An ineffective solution to climate change


Since 2008, chief climatologist and activist James Hansen has been proposing fee and dividend as a means to curtail fossil fuel use and draw down carbon in order to prevent catastrophic climate change—a very real prospect that is looming ever closer. He has advocated the plan as an alternative to market-based carbon trading and offsets, which are nothing more than licenses to pollute, and phony accounting schemes that commodify Earth’s carbon-storage capacity while traders and brokers profit from ecological disaster.

If you cook the books, you’re only going to cook the planet because such projects have not reduced greenhouse gas emissions by one single jot. Since the signing of the Kyoto Protocol, which was based entirely on carbon trading, thanks to Al Gore’s intervention on behalf of the Clinton administration, the situation has only gotten steadily worse, with none of the advanced nations making their emission-reduction goals. At Copenhagen in 2009, the worthless agreement was essentially scrapped altogether.

The mean global surface temperature of the planet has already risen 0.8 C since the Industrial Revolution. If it rises by 2 C, there will be a cascade of planetary tipping points that will speed Earth toward climate catastrophe. Scientists believe that one “climate domino” has already fallen and will begin toppling others. That would be the Arctic sea ice, which “flipped” into instability in 2007 and has been undergoing the permanent loss of its thick, multi-year ice ever since.

The next stage in the process is expected to be the Yedoma—the vast expanse of Siberian permafrost. Once it begins to thaw on a large scale, it will release enormous amounts of carbon dioxide (CO2) and methane (CH4) as microbes break down organic matter in the thawing soils. This will lead to an amplifying feedback that will add to the blanket of gases that are warming the planet and in turn, melt more ice, adding to sea level rise. The sediments of the seafloor on the Arctic continental shelf are already releasing huge plumes of CH4 from thawing methane hydrates. Action should have been taken at once 25 years ago to reduce emissions from fossil fuel combustion, yet it’s been business as usual ever since Hansen announced before Congress and the world that the planet was warming in 1988.

Considerably modified, Hansen’s fee and dividend idea has been incorporated into a bill in the U.S. Senate that was unveiled by Senators Boxer and Sanders prior to the successful Feb. 17 Forward on Climate demonstration of 50,000. The action was co-organized by Bill McKibben’s 350, the Sierra Club, and the Hip Hop Caucus.

The plan is designed to eventually wean our society off of its fossil fuel addiction. It would impose a carbon fee on fossil fuel producers and cement makers upstream at the point of production or entry, and would be in the form of dollars per ton of carbon dioxide equivalent (CO2e) emitted from fuel extraction and use. The CO2e would include other greenhouse gases such as methane, nitrous oxides, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons, and nitrogen trifluoride. There is no mention of black carbon or soot, which has a huge warming effect when it lands on ice masses, greatly increasing the heat absorption factor.

Apparently, there would be no fee charged on products such as fertilizers or petrochemicals that use fossil fuels as raw materials or feedstocks to which value is added in the production process. Tariffs would be imposed on imports from countries that do not enact similar fee and dividend legislation. The non-regressive plan also requires an annual increase in the carbon fee, which would start out at $15 per ton of CO2 and rise $10 per year or more if emission reductions are not proceeding at the desired pace. Combined with this would be a phase out of fossil fuel subsidies, including tax credits, over five years rather than an immediate and abrupt halt to the gravy train.

Then, 100% of the fee revenues would go to the general population on a per capita and monthly basis as a dividend with two half shares for each family with children under 18. The money would be directly deposited in each individual’s bank account, with none going to the federal government for its tax-and-spend policies, thereby eliminating the influence of industry lobbyists. The idea is that the dividend would help ordinary people cope with the increase in transportation, heating, and electricity costs that the Energy Giants would pass along to consumers at every level. It is thought that less well-off people, especially the poor, who are already low consumers of fossil fuels by virtue of their income status, would benefit the most and even have an incentive to conserve more while high-end consumers would receive a proportionately smaller dividend.

A decline in the use of hydrocarbons would logically follow. This assumption is based on the fact that the top one-fifth of the population has a carbon footprint that is three times that of the bottom one-fifth. At this rate, Hansen projects a 30% reduction in emissions in 10 years. The system is also supposed to spur innovation among entrepreneurs to develop more energy-efficient products and cleaner technologies. Oddly, there is no provision for any dividend funds being set aside for the development of renewable energy.

Continued fossil fuel use

The major problem with Hansen’s proposal is that it assumes the continued use of fossil fuels, especially conventional oil and gas. He believes those reserves will gradually decline based on current estimates of “peak oil.” Although he has warned that “it’s game over for the climate” if we continue to use extreme forms of carbon-intensive energy such as tar sands bitumen, deepwater petroleum (especially from the Arctic), and shale oil and gas, he assumes that it’s okay to use up the remaining conventional fossil carbon reservoirs. This means that we would not only still be generating massive amounts of greenhouse gases, but also perpetuating the destructive car/truck culture.

To prop up the wretched transportation system, he proposes a linear phase-in of polluting liquid biofuels of low-input and high-diversity as a substitute for petroleum-based gasoline—with no mention whatsoever of clean mass transit. This is entirely unacceptable.

Viewing coal combustion as the single greatest threat to civilization, Hansen calls for a moratorium on the construction of new coal-fired power plants, leading to their eventual phase-out, except in cases where carbon capture and sequestration (CCS) technologies can be employed. There is actually no such thing as “clean coal” by way of CCS, so we can forget about that. Plus, the possibility of catastrophic releases of carbon dioxide from deep geologic storage or its migration underground into water tables are all too real, making it a completely impractical alternative.

In 2008, when he originally presented his concept at a congressional briefing as a substitute for coal-fired electrical generation, Hansen called for a switch to natural gas, using up to 50% of the remaining conventional gas supplies. Coal-fired electrical generation has since fallen to 34% due to its replacement with natural gas. The drop in price of natural gas due to the “shale gale” has made this conversion possible. It is safe to assume that a significant portion of the shale gas being produced goes to electrical generation although no hard data seem to be available on that. Given the environmental devastation caused by hydrofracturing, switching from coal to gas has not been that beneficial overall. In fact, the fracking of natural gas emits more carbon than coal combustion because of all the accidental leaking and purposeful venting of methane!

Hansen also advocates the creation of a national, low-loss “smart” grid, while ignoring the benefits of locally-produced and distributed wind and solar power, which is actually more efficient since it doesn’t have to travel through miles of transmission lines that create harmful electromagnetic fields.

Other aspects of his proposal include improved land-use practices such as reforestation that allow for the natural sequestration of carbon, which is all well and good. The capacity of our climate sinks is declining and needs to be reinforced. But he proposes the use of biochar by burning agricultural residues that would better serve as mulch or compost to return nutrients to the soil and enable better moisture retention in an organic system of food production. Plus, charcoal making is a filthy process and should be abolished.

The real stinker in his plan is the deployment of nuclear power plants using Integral Fast Reactor designs and thorium fuel. There are many problems with thorium (3-4 times more abundant than uranium) because it contains no fissile isotopes, which have to be added to achieve criticality. Therefore, either enriched uranium-235 or plutonium-239, made in dangerous breeder reactors, is required to kick-start the fission process.

Thorium does not solve the waste, safety, or cost problems of nuclear power.  It is touted as a great green hope that “eats its own waste,” but it is hardly that. Thorium’s nuclear fuel cycle creates wastes at the front end with hazardous mine and mill tailings and at the tail end with long-lived decay products. Thorium-232 (1/2 life of 14 billion years), technetium-99 (1/2 life of 200,000 yrs.), iodine-129, cesium-135 & 137, and strontium-190 would all pose a danger now and in the future.

Thorium-232 has a very high radiotoxicity, with a bone-surface dose 200 times higher than that of uranium. Also, the process of breeding thorium up to uranium-235 emits lethal high-energy gamma radiation to which processing workers could be exposed. Experimental thorium reactors have had trouble with loss of coolant, concrete structural failure due to high heat, fracturing of the fuel, hot spots in reactor cores, and radiation releases into the atmosphere. Given the government and the nuclear power industry’s performance record, should anyone trust them to launch a new generation of thorium reactors

China to lead the way?

Because China is supposedly the world leader in non-carbon energy investments, it represents the shining hope to Hansen in being the first to implement his plan.

As factory to the world, the nation has become the largest carbon emitter by cranking out consumer goods, loaded with embodied carbon, for the West, which has been successful in exporting a huge portion of its greenhouse gas emissions as a result. If it wants to continue playing this role, China has no choice but to continue its reliance upon hydrocarbons. It is still very dependent upon coal, by installing one megawatt per week of coal-fired power.

Also, China will be using a lot of shale gas, for which it is now paying $18/MBTU at the port of entry. Therefore, it has invested heavily in the Eagleford Shale Formation in Texas. There are currently 17 permit applications for new LNG ports in the U.S. that will enable increased export to Asia. So how exactly will China ’s leadership on fee and dividend manifest itself, considering its high-growth rate of 7%?

Still a market-based solution

There are a number of things wrong with applying an exclusively financial solution to a problem of dangerous overuse and consumption. Hansen makes it clear that his plan will “allow the marketplace, not politicians, to make investment decisions.” To our mind, the economic system is the entire cause of the problem.

In fact, one wonders if this is really about saving the planet for human habitation or more about money, since fee and dividend does not address the need for fundamental ecological and social change and ignores the enormous carbon footprint of the military as a blood-soaked procurement agent for oil ruthlessly taken from under the land of other people.

The question is:  At what point in this process of charging fees and dispensing dividends would fossil-fuel use and consequent emissions actually decline?

It is logically expected that the Energy Giants, if they accept the imposition of the fees, would immediately pass on the cost to their customers when charging for coal, oil, natural gas, and electricity. But would the manufacturers of goods and providers of services, who are at the next step in this cascade, actually reduce the amount of fossil fuels they use in their productive processes, or simply pass on the increased cost of production to their consumers—who would pay for it in the end? Knowing how the Carbon Barons cheat, can they be counted upon to accurately report production figures? This raises the question of whether not the fees would be fairly and honestly paid and collected.

Myth of energy efficiency

A large component of Hansen’s plan is conservation and energy efficiency. But would the increased discretionary income enable workers to afford energy-efficiency measures in their homes such as retrofitting appliances and lighting, heating, and cooling systems? Would it enable them to purchase expensive, resource-intensive, hybrid vehicles to replace the old gas-guzzling beaters they drive, and would it be good for the environment if they did?

The truth is the more energy that is saved, the more energy that is used over the long run. Nothing changes with attempts at energy efficiency under capitalism. This has been proven by the Jevons Paradox, which showed in the 19th century that improvements in the efficiency of the coal-fired steam engine only momentarily lowered the demand for coal before consumption shot up tenfold! That is because of the decline in the rate of profit and the need to sell ever more commodities.

Something similar occurs with fossil fuel production in efforts to lower carbon emissions at the wellhead and refinery. The Kazzoom-Brookes Postulate has demonstrated that if carbon intensity is marginally decreased in the amount of carbon produced per barrel of oil, the savings are eventually wiped out by ramping up oil production. This would surely happen as more extreme forms of energy are exploited. The fee imposed on the Energy Giants would provide the incentive to do so, generating a vicious circle, especially since there are no means to stop them short of nationalizing their holdings, which is the only logical solution.

Consumerist behavior under commodity production

Under fee and dividend, people with a small carbon footprint—the vast majority—are expected to experience a net monetary gain. However, would the money go into savings for a more secure retirement or be spent to improve living conditions? If low-income working people had more money in their pocket to spend as they wish, would they actually cut back in hydrocarbon use? Wouldn’t they be inclined to spend it on more goods and services just to improve their basic quality of life, which would lead to greater per capita consumption and fossil fuel use regardless of the increase in cost? After all, it takes fossil fuels to produce everything we consume in this society—food, clothing, shelter, pharmaceuticals, transport, gadgetry, the toys that take up people’s leisure time, and the energy to power them.

If well-heeled, big consumers receive a lesser dividend as a result of their profligacy, what’s to stop them from simply biting the bullet and paying more for the goods and services they consume, especially since it would be difficult to give up the lifestyle to which they have become accustomed. “Sin now, pay later” would be the norm for those who can afford it. Yes, the affluent may turn off the lights more often when leaving a room and switch to a more energy-efficient vehicle, but they still might drive around the block just to pick up a carton of milk instead of walking!

Despite the planetary crisis we face, everyone would still be subjected to the same pressure to consume through the advertising barrage that artificially shapes false needs and desires in people. This is because capitalism requires the creation of markets for its commodities, which are designed to wear out, become obsolete, and require replacement.

With Hansen’s system, we would still have an exchange economy that voraciously devours natural resources. Only a steady-state, zero-growth, use economy that recycles everything will allow us to satisfy basic human needs while leading a satisfying and fulfilling life in harmony with nature.  The gross over-consumption of raw materials, which is rampant in the industrial North, no longer needs to exist. As the production of clean technologies increases, they can be exported to improve the quality of life for people in the global South without the maldevelopment that China and India have gone through.

A crash program to transform production

With Hansen’s plan, we would be burning hydrocarbons into the indefinite future. There are differing views on how much we would need to leave in the ground to keep the climate from entering a stage of chaos. The International Energy Agency says two-thirds, while Bill McKibben advocates that three-fifths remain unused.

Both are unacceptable compromises. Even if we halted all emissions tomorrow, temperatures would still rise another 0.3 C. Consequently, more warming is in the pipeline due to the inertia of Earth’s natural systems. Therefore, all greenhouse gas emissions must be reduced to zero from all sources as soon as possible to draw down carbon to a safe 300 to 325 ppm CO2 and cool down the planet. This is the only reasonable way to proceed. Thus, the solution is to leave all fossil fuels in the ground and wean our society completely off of them.

Rather than fiddling with financial schemes, getting a crash program of renewable energy up and running should be the top priority. This can be paid for by funds now given over to the war budget and implemented through the equivalent of a wartime mobilization similar to that of World War Two, when industry was completely retooled and rationing, recycling, and conservation were widely instituted. The implements of war can also be melted down and reused by hammering swords into plowshares.

Only a workers and farmers government would be capable of launching such a massive undertaking. The entire productive apparatus, placed under democratic workers’ control, would have to be directed toward the retooling of industry for the green manufacture of wind turbines, photovoltaics, electric train locomotives and carriages, and other necessities. This would occur along side the conversion to organic farming, which doesn’t need petrochemicals.

The enterprise would require the unleashing of tremendous human creativity as well as collective and cooperative action. Revolutionary ecosocialists prefer to fight for this because we do not believe that fee and dividend will bring down the Fossil Fuel Kingpins, whom Hansen considers guilty of crimes against nature and humanity. Only working people and the oppressed, struggling independently in the streets, have the power to do that.

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[Editor’s note: We reprint this article by the Committee for the Abolition of Illegitimate Debt (CADTM). In 1989, the Bastille Appeal was launched, inviting popular movements throughout the world to unite in demanding the immediate and unconditional cancellation of the debt of the so-called developing countries. This crushing debt, along with neo-liberal macro-economic reforms imposed on the global South, has led to an explosion of worldwide inequality, mass poverty, flagrant injustice and the destruction of the environment.


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