Written by Frank Ackerman
February 27, 2019
Fifth in a series on climate policy.
Climate change is at once a common problem that threatens us all, and a source of differential harms based on location and resources. We are all on the same boat, in perilous waters – but some of us have much nicer cabins than others. What is the relationship of inequality to climate policy?
The ultimate economic obstacle to climate policy is the long life of so many investments. Housing can last for a century or more, locking residents into locations that made sense long ago. Business investments often survive for decades. These investments, in the not-so-distant past, assumed continuation of cheap oil and minimally regulated coal – thereby building in a commitment to high carbon emissions. Now, in a climate-aware world, we need to treat all fossil fuels as expensive and maintain stringent regulation of coal. And it is impossible to repurpose many past investments for the new era: they are sunk costs, valuable only in their original location or industry.
If we could wave a magic wand and have a complete do-over on urban planning, we could create a new, more comfortable and more sustainable way of life. Transit-centered housing complexes, surrounded by green spaces and by local amenities and services, could offer convenient car-free links to major employment sites. Absent a magic wand, the challenge is how to get there from here, in a short enough time frame to matter for climate policy.
Space is the final frontier in energy use. Instead of shared public spaces for all, an ever-more-unequal society allows the rich to enjoy immense private spaces, such as McMansions situated on huge exurban lots. This leads to higher heating and cooling costs for oversized housing, and to higher infrastructure costs in general: longer pipes, wires and travel distances between houses. And it locks in a commitment to low population density and long individual commutes. Outside of the biggest cities, much of the United States is too sparsely settled for mass transit.
Pushing toward clean energy
Carbon prices and other incentives are designed to push people and businesses out of the most emissions-intensive locations and activities. Along with the wealthy exurbs, cold rural states, with high heating and transportation requirements per person, will become more expensive. So, too, will investment in emissions-intensive production processes, whether in electricity generation, heavy industry, or agriculture.
The art of policymaking requires a delicate balance. Too much pressure to make fuel expensive can produce a backlash, as in the Yellow Vests protests in France, which successfully blocked an increase in the price of gasoline. Too little pressure leads to complacency, to the false belief that enough is already being done. Subsidies to support the transition may be useful but must be time-limited to avoid becoming a permanent entitlement.
The green new deal, the hopeful, if still vague, political vision that is now drawing widespread attention, calls for a transition to clean energy, investment in low-carbon infrastructure, and a focus on equality and workers’ rights. It would create substantial net benefits for the country and the economy. A more fine-grained analysis is needed, however, to identify those who might lose from the transition. Their losses will loom large in the policy debate, regardless of the benefits to the rest of society.
For example, after years of seniority-based cutbacks, many of the remaining workers in legacy energy industries (coal mines, oil wells, fossil-fueled power plants) are nearing retirement age. Pension guarantees, combined with additional funding to allow early retirement, may be more important to these workers, while new green jobs could be important to their children or to the smaller number of younger workers in at-risk jobs.
Older residents who have spent their lives and invested their savings in a rural community, or have no assets except a farm, should be welcome to remain in those communities. But the lingering mystique of an almost-vanished rural America should not lead to new initiatives to attract younger residents back to an energy-intensive, emissions-intensive lifestyle.
Responding to inequality
Energy use and carbon emissions are quite unequally distributed, within as well as between countries. In all but the poorest countries, the rich spend more on energy in absolute dollar terms, but less than others as a percentage of income. As a result, any carbon price introduced in the United States or other high-income countries will be regressive, taking a greater percentage of income from lower-income households.
To address this problem, James Boyce proposes refunding carbon revenues to households on an equal per capita basis, in a cap-and-dividend system. Boyce’s calculations show that most people could come out ahead on a cap-and-dividend plan: only the richest 20 percent of U.S. households would lose from paying a relatively high carbon price, if the revenues were refunded via equal per capita dividends.
Other authors have proposed that some of the revenues could go to basic research or to infrastructure development, accelerating the arrival of sustainable energy use. Any use of the revenues, except distribution in proportion to individual fuel use or emissions, preserves the incentive effect of a carbon price. The question of cap-and-dividend versus investment in sustainable energy is largely a debate about what will make a regressive carbon price politically acceptable.
Stranded assets
It is not only households that have invested too heavily in now-obsolete patterns of energy use. The same pattern arises in a different context, in the energy sector itself. Electric utilities have often invested in fossil-fuel-burning plants, expecting to recover their investment over 20 to 30 years of use. Now, as changing prices and priorities shut some of those plants before the end of their planned lifetimes, the unrecovered investment is a stranded asset, no longer useful for producers or customers.
The problem is further complicated by the regulatory bargains made in many states. Depending on utility regulations (which differ from state to state), a utility may have formally agreed to allow state regulators to set its rates, in exchange for an opportunity to recover its entire investment over a long period of years. What happens to that regulatory bargain when a regulated plant becomes uneconomic to operate?
Businesses whose investments have gone badly do not elicit the same degree of sympathy as individuals stuck in energy-intensive homes and careers. Indeed, Milton Friedman, the godfather of modern conservative economics, used to emphasize that private enterprise is a profit and loss system, where losses are even more important than profits in forcing companies to use their resources effectively.
Despite Friedman’s praise of losses, demanding that a utility absorb the entire loss on its stranded assets could provoke political obstacles to clean energy and climate policy. Neither zero recovery nor full recovery of a utility’s stranded assets may be appropriate in theory. Given the urgency of a rapid and complete energy transition, it may be more expedient to negotiate a settlement that allows prompt progress. Once again, it is the political art of the deal, not any fixed economic formula, that determines what should be done. Offering utilities too little provokes opposition and delay; offering them too much is unfair to everyone else and could encourage similar mistaken investments in the future.
What does global sustainability look like?
Climate change is a global problem that can only be solved by cooperation among all major countries. The challenge for American policy is not only to reduce our own emissions, but also to play a constructive role in global climate cooperation. U.S. leadership, in cooperation with China and Europe, is crucial to the global effort to control the climate. Reviving that leadership, which had barely surfaced under Obama before being abandoned by Trump, is among the most important things we can do for the world today.
In the longer run, questions of climate justice and international obligations are among the most difficult aspects of climate policy. High-income countries such as the United States and northern Europe bear substantial responsibility for the climate crisis worldwide. Among other approaches, the Greenhouse Development Rights framework combines historical responsibility for emissions and current ability to pay for mitigation, in assigning shares of the global cost of climate stabilization.
In the current political climate there is no hope of achieving complete consensus about international burden-sharing before beginning to address the climate crisis. The urgency of climate protection requires major initiatives as soon as possible, in parallel with (not waiting for the conclusion of) discussions of international equity. U.S. actions on both fronts are essential for global progress toward climate stabilization. Significant steps toward equity and burden-sharing may be required to win the support of emerging economies such as India, Indonesia and Brazil.
Finally, assuming success, what would global sustainable development look like? In view of the rapid urbanization of emerging economies, the key question is, what kind of low-carbon urban life can the world afford? The sprawling, car-intensive and carbon-intensive expanse of Los Angeles, Phoenix, or Houston seems like an amazingly expensive mistake. The compact, energy-efficient, transit-based urbanism of Tokyo or Hong Kong is at least a contender, a high-income life with much lower resource use per person.
The American example matters around the world: if our vision of the good life remains one of extravagant sprawl, others will try to imitate it. If we develop a more sustainable vision of our own future, the whole world will be watching.
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이 순간… Fang Jifan은 다시 원숭이가 된 느낌을 경험했습니다.
geinoutime.com
그는 재킷을 입은 채 공식 유니폼을 직접 벗었습니다.
Theatrical version Puella Magi Madoka Magica
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k8 カジノ 機種
この記事を読んで、たくさん学ぶことができました。ありがとうございます。
Oiran Dream
この記事は心に響きました。とても感動的です。
k8 カジノ 口コミ
この記事は本当に心に響きました。ありがとうございます。
Sugar Rush Xmas
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동시에 Shilin은 이미 불만으로 끓고 있습니다.
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CR 聖戦士ダンバイン
この記事の深さと質に驚きました。本当にありがとうございます。
k8 カジノ 口コミ
ユニークな視点で、非常に啓発されました。ありがとうございます。
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황제와 손자를 모욕하면 앞으로 자녀와 손자는 어떻게 할 것입니까?땅값이 떨어졌을 때 그에게는 조금 괴로웠다.
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검객들은 귀방에서 나와 팡지판을 하나씩 바라보았다.
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“Ouyang Qing의 가족, 조심하십시오.” Hongzhi 황제의 눈이 빨갛게 변했습니다.
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그렇게 말하면서 Hongzhi 황제는 Zhu 부인에게 말했습니다. “음식은 내가 직접 처리합니다.
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가네샤 골드
다밍과 너무 오랫동안 떨어져 지내다 보니 두 형제가 그렇게 많은 새로운 것을 접한 것은 처음이었다.
포츈 래빗
Liu 부인은 거의 쓰러질 뻔했기 때문에 서둘러 Fang Jinglong을 안았습니다.
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슬롯 무료 사이트
Fang Jifan은 펜치를 먼저 전달해야할지 경례를 먼저해야할지 몰랐습니다.
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파라오 슬롯
Jin Zizhong은 머리가 너무 많아서 조금 포기해도 아프지 않습니다.
크립토 골드
그의 표정은 단호했습니다. “이 말, 말도 안되는 소리하지 마세요.”
입플 토토
Zhang Mao는 큰 놈이고 그의 생각은 매우 직접적이므로 …
마종 웨이즈
분명히 그들은 끔찍한 현실을 알고 있습니다.
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