) requirements for banks on all assets, for instance 8 percent, and then reduce these with up to 50 percent depending on planet earth sustainability ratings (or job creation ratings).

And please, please, please… stop talking about differences between rich and poor with respect to their responsibility to planet earth… we are all indigenous to our planet, and we all have the same human right to feel responsible for it. The “I am rich so I can take care of it better” has to stop.

PS. And forget about selling carbon emission indulgences for some fairly undefined sins in order to use the proceeds for some even less defined good deeds.

@PerKurowski

Current bank fines seem to be neo-medieval indulgences, not paid by the sinners

Sir, in “The regulatory cost of being JPMorgan” you hold “Fines – however large seem an ineffective stick with which to beat miscreants”, January 11.

Absolutely! These bank fines seem to be medieval indulgences, in this case not even paid by the sinners, but by shareholders, tax savings and less credit to the real economy.

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.

What we need is some good carbon-solution neutral advice

Sir Jonathan Guthrie's "How I was deluded by my own carbon footprint", May 3, illustrates in a funny way the tragedy of what many of us have been saying for years, namely that to counter the serious climate change challenges, the marketing of medieval indulgences, for some fairly undefined carbon sins, in order to use the proceeds (after commissions) for some not that very clear good deeds, will just not cut it. The fact that the market seems mostly to be made up by a mix of innocent and well intentioned believers and state of the art speculators, and supervised all by an often much hypocritical environmental clergy does not make it easier. By the way it must be history's irony at work that has the current carbon indulgences system receiving its strongest support in protestant countries.

As for myself, having had some intentions to vacation in such a way that would leave a truly horrible carbon footprint, I am currently looking for someone to convince me that I am morally much better of if I allow them to finance me a more responsible alternative. Any offers? Seriously, if climate change is serious we should act seriously, and in order to do that what the world most needs is some good carbon-solution neutral advice.

Thanks, that was much needed!

Sir, our problems on planet earth are just too serious to allow us from not spelling out some uncomfortable truths. In this respect, with your ‘Carbon markets create a muddle”, April 26, and the investigations that preceded it, and hopefully those that will follow, you are performing a tremendous service to all of us who believe that the climate change threat is for real and therefore require that the actions to combat it should also be for real.

The current carbon market where we sell indulgences for some fairly undefined sins, and use the proceeds for even less defined good deeds, after paying some intermediaries a commission, will just not cut it; much less so if we leave it in the hands of blind believers or of a hypocritical environmental clergy.

PS. Fast forward a decade: What if the indulgences revenues are democraticaly shared by all? Carbon dividends?

The Protestants and their carbon emission indulgencies

Sir, Gideon Rachman correctly points out that the issue of global warming could save the union of the European Union but of course it could also end up as just “Another European commitment that might vanish into thin (and perhaps hot) air", March 20.

Beside Rachman’s arguments this week, here in Washington, as part of the celebrations of the 50 years of EU Joachim Radkau is going to give at the World Bank an address titled "Protestantism and Environmentalism: In Quest of a Weberian Approach to Eco-History", and frankly, even though I am a protestant, I do not believe the world, or Europe, can really afford to make anything that could smell even so slightly religious-divisive out of the environment, but needs instead to keep is as a big uniting almost ecumenical movement.

Having said that I must mention that I am still quite curious about how Mr. Radkau intends to explain how so many European protestant countries now favour, in the name of the environment, the trading of carbon emission rights. Those sound to me so much like those old catholic permissions-to-sin indulgences that Martin Luther fought so hard against.