The fights against climate change and inequality would both benefit much from a Basic Universal Income union

Sir, Martin Wolf, discussing the seemingly accelerating threat of climate change writes: “If carbon pricing were to deliver the desired shifts in investment, it would require credible commitment over the long term. But commitments for the long term can barely be credible.” “Why fossil fuel power plants will be left stranded” April 6.

That really depends on how carbon pricing is structured. The real challenge is to keep at bay the climate change profiteers, be that governments, be that private companies.

In my country Venezuela, were the subsidies for domestic gas (petrol) are monstrously large, but where there is an imbedded resistance to high gas prices, that could be solved if the government paid out all domestic gas revenues directly to the citizens in equal parts… and that at a cost that would not be larger than 2 percent tops.

In the same vein I have also suggested that if all funds derived from carbon pricing, or carbon taxes, were to fund a Universal Basic Income scheme that fights inequality, then all the incentives are perfectly aligned, and it would be politically very difficult to eliminate it.

In fact all the fight against inequality should also proceed with the basic principle of keeping the redistribution profiteers at bay, and Universal Basic Income helps to do that.

An added advantage is that separating the redistribution flows from the taxes needed to fund the governments operations, would bring much added transparency to fiscal matters, and thereby make life more difficult for demagogues.

And of course the resulting flows would help to sustain the demand needed for economic growth.

PS. The Universal Basic Income could also be additionally funded by means of a Pro-Equality Tax

@PerKurowski ©