Breaking the carbon gridlock
By Hal Brill
With our political system tied up in knots, there‘s a growing sense of hopelessness about America being willing to come to grips with the climate crisis. For many of us, this issue is a moral imperative, as we’re wrenched by our compassion for all the beautiful creatures and ecosystems that are sacrificed on the altar of our inaction. But the morality-and-compassion approach isn’t gaining traction. Some surveys have shown a falling percentage of people who think climate change a serious menace.
We’re going to have to leaven our heartful responses with smarts. The broader public is focused on jobs, global competitiveness, and national security. There are plenty of conservatives, and even tea partiers, who can get behind these goals. What’s needed is a clear strategy and specific goals that link climate action with these more widely-embraced priorities.
This potential is what drives Bill Shireman, President of Future 500, a group that brings corporations and NGO’s together to forge unlikely alliances.
According to Shireman, “A price on carbon is an economic and ecological imperative – and it can and will pass the U.S. Senate and House. All that is required is a systematic drive to earn environmental, business, and bipartisan support.”
Those of you who like the nitty-gritty of policy know that there’s been a fierce debate about ways of pricing carbon. A “cap and trade” model was actually passed by the House, but died in the Senate. Cap and trade would create a market mechanism to buy and sell carbon credits, but is fraught with perils – it could enrich Wall Street traders and lead to dubious projects to sequester carbon. (An entertaining cartoon video is on Annie Leonard’s “Story of Stuff” website.)
Another approach is establishing a carbon tax. Surprisingly, even with the inclusion of the word-that-cannot-be-uttered, this idea may actually be the one that catches on. The saving grace is that it can be called a “revenue-neutral tax swap” – revenue from a carbon tax would be distributed to citizens as a dividend or tax credit. Economists on the left like this – it fixes the problem that the harms fossil fuels cause harm the environment have been economic “externalities” not accounted for in the price of gas, oil, and coal. Free-marketers also like it because it makes sense to tax something that is harmful, thus allowing the market to bring about the desired outcome.
With the lack of any meaningful results from international climate talks, we’re going to need business to play a pivotal role. Shireman stresses that many transnational companies are actually eager to see a price on carbon, which would open up vast new markets for technologies that reduce our carbon footprint. China is investing like crazy into these fields, and we’re in danger of being left in the dust.
Natural Investors will continue to play a crucial role. Many of the mutual funds we invest in have actively engaged corporations in dialogue, urging them to disclose their carbon footprint and create plans for long-term carbon reductions. We also invest in equity funds that focus specifically on clean energy and green technologies. Community investments bring renewable energy to the developing world and low-income communities. Recently some new “green bonds” have been issued to raise capital for sustainable projects (here are a few links on green bonds). And we continue to advocate for innovative investment vehicles – the NGO Green America is promoting “Clean Energy Victory Bonds”, modeled after the War Bonds, that would enable ordinary citizens to invest safe, interest-bearing bonds. It’s a great idea, since our addiction to oil truly endangers our national security.
Most exciting for us at NI is being on the forefront of new economic and social models. Perhaps the most paradigm-shaking is the emerging field of the “sharing economy”. Rather than owning stuff, it can make much more financial sense to rent or share items. When I went to school in Berkeley, we used a “tool lending library” for home projects. Netflix has proven this model for DVD’s. Now the internet is enabling “peer-to-peer car sharing”. RelayRides, a startup operating in San Francisco and Boston, has an online platform that enables you to rent your neighbor’s car (or rent yours out). They provide insurance, theft protection, and GPS tracking for the cars. This kind of out-of-the-box innovation is why I remain optimistic about the human prospect.
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