Power from a windpark would only be ration-free if the windpark was totally carbon neutral. Photo: Riffgat Windpark, Germany Creative Commons
Because society needs to commit to a massive change on a critical timeline
The threat is unprecedented and current economic systems cannot cope. In almost 30 years since the first UN climate negotiations started, in 2019 global CO2 emissions are rising as fast as ever. All policies introduced so far have fallen short.
Society has spent the last 250 years developing an economy based almost exclusively on burning carbon, and we are giving ourselves 30 years to turn this around and achieve net zero carbon emissions by 2050 (or preferably sooner if at all possible).
This would go down in history as the most astounding social, political and economic success.
How can our political system provide a thousand smart, rigorous and radical answers to the thousand or more changes that are needed to decarbonise our lives? Persuade a democratic majority to tolerate it? And keep up the momentum for 30 years or even raise the bar?
The chances do not look good in 2019, as most corporations across the globe are badly off-target, most government actions are not compatible with their targets, and policy experts warn that governments risk being overwhelmed by the challenge (“decision lag”).
But instead of trying to deal with all the thousands of issues politically, we can set up one major umbrella framework now: an economic mechanism – Total Carbon Rationing – to cover everybody in all parts of the economy.
After that, the actions of individual consumers deal with every issue. Their actions drive decarbonisation throughout commerce and industry.
We cannot be radical enough in dealing with these issues.Sir David Attenborough at the UK House of Commons Business, Energy and Industrial Strategy Committee 2019, New Scientist.com
No more offsetting, virtue-signalling, flight-shaming
All the people who have got “green” done already in their lives will have the option of what to do with those extra rations they don’t use. Sell them, spend them, save them, destroy them.
The newly-aware citizens who don’t appreciate the preaching by their greener fellow citizens will have total freedom of choice about what to give up first and what CO2-intense things they can continue to consume within the constraints of their carbon ration spending.
It would transform offsetting organisations, where every kilo of carbon they can prove that they sequestered would earn them the equivalent carbon ration from the central carbon bank, which they would be free to use or sell.
But surely governments can get the same result faster and cheaper with carbon taxes?
Yes, carbon taxes are much cheaper and a good place to start, but it is not enough and ultimately it does not directly control fossil fuel supply.
The world’s highest regarded “tax and dividend” law in British Columbia, Canada partially suppresses the use of fossil fuels and distributes the taxes equally to its citizens. However, it doesn’t solve British Columbia’s problems, with the provincial government locked into fossil fuels via state subsidies and complex legal wrangles at every attempt to improve it.
On its own, a carbon tax policy is simply not enough.
Carbon taxes based on carbon pricing in sector-by-sector programs on a nation-by-nation basis is just so much more complex and subjective, and only ever partially successful, as reported in EU ETS industrial energy reviews, UK government research briefings, the Norwegian tax, the Swedish carbon tax, David Suzuki carbon tax overview.
Carbon taxes never cover everything, always leaving out emissions for imported products, aviation, shipping, the public sector.
Carbon rationing, compared to carbon taxes, carbon pricing and swathes of legislation, is a comprehensive integrated approach. It’s the most convincing answer. We need to end the wishful thinking and act now before another decade is lost.
Control over carbon emissions is direct and absolute
The amount of carbon rations given to citizens would be equal to the amount of fossil fuels that the oil companies are allowed to produce. The chances of success in combating climate change are an order of magnitude greater than any other carbon taxation, legislative control or carbon pricing scheme.
Once rations are allocated, then the CO2 emissions over the rationing period are guaranteed, unlike other policies.
Would it actually save the planet?
If the carbon ration allocation is set appropriately and rolled out across the world, it could.
Carbon taxes, carbon pricing, cap-and-trade, subsidies, partial bans, trading schemes and all other policies are open to abuse from the start by loopholes, lobbying, special interests, simple omissions, public disaffection, and political campaigning.
Carbon rationing as a comprehensive umbrella framework would be by nature more independent and robust in the face of external influences.
On setting a total carbon ration budget at a certain level, the end result in reduction of CO2 emissions is known in advance.
With other policies this is guesswork and prediction, as is the success rate.
How much will Total Carbon Rationing cost?
Compared to the “free” option of doing nothing or “business as usual”, Total Carbon Rationing has a large, up-front cost with manageable, contained, on-going running costs similar to VAT or MwSt.
Doing nothing will bring global economic recessions and damage and adaptation costs of trillions, also on-going.
Compared to carbon taxes and carbon pricing strategies, Total Carbon Rationing has a large up-front cost as business, government and citizens prepare for its introduction.
But taxes or trading schemes have much higher running costs to maintain the level of carbon policymaking that rationing would make redundant:
- establishing what citizens and industry have to stop doing
- democratically agreeing on it
- legislating for it
- implementing the laws
- monitoring the effects
- repeating the process, constantly strengthening the laws in the face of political opposition
And that would be repeated in all 192 nations of the world.
So the carbon tax alternatives are initially cheaper, but they have higher legislative costs as governments manage decarbonisation, legislating year after year to keep up with economic and technological developments and unforeseen issues. The longer it lasts, the more likely it is that Total Carbon Rationing turns out cheaper.
There are other costs associated with policing TCR, for instance satellite monitoring of forests. This is already carried out by space agencies, which is how the world became aware of the 2019 Amazon fires. Much of these costs exist already.
Politicians can focus on the high level, not the fine detail of decarbonisation
It would allow politicians and policy makers to focus on how much carbon emissions to allow, rather than a thousand other things. Already academic policy analysts predict that governments will be unable to rise to the challenge without fundamental organisational restructuring.
What is the alternative? A comprehensive policy making exercise in every nation, establishing what citizens and industry have to stop doing, democratically agreeing upon it, legislating for it, implementing it, monitoring the effects, going through the process again to strengthen it.
The United Kingdom’s best experts outlined their starting point here: the UK Committee on Climate Change net zero 2050 strategy and immediately hit 2 problems – are their recommendations plausible? Or even the best choice?
Instead, politicians should concentrate on what is the right amount of rations to give out that balances escaping catastrophic climate change with avoiding social and economic collapse during the withdrawal from fossil fuel dependence.
There are many situations where policy makers won’t get it right either. Many of the changes in a low carbon economy will be counter-intuitive. With carbon rationing, if the results are counter-intuitive, it won’t bother anyone.
Who wouldn’t choose products and services with a smaller carbon footprint when they spend their rations?
Each of us can act on our own, demanding the lowest carbon ration prices, to maximise our own welfare. No-one has to decide on our behalf.
Society is slowly decarbonising itself anyway on its own as renewable energy eats away at the fossil fuel baseline. It makes little sense to attempt to accelerate the process by rule of a thousand minor laws, when rationing could be so effective.
It is fairer than any other policies
Rationing is categorised by economists as a fundamentally progressive fiscal policy. There is no requirement to bolt on a “people’s dividend” policy to make an essentially regressive tax fair.
To prevent anybody being unfairly affected by rationing, the government would hold back a percentage of everybody’s carbon ration allocation. This can be used to supplement those in extra need of carbon rations through no fault of their own.
On an international scale, all citizens from all nations would receive the same individual allocation of rations. This would start differently for different countries, but end up the same by global agreement when the UN adopts the Global Commons Institute’s Contraction and Convergence framework.
Wealthy citizens can buy extra carbon rations to subsidise their climate-unfriendly choices, but only what other people are selling, and that will decrease regularly as the rationing continues. It is not a loophole preventing actual CO2 emissions reduction from taking place. It represents a safety valve in the system that prevents people or businesses falling off a carbon ration “cliff edge”.
It promotes negative emissions – tree planting, reforestation, carbon capture – by itself
The harsh reality of CO2 emissions in 2019 and prospects for their reduction means any realistic plan must include removing CO2 from the atmosphere, or global warming will overshoot 2°C.
Under Total Carbon Rationing, the central carbon bank would promote “negative emissions” by awarding carbon rations to people or businesses capturing CO2, e.g. growing trees or building futuristic Saharan solar power stations that generate power to turn CO2 from the atmosphere back into carbon or salt crystal or methanol and oxygen.
This branch of industry is already well established as summarised by Carbon Brief.
Not only would it promote research and investment into reforestation and carbon sequestration, but because the central carbon bank awards carbon rations, it completely avoids the problem of who should pay for it. The main issue would be calculating how ration payments affect the global ration budget.
The rations price tag displays exactly how much CO2 in total was released for the product
Everybody would see how many carbon rations something costs before they buy. Each merchant or vendor in the supply chain will have to balance the rations they spend against the rations they demand from their customers. The rations they put on its price tag will reflect cumulatively all the carbon that went into its production.
Currently when a Briton buys a smartphone made in a Chinese factory that is powered by a coal plant the carbon emitted in its manufacture does not count as ‘British’. This Economist article outlines the widespread mis-measurement of carbon emissions.
Bananas from the Caribbean, a smartphone from China, chicken from the local farm, a skyscraper in New York or a Tesla sports car, everything would be paid for with rations. The rations required will tell how much carbon it needed. We would all quickly become CO2 experts, thanks to keeping a constant eye on how many rations we have left.
As the economy becomes more carbon-neutral, carbon ration price tags will systematically fall
As the economy adapts, the reductions in the amount of carbon required for products will be passed on to the buyer immediately, as soon as the new product is put on sale.
Producers will pass on their ration reductions to customers to keep ahead of the competition.
The only need for state intervention will be for key products and services whose carbon ration price tag doesn’t reduce and where people can’t readily find alternatives.
It doesn’t require a unanimous vote of approval from the whole world
It can be implemented unilaterally by any nation so it doesn’t require unanimous approval from hundreds of nations. Other nations can join at any point to form a larger trading block.
The national borders and customs agency would act a proxy for the foreign companies, collecting the required rations on imported goods from the buyers.
No more concern whether China, India and other such nations will play their fair part
When the Total Carbon Rationing system includes both the consumer countries like the UK and the countries with cheap labour like China or India, the global carbon ration budget pie is divided up fairly and equitably.
Graphic © Global Commons Institute
The GCI Contraction and Convergence framework is the essence of decades of international climate diplomacy, as used by UNFCCC, UK Government, the Brazilian, Russian, Indian, and Chinese delegations and as a basis for proposals by various organisations and political parties ever since.
No subsidy required – innovation guaranteed
It stimulates innovation directly, where all other solutions (taxes or legislation) only impact certain aspects of the economy with no guarantees about consumer behaviour.
Innovation in carbon-neutral technologies would generally need no subsidy. Investors and consumers would queue up for products that don’t require rations.
Why would business accept Total Carbon Rationing?
It creates greater economic certainty for industry, allowing better management and planning.
Shipping provides a typical problem businesses face. The IMO agreed that shipping fuel must be used more efficiently, but despite 20 years warning, it won’t happen by the 2020 deadline or any time soon due to lack of responsibility in the industry.
Businesses mainly complain that any attempts to go carbon-neutral result in a loss of competitiveness and market share as their customers switch to cheaper imported high-carbon alternatives.
Total Carbon Rationing imposes the rations on imports at customs, which levels the playing field and prevents free-riders.
Why would the oil industry accept it?
Rationing will control how much fossil fuel is pumped out of the ground, not the market price of oil.
The oil industry can finally seriously plan for the decarbonisation of the energy industry on a level “playing field”.
Secondly, the bad press and demonisation will disappear as the attention of the pressure groups and climate campaigners turns elsewhere.
Flying as an example
Typically in CO2 emissions reduction schemes, aviation is left out of the equation because it’s cross-border, private sector, and deemed business-critical.
The current industry thinking is that aviation can buy its way out using carbon offsets. The UN ICAO aviation body have adopted a pact called CORSIA, which is already mired in problems and for years was unable to agree a target date or baseline for measuring its progress against.
It finally adopted the policy that the industry would seek to voluntarily offset all excess CO2 emissions it causes above and beyond 2020 levels (which in 2019 at time of writing are not known yet).
So since there is now this policy in place and never mind if it will work or not, passengers don’t have to worry about the consequences.
Where then is the demand in the economy for real solutions to long-haul rapid transport (i.e. flying)?
If necessity is the mother of invention, then in this case, there won’t be much invention. Everyone can still fly as much as they wish – no necessity – no-one worrying about their rations.
Meanwhile the aviation industry will funnel money into the offsetting industry, which is not even a realistic CO2 emissions reduction strategy.
Aviation causes more than 2% of global CO2 emissions and is growing fast. That is regardless of the new European trend of flight-shaming, calls for a frequent-flyer tax and a celebrity jet ban. If global aviation was a country, it would rank in the top 10 emitters.
Do we ignore it and all the other sectors of the economy that governments tend to protect? This is exactly why “government as usual” with its carbon taxes, targetted bans and carbon pricing schemes is doomed to failure.
Such strategies will not go the distance. It’s similar to the tax on cigarettes. Despite 500% tax, people still smoke.
What if airlines collected carbon rations from their customers to pay for all the fossil fuels those jet engines burn up? That will in one or two decades have a massive effect, even if there’s no way of knowing what it would be.
And it would be the fair will of everyday people, who considered how much they wanted to fly compared to all other climate-damaging activities.
Society should not wait until things become desperate, and acting now on all fronts will likely bring synergies we could never have planned for.