Neoliberalism and Climate Change

By Juliet Schor, professor of sociology at Boston College and author of numerous books, including The Overworked American (1991), The Overspent American (1997), and True Wealth (2011). From the text of a speech presented at the 45th anniversary celebration for Dollars & Sense, which maintains Triple Crisis blog, on November 14 at the Nonprofit Center in Boston, Mass. Originally published at Triple Crisis

We are in the midst of a terrifying climate emergency. Whether it’s the record-challenging cold of this week, devastating wildfires, Category 5 hurricanes, flooding on Morrissey Boulevard in Dorchester, Mass., when it’s not raining, the permanent disappearance of glaciers, intensifying drought and climate migration, or the relentless upward march of average temperatures, signs of climate disruption are all around us. This is partly due to the power of neoliberal economics.  Naomi Klein has made an interesting observation about the relation between the two, which is that it was bad luck that neoliberalism surged just as we figured out the need to do something about greenhouse gas emissions. I’m not convinced that the fossil fuel industry wouldn’t have done just what it did and been as successful even if we were still, in the famous words of Richard Nixon, “all Keynesians now” but that’s something we’ll never know. In any case, evidence of the ability of a now discredited economic approach (neoliberalism) to hang on long past its sell-by date is all around us.

One sign is last year’s Nobel Prize—starting with the exclusion from the prize of Martin Weitzman, whose work on fat tails (i.e., catastrophic climate impacts) was a truly pioneering contribution in a subfield that has lagged far behind on incorporating theoretical innovation from elsewhere in the discipline. I should add that this approach formed the basis of Frank Ackerman’s last, excellent book, Worst Case Economics: Extreme Events in Climate and Finance (Anthem Press, 2017). The omission of Weitzman contrasts with the awarding of the prize to William Nordhaus. Nordhaus’ work has been central in stalling effective climate progress. His position was epitomized by his Nobel lecture. One of his slides labeled 4° Celsius of warming as “optimal,” rather than the truly devastating increase scientists have determined it will be. The levels of ecosystem and human disruption that will prevail with a  4° increase are massive, and whether humans would even be able to “adapt” to that level of increase is questionable. Furthermore, the likelihood of tipping points that lead the climate system to spiral out of control are much greater with an increase of 4°. Only a truly deranged economic paradigm could label such a pathway as “optimal.”

What accounts for such a result? The ostensible rationale for go-slow climate policy is that income today is worth more than income in the future. But aside from the patent immorality of that view, it doesn’t even make sense on its own terms. That’s because growth today is mainly yielding increases in the incomes and wealth of the already wealthy. While the standard models such as Nordhaus’s Dynamic Integrated Climate-Economy (DICE) model, don’t incorporate this distortion of the growth process, it is now well-documented that business-as-usual growth is yielding increased concentration of wealth at the very top. So the neoliberal approach to the climate crisis essentially says that we should destroy the planet to further enrich a tiny sliver of humanity that already has an obscene amount of wealth.

Years ago a group of French graduate students in economics started a movement called “post-autistic” economics. They were rightly criticized for their use of the term autistic, and the contributions of Greta Thunberg show how wrong they were about neuro-atypical people—and their ability to see what’s really going on. They changed the name of their journal from Post-Autistic Economics Review to Real-World Economics Review. In that they also faltered, failing to acknowledge that Dollars & Sense already had that franchise. Perhaps they should have called their movement “post-sociopathic” or “post-ecopathic” economics.

So what would an alternative approach, embodied so well in 45 years of analysis from D&S, suggest as a response to the climate crisis?

First, carbon taxes in the range that have been suggested ($40–$50 a ton) are inadequate. It’s too late for the market-based, go-slow approach. Indeed, roughly a decade ago Frank Ackerman and his co-author Elizabeth A. Stanton did estimates of how high a carbon tax might need to be under various assumptions, including lower discount rates than mainstream economists assumed at the time, and Weitzman-like analysis aimed at avoiding catastrophe. These assumptions all yielded far higher estimates than the “politically feasible” carbon tax range, and even went as high as $1,500 a ton under the most stringent assumptions. It’s notable that the Intergovernmental Panel on Climate Change is now also coming up with top-end estimates broadly in that range. A key thing about a tax in that vicinity is that it is so disruptive of the market that it has to be accompanied by a robust and comprehensive role for the state. And that of course is the point of the galvanizing, if still not fully elaborated, Green New Deal. Furthermore, the current Green New Deal, unlike those that have been proposed by progressive economists for decades now, is notable in putting equity and justice at its core. Although there is plenty of debate about the wisdom of this approach in the climate community (with a fair amount of skepticism coming from privileged participants), there’s little doubt that thisGreen New Deal has mobilized people in an unprecedented way.

This brings me to a related point. In order to fully confront climate change, we need to address other structures of the economy than just the price of carbon. In my own research I’ve worked on two key drivers of carbon emissions, both of which are very much in the spirit of D&S’s approach to economics. The first is hours of work. In a series of papers at both the national and subnational scale, my colleagues and I find that average hours of work are strongly correlated with emissions. Countries with long hours are high emission countries, holding other factors constant. The same is true for states. And short hour countries have low emissions. We find that this is true for two reasons. First, longer hours result in more output, which has associated emissions. But even controlling for this effect, higher hours are still associated with more emissions. We suspect this is an affect at the household level—more work correlates with more commuting, and more carbon-intensive lifestyles.

A second area of work is domestic income and wealth concentration. While most of the research on climate and inequality focuses on North-South inequities, or disproportionate impact on vulnerable populations wherever they live, my colleagues and I have been analyzing another dimension of inequality. We look at how the concentration of income and wealth at the top of the distribution (the top 10%, 5% and 1%) is associated with higher emissions. We believe this is due to two factors—the very high carbon footprints of people at the top and a political economy effect, in which the wealthy have outsized political impact and are able to forestall effective climate responses.

I want to end with a few reflections about my experience with D&S. I had the great privilege to work there (not for pay, but for many hours per week) back in 1976. I was just 20 years old, had left my first graduate program because it didn’t offer a critical perspective, and I was waiting to matriculate at UMass. Arthur, Frank, and others were extremely welcoming as I showed up on their doorstep with nothing more than eagerness and eight months to spare before the fall semester began. For me, it was the beginning of a lifetime of popular writing.

In those days, articles were fully collectively written, which included wrangling over every word. It was a great learning experience, both about economics, but also about collective process, political commitment, and real world politics. This was a time when racial tensions were high and the fight to desegregate Boston was raging. The collective volunteered to help protect a black family who had moved onto a “white” block in Dorchester and was being threatened and attacked by white vigilantes. I remember sitting on that family’s porch, baseball bat in hand, with others from the group. I’m not sure what I could or would have done with that bat had an attack come, but it was a powerful experience. And as much as I learned about economics in those eight months, I suspect that I learned even more about solidarity and political commitment. Congratulations to D&S on a brilliant nearly half century.

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36 comments

  1. Ignacio

    There is a quote from The Wolf (Harvey Keitel, Pulp Fiction) not apt for a family blog, but very apt to describe what a Nobel Prize is, and most prizes indeed are. It is about sucking…
    Nordhaus reinforces the conservatism of Sveriges Riksbank so he deserves the prize. I wouldn’t ever expect the prize being given to cutting edge studies that question the validity of day-by-day assumptions embedded in institutions like S.R.

    Reply
      1. JEHR

        You are right that the Nobel Prize in Economics is not a Nobel Prize and it is awarded by a bank. Plus, Milton Friedman won in 1976: that tells you a lot about why classical economists are mainly chosen.

        From Wickipedia:

        In February 1995, following acrimony within the selection committee pertaining to the awarding of the 1994 Prize in Economics to John Forbes Nash, the Prize in Economics was redefined as a prize in social sciences. This made it available to researchers in such topics as political science, psychology, and sociology.[29][30] Moreover, the composition of the Economics Prize Committee changed to include two non-economists. This has not been confirmed by the Economics Prize Committee. The members of the 2007 Economics Prize Committee are still dominated by economists, as the secretary and four of the five members are professors of economics.[31] In 1978, Herbert A. Simon, whose PhD was in political science, became the first non-economist to win the prize,[citation needed] while Daniel Kahneman, a professor of psychology and international relations at Princeton University is the first non-economist by profession to win the prize.

        It seems strange to me that non-economists would be awarded a prize for the economy. The bank certainly knows who to select though!

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        1. teacup

          Milton Friedman was monetarist who taught at the premier neoclassical school, the University of Chicago. Karl Marx was the premier classical (political) economist. The neoclassical school gradually came to deny land as a distinct factor of production, John Bates Clark (whom there is an award named after) solidified the conflation of land and capital. This is why many of the neoclassical models are pseudoscience, unreflective of the real world.
          Both awards pander to the rentier class.

          Reply
  2. Joe Well

    >>We look at how the concentration of income and wealth at the top of the distribution (the top 10%, 5% and 1%)

    I wonder why not at the top .1% and .01%. That is when youbget into Gulfstream Jet territory.

    Reply
  3. Ignacio

    Regarding the correlation between long hours work and higher emissions there is an obvious link: the longer hours the more hurried commuting, hence commuters prefer their own cars and traffic jams ensue. Stress also reduces our chances to think twice what we are doing with our lives and environment.

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  4. cnchal

    What? Not even a breath about the insane system called globalization, where raw material from all over the world is shipped to China to be processed into finished goods in the most polluting way possible, to have those goods then shipped and trucked to the Amazon horrorhouses and Walmart stores to be bought and then thrown in the trash a few months later.

    Cognative dissonanace much? Lots of economic activity there, with nothing to show for it except a growing heap of trash and Bezos and the Waltons getting richer by hundreds of millions per day. What a phucking world.

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    1. Susan the Other

      Her premise, that neoliberal economics is past its sell-by date, is almost too little too late. It was past its sell-by date by 1950 when it was just getting its second foul wind. We are in this fix because it was so easy to get here. By using oil for energy. Nobody has used the butterfly metaphor for oil fed climate change, but it describes the mess. Every individual use of oil/natgas for our modern lifestyle puts a whole series of requirements for the very maintenance of that lifestyle – which (like her comment that more work hours propagate not just more emissions but more manufacturing and more consumption is a vicious circle) expand exponentially. And what she says point blank, “the thing about a sufficiently high carbon tax is that it is so disruptive of the market that it has to be accompanied by a robust and comprehensive role for the state” is just pure poetic justice.

      Reply
  5. level

    People who understand that global warming is reality defeat their own arguments when they fail to understand the difference between climate and weather. Failure: “Whether it’s the record-challenging cold of this week…” That cold weather is not proof of climate change.

    Reply
    1. jsn

      I disagree.

      When the statement is part of a series that are all happening at the same time, it is addressing climate, not weather.

      Statistics defy narrative, narratives ellide statistics. But effective communication for a mass audience needs to engage heuristic thinking, as this essay does.

      Reply
  6. Stadist

    We believe this is due to two factors—the very high carbon footprints of people at the top and a political economy effect, in which the wealthy have outsized political impact and are able to forestall effective climate responses.

    I have my suspicions about general carbon footprints based on income levels. I suspect that many less affluent people end up commuting more because of housing usually being more costly in cities and immediately nearby cities. Think about it for a moment, are all the affluent neighborhoods close or far from local centers of employment? In my view the implication is that carbon footprint from driving around is a necessity for large part of lower income population while car use comes out more as a luxury, a free choice, for more affluent people – they have the financial means to find housing relatively close to the work, while lower income people don’t have this choice.
    Extrapolating more, I would suspect that most of carbon footprint is at least partially a necessity for lower income people, while the for higher income people the larger carbon footprint represents free choice and conspicuous consumption – they do it because they can.

    There are really easy ways to decrease carbon footprint: Dense and functional cities to enable anyone make the climate friendly choices of not driving car around. But there is extreme opposition to these kind of dense affordable cities, even in my seemingly progressive nordic home country. Most of all, housing is seen as a open market business instead of personal right. This is important, as this prevents the EU countries of more forcible interventions in to the housing markets but this whole situation is just insane right now as most EU countries get loans at negative rates, they could easily build and rent out housing at ‘market’ prices with really low margins and still at profit for the state. In my view states should intervene forcibly to urban housing markets to push out new quality housing to disrupt and drop the general market prices at the moment. Many people, and especially working people, are staying out of larger cities because the general prices are too high for them. State intervention would enable anyone to make the ‘right’ choices and then heavier carbon taxes could be enacted and people would still have free choice to live where they want and drive car if they want. But this isn’t possible because the free market principles are applied to housing markets by EU antitrust officials and this prevents state interventions.

    The most ridiculous part of this whole thing that ideology of free market capitalism and how it’s applied prevents this, it’s more important to preserve the wealth and rights of owners in the cities instead of doing the right things. Meanwhile neoliberals and european ordoliberals are shouting with their heads red that debt is bad and demanding that all the member countries must work hard to reduce their debt levels no matter what happens. These people say they agree that climate change is real, but his acknowledgement is just cynical gaslighting from them, as the only actions they will approve are debt reduction, tax reduction and privatization of public goods. For them, the state is the problem, not the solution.

    Rich and affluent people have hijacked the whole economic discussion and most important is ideology of protecting property rights and ‘individual’ freedoms, to the detriment of our planet and all of us living on it.

    Reply
    1. jonginsf

      I think the ‘high carbon footprints of people at the top’ has less to do with the direct contributions of those at the top than the constellation of resources that are oriented specifically around their serving their needs. Those resources include the very individuals you describe and their own consumption habits, which in turn find subservience in the market further further down the chain, and so on. The consumption mix at the bottom is highly price sensitive, arcing itself towards plastics and petrochemicals.

      Reply
  7. chuck roast

    I kept thinking, “whose Arthur?” I knew there was an old URPE Arthur. Then it dawned on me, Art MacEwan.
    https://www.umb.edu/academics/cla/faculty/arthur_macewan
    D&S was a direct descendant of the seminal (semi) monthly URPE Journal of the late sixties early seventies. I was ravenous for that wonderful yellow rag. It helped me develop an actual world-view…desperate times required desperate measures.

    Ackerman has passed away, and the history of that rich and chaotic intellectual ferment needs to be told. It’s getting late.

    Paging Sam Bowles, paging Sam Bowles…

    Reply
  8. TG

    Ultimately it’s all about population growth, and in particular, government policies aimed at maximizing population growth, and top-down pressure from the rich to censure any discussion of this topic. That’s why they recently gave a Nobel Prize to some economists pushing ‘solutions’ to poverty in places like India that have been demonstrated over and over not to work: because the policy that does work is to limit fertility rates (example: China post-Mao), and the the rich don’t want that, because they love cheap labor.

    And no, it’s not the standard of living, it’s the numbers. India is miserably poor, but incredibly polluted and a major and increasing source of global CO2 emissions. Canada has per-capita energy consumption greater than the United States, but for the time being, until the rich force it upwards (the neoliberal government is aggressively pushing to increase Canada’s population to at least 100 million, if not more) a small population. So Canada’s environment is pristine and it barely registers on the global emissions charts.

    The “Climate emergency” is simply the realization that population growth has gone beyond just driving wages down and profits up, but perhaps threatens the world itself. So the solution is to force the average person to live like a battery hen, so the rich can keep jamming in every more people. And jam in more people they will.

    The alternative would be to be like Japan: let the people themselves decide the population, and if it slowly declines for while, take advantage of that. It’s not just the raw decline in numbers: Japan doesn’t need the massive and polluting investments in infrastructure that a rapidly growing population does, it can spin off relatively wasteful uses of energy and keep the more efficient ones, and slow improvements in efficiency will not be wiped out by population growth, but will accrue. There will be challenges – mostly switching to a financial system that does not rely on growth-driven debt – but Japan could be the model for how to deal with ‘climate change’ without having to live like a Pakistani.

    Until this is recognized, reductions in personal consumption will simply be wiped out by increases in numbers. Conservation is pointless masochism. But not to worry, even without specific policies, before too long the standard of living of the average person will be reduced to a ‘sustainable’ minimum. In the meantime, I say enjoy the party while it lasts.

    If the titanic is sinking, and there is nothing you can do about it, refusing to have that last drink on the grounds of moral rectitude is silly.

    Reply
    1. Robert Valiant

      I think your argument against conservation hinges on you being correct in your own belief that it’s futile. You certainly haven’t made a convincing argument that population growth will necessarily overwhelm any other conceivable social changes. Your faith in futility and decadence is attractive though. If I shared it, I would live a very different life than I’m living right now.

      Reply
      1. Ignacio

        For what I can account there are at least three stages of negationism regarding climate change action:

        Stage 1: there is no evidence of such a thing like climate change (Exxon stage)

        Stage 2: OK, there is climate change but we don’t have to worry, it is even positive (Nordhaus stage)

        Stage 3: OK, there is climate change and it will be awful but… Population! Population! This serves to forget the not so comforting fact that a relatively small part of the population is responsible for most emissions. (Population! stage)

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    2. drumlin woodchuckles

      Its the standard of living and the numbers. The Indian emissions are going up as several hundred million Indians have become not incredibly poor any more and have adopted modestly middle class standards of consumption. If all 1.3 billion ( and rising) Indians become modestly middle class, Indian emissions will be even higher.

      And if America is emitting more carbon than India is, despite having way fewer people, that goes to show the role that level of consumptionism plays in carbon emissions.

      Reply
  9. Roger C

    “The ostensible rationale for go-slow climate policy is that income today is worth more than income in the future. But aside from the patent immorality of that view, it doesn’t even make sense on its own terms. That’s because growth today is mainly yielding increases in the incomes and wealth of the already wealthy.”

    This is an important point I have not seen made before. In doing a discounted cash value analysis or net present value calculation, it is always assumed that future revenues must be discounted in value by the “time value of money”–essentially an interest rate. That seems sound when a firm is selecting from an array of potential capital investments that will be repaid with profit by future revenues. But it makes no sense when the future revenues (or costs) will go to someone other than the investor. In the case of a climate change policy, the beneficiaries (or victims of non-action) will be overwhelmingly our children, grandchildren, and later generations. As Schor points out, there is no moral basis to value their lives and experience lower than our own. Neither is there any economic basis. Both would be true even if overweighting the present did not benefit primarily today’s wealthiest. The whole idea of a business case analysis makes no sense in a public policy analysis where the investors and the beneficiaries (or victims) are not the same people. If we insist on doing a discounted cash flow analysis, the discount rate should be zero.

    Reply
  10. Jeremy Grimm

    It is difficult to comment on this post. It ranges from ‘Nobel’ prizes for economics to Greta Thunberg and concern about uses of the word ‘autistic’ as a label to wealth concentration to Carbon Taxes and climate “equity and justice” ending with reminiscences of 60s activism. The post’s title at least suggested some analysis of the relationships between Neoliberalism and Climate Crisis — which I felt was at best treated as a sub-theme used to introduce a range of other concerns.

    The sentence: “So the neoliberal approach to the climate crisis essentially says that we should destroy the planet to further enrich a tiny sliver of humanity that already has an obscene amount of wealth.” —
    contains the essence and extent of such analysis of Neoliberalism related to Climate Crisis as this post contains. I think this kind and quality of analysis is neither particularly useful for understanding the relationship between Neoliberalism and Climate, nor helpful toward clear understanding of Neoliberalism. To effectively oppose Neoliberalism requires understanding Neoliberalism and its underpinnings. The discussion following this sentence regarding carbon taxes and the market-based approaches to dealing with Climate Crisis are all too accepting of the Neoliberal framework constraining Climate Change remediation to the Market. The Climate Crisis we face is an existential crisis of the sort no economics or Market can address. That statement clashes directly with one of the key axioms of Neoliberalism — that the Market alone can know and decide how to best handle problems like Climate Crisis. Reject that axiom and it makes little sense to discuss market-based approaches.

    The range of concerns expressed in the post works to scatter and dilute discussion by introducing so many topics only loosely related to the relationship between Neoliberalism and Climate Crisis. This scattering of discussion is useful as rhetoric for the status quo — whose proponents hold the megaphone — but poorly serves the opposition whose scattered voices become lost in noise.

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    1. Roger C

      “The discussion following this sentence regarding carbon taxes and the market-based approaches to dealing with Climate Crisis are all too accepting of the Neoliberal framework constraining Climate Change remediation to the Market.”

      Good point, JG. Long-time advocate of carbon pricing, Robert Stavins, has suggested a better way forward now is command and control. http://www.robertstavinsblog.org/2019/05/30/the-future-of-u-s-carbon-pricing-policy/ The reason is that voters don’t trust carbon pricing. They see it as a tax, and they think government, the polluters, or both are ripping them off. They prefer to see obvious sources of pollution forced to clean up right where the pollution is occurring. He also says that the economic efficiency differences between carbon tax, carbon trading, and command/control are small.

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      1. drumlin woodchuckles

        Hansen tries to address that zero-trust-in-government problem by having all the money raised by his suggested FeeTax at first point of raw carbon sale being handed to a separate agency for complete division and repayment to all legal residents as a Carbon FeeTax Dividend. With ZERO of the Carbon FeeTax money going to any government anything of any kind.

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        1. Jeremy Grimm

          I regard Hansen with extremely high regard as a Scientist and Activist. But … I am not so compelled by his ideas for remedies. I view carbon taxes and their like as half-measures. We are at the time of carbon constraints, and carbon rations — and even that buys-in too much with what is politically viable. I believe Hansen is too ready to compromise to what he perceives as viable in the present political milieu. But I also believe we can no longer restrain ourselves to what is currently ‘viable’. We must push past that — for the sake of our survival and the survival of future generations of Humankind.

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          1. drumlin woodchuckles

            Well . . . that may be the Tragedy of Democracy.

            If it isn’t even legislatively and regulatorily achievable within a Democracy framework, then it is certainly not even possible within a Democratic Society framework. And if we push for the “past that” when we can’t achieve it in time to re-reduce the skyheater gasload, we will not achieve anything.

            Whereas if we push for the politically-viable, like a Full Metal Hansen first-point-of-sale FeeTax on carbon fuel coupled with rejection of every Free Trade treaty and agreement so that we can exclude the inevitable attempts at carbon dumping by our trading enemies; then we can see if that is having a swiftly measurable effect. And if it isn’t, we can push for adding more.

            But . . . those two approaches are indeed two different theories. And each theory could attract its own proponents and seekers-to-apply. That would be two TAGs pursuing their two TOCs.

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      2. Jeremy Grimm

        I agree command and control are the — only — appropriate means for dealing with Climate Chaos. I believe we must cast off notions of a market as the solution for something for which no market is appropriate — like the Climate Crisis. For me, the point of the comparison between Climate Crisis and War is that neither is a matter the Market is suited to decide. How can the Market decide a matter where the costs can/should not be quantified? How would you price your existence or that of your children and children’s children? Would you leave such decisions to whomever has the most funds to spend directing the choice? With what regard do these ‘kindly’ persons real and ‘legal’ value us and our children, and their children?

        Carbon tax, carbon budgets, costs of Climate Chaos calculated into ‘economic’ models — baloney!

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        1. drumlin woodchuckles

          The Hansen FeeTax is explicitly NOT intended to price the existence of you or me or our children.

          Its explicitly stated purpose is to steadily rise to where the fossil carbon industry is exterminated by making the FeeTax so high that so too-few people can afford to buy it at all that the fossil carbon industries can not survive on the tiny layer of super-rich customers who remain.

          The purpose of the Dividend along the way is two-fold. Number one, to indisputably show that the treacherous deceitful government is getting ZERO! ZEE! ROW! of the money. And number two, to permit the middles and the poors to stretch their dividend money farther by buying low-carbon/ low-priced-in-FeeTax goods in preference to high-carbon high-priced-in-FeeTax goods.

          If every Middle and every Poor gets a thousand dollar FeeTax dividend, and the carbon FeeTax is so high that a plastic chair has to cost a thousand dollars whereas a wooden chair gets to cost a hundred dollars, the Middle and the Poor will prefer to buy the wooden chair.

          At least, that’s the theory.

          But it will only work in a belligerent militant protectionist national economy. If Free Trade is permitted with our trading enemies, they will refuse to enact any Hansen FeeTax on their fossil carbon first-use/ first-sale. And they will sell their plastic chairs here for $50 apiece where the wooden chairs would cost a hundred dollars. In that Free Trade scenario, the Middles and the Poors would spend their Hansen FeeTax Dividend on the $50 plastic chairs imported from our no-Hansen no-FeeTax trading enemies. And our effort would fail.

          Reply
          1. Jeremy Grimm

            I believe any sort of approach to Climate Chaos based on the Market and economics is doomed to fail. We are past the point where such approaches might … might … work. We are past worrying about what is deemed politically expedient or the politically feasible. It is time to worry about survival. Nothing is politically expedient or feasible if fail to survive.

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            1. drumlin woodchuckles

              Nothing will help us survive if it isn’t politically acceptable enough to get passed and enforced.

              But demanding the imposition of measures which the political system will never permit and which the heavily armed half of the population will never accept is certainly worth a try. So go ahead and try.

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          2. Roger C

            Until more or less right now, I have favored command/control programs because almost all the cleanup of the air since 1970 has been accomplished that way, while almost all the CO2 trading systems have (so far) failed. Building on what works seems a good idea to me. However, the main problem I see with command/control is that it is slow. Regulations governing particular types of sources have to be developed case by case, based usually on the best available technology, a moving target. Limited staff cannot promulgate regulations on everything at once, and each new reg is subject to two years or so of development and several years of litigation challenge. In contrast, a tax can squeeze every emitter at once without any pressure (or assistance) from government technocrats. Further, SCOTUS has in the last century been very reluctant to second-guess Congress on taxes and are not likely, I think, to declare unconstitutional a uniform tax that practically drives some firms out of business. The main weakness of pollution taxes is that Congress has shown itself very amenable to lowering tax rates and creating loopholes–to a much greater extent than tinkering with the Clean Air Act.

            So, I come out agreeing with Stavins: The details within a tax, trading, or command/control program are more important than which of those one chooses. Let’s do what we can get passed.

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      3. Lambert Strether

        Pretty ironic that neoliberalism’s forty-year assault on big gummint and “no new taxes” has made one of their preferred solutions, a carbon tax, “politically infeasible.”

        Mistakes were made…

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        1. Jeremy Grimm

          I am not an expert, but I am inclined to disagree based on my limited understanding of Neoliberalism. Neoliberals borrow rhetoric from Libertarians. But big gummint is important to Neoliberals as a source of profits and as means to implement Markets, and protect and serve profits and profiteers. Neoliberals do oppose taxes if they interfere with making or keeping profits. I am not sure whether they care about taxes on the little people. Taxes add another burden for the little people to carry which helps keep them too burdened to rise up and helps keep them in need and willing to work.

          I view Neoliberalism as a broad tool a faction of our Elite sponsored to serve their purposes. In spite of its rhetoric Neoliberalism does not oppose big gummint. Big gummint is necessary to construct the Markets for ‘solving’ problems. The carbon tax is not a preferred solution, indeed it undermines their preferred solutions which are carbon trading from which profits can be had followed by geoengineering from which even more profits can be had. A carbon tax is more in line with old school economic theory that would treat carbon as an externality which should be taxed to create a cost. Neoliberalism prefers to handle such problems by designing a Market to solve the problem.

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  11. Henry Moon Pie

    Implications for JG?

    This brings me to a related point. In order to fully confront climate change, we need to address other structures of the economy than just the price of carbon. In my own research I’ve worked on two key drivers of carbon emissions, both of which are very much in the spirit of D&S’s approach to economics. The first is hours of work. In a series of papers at both the national and subnational scale, my colleagues and I find that average hours of work are strongly correlated with emissions. Countries with long hours are high emission countries, holding other factors constant. The same is true for states. And short hour countries have low emissions. We find that this is true for two reasons. First, longer hours result in more output, which has associated emissions. But even controlling for this effect, higher hours are still associated with more emissions. We suspect this is an affect at the household level—more work correlates with more commuting, and more carbon-intensive lifestyles.

    We need to cut the amount of churn, not increase it.

    Reply
  12. Jon Cloke

    1) There is no market-based ‘solution’ to anthropogenic global warming – AGW comes from the mass industrialization processes harnessed to mass consumption, themselves harnessed to a rentier capitalism which relies on *accelerating* consumption to increase profitability, which means accelerating waste, which means accelerating AGW. Carbon taxes, Carbon bonds, setting a ‘realistic’ price for carbon are all massive creative accountancy fraud which will not be permitted by our corporate overlords and which would not work in any case.
    2) Any realistic efforts to palliate/slow down/halt AGW would require massive combined-state/supranational efforts on the part of state actors who no longer believe in the state and which would act against the interests of the corporate behemoths who own those state actors.
    3) You cannot have mass consumer capitalism and have a habitable planet – the two are mutually incompatible. But the 1% driving eco-destruction have simply decided that so long as they die with the most cash, properties, portfolios and stuff, they win, and let the future take care of itself.
    4) There is no ‘green economy’ related to capitalism which allows (say) the bolting of renewable energies and ‘sustainable’ production to existing capitalism, and away we go again – this is a childish fantasy created to pretend capitalism can be made sustainable. It can’t.
    5) There are no geo-engineering solutions that can suddenly alleviate AGW – at the moment we barely understand the complex feedback loops which are likely to extinguish humanity, and the idea that without understanding those mechanisms we could (e.g.) place giant mirrors in space (God help me) and so save the day for humanity to carry on with capitalism is…. is….. I can’t think of a word stupid enough.
    6) Consumption = waste and every day more and more human beings are being indoctrinated to think that without the new iphone which will be along in ten minutes they are less than human. It is the way that human psychology itself is being used to entrain mass consumption that will doom humanity – we will consume everything we need to survive as a species and then ourselves.
    7) The idea that COP talks and making alliances with corporations is somehow doing something is an awful, awful lie that prevents the realization that the things we could do represent an end to consumerism and a sea-change in human relations. Above all, AGW is not going to wait until we get our climate change ducks in a row: “It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear! And it absolutely will not stop, ever, until you are dead!”
    8) Kiss your kids good-bye – make sure to tell them not to have kids themselves.

    Reply
    1. drumlin woodchuckles

      The 1% are not thinking in terms of winning by dying with the most toys. They are thinking in terms of winning by surviving while engineering the die-off of the other 99%.

      In other words, the 1% and especially the OverClass OverLords are thinking in terms of applied jackpot design engineering to eliminate the 99%.

      Their mission is to make sure they alone survive. Our mission should be to make sure that unless we survive we will not permit them to survive either. They have no right to survive the jackpot they are designing for the rest of us.

      Reply

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