“Duly noted - Hansen indeed advocates “tax and dividend.” Of course, as you are undoubtedly aware, a cap is theoretically equivalent in function to a tax. The basic mechanisms underlying “tax and dividend” and “cap and dividend” are the same: a carbon price (levied either through an allowance market or a fuels tax) is imposed, and a proportion of the proceeds (Hansen wants 100%) are returned to consumers.”

My criticism is directed toward the general idea of sending carbon price revenues back to consumers, what Hansen definitely DOES advocate for, rather than using them for clean energy RD&D. Semantic nitpicking aside, this criticism applies equally well to both “tax and dividend” and “cap and dividend” schemes.

Who’s future would you rather have?

I think I’ll stay with Dr. Hanson.

I don’t want to dwell on this, but here are the quotes I’m referring to:

“I do not understand how we will dramatically alter our energy system and spur the rapid deployment of clean, climate-safe energy sources if we rely solely on capping carbon emissions and pricing carbon while returning 100% of the dividends to Americans.”

“If you do recognize the need for major federal investments in clean energy infrastructure and technology, please tell me where we’ll get the money if auction revenues are off the table. I don’t get it.”

I’m sorry that you felt insulted, but both passages are clearly in your post.

Also, I’m sure you understand that a Cap & Dividend or Tax & Divend system is totally different than than a Cap and Trade system– you may want to explore why Cap and Trade failed in the EU and how either system would adress those failures.

I’m glad you’re working on finding those answers, but I’m amazed that they haven’t been figured out yet. They strike me as the core questions anyone would ask when they first decide to undertake creating a climate policy.

My goal is solving the climate crisis and using efficiency, green energy, etc. to save the planet.

Answers (For any of these you could read either of the Barnes’ books or see the writings of Reich, McKibbon, Rockridge and others)

#1: How high of a carbon price is politically sustainable in the United States, especially given the current political climate and concern over high energy prices?

Again, I start with the goal of solving the climate crisis, so I begin with 1) how much do we need to reduce carbon to save the planet 2) what carbon price do those reductions trigger and 3) how do we make that politically viable.

One number often used is $730/ton Carbon to get to 80%– but with rising oil costs that number could rise (or drop).

MITIGATING COST IS THE REASON FOR THE DIVIDEND. Returning 100% of the auction revenue (or tax revenue) to the public protects incomes. Protecting incomes is critical to the poltical viability of any effort to solve the climate crisis. PERI did a study that showed in a Cap and Dividend system people in the first 6 deciles would get MORE money back through dividend than they pay out in increased costs (http://www.peri.umass.edu/). So, yes, the majority of people would MAKE MONEY through a dividend system.

#2: How much higher can the price be if we dividend the proceeds to everyone? (i.e. how much more politically popular is tax/cap-and-dividend than other alternative carbon pricing schemes?)

See above. I think a gradually lowering cap (gradually rising carbon cost) is the way to go.

#3: At that price, how much efficiency gains will we see? #4: At that price, how much clean energy deployment will we see and how quickly?

In a in either T&D or C&D the market would make these decisions. At the beginning, efficiency would reign because the higher energy/gas prices would force behavior changes very quickly and depolyment would follow. A great example of this works is how $4 gas created huge drops in vehicle miles traveled, along with SUV plants closing and Chavy rushing an electric vehicle (Volt) to production.

But my basic answer is: It’s the carbon reductions that matter.

#5: Given the above, when will various scalable clean energy be cheaper than coal in China (without a carbon price there)?

As soon as someone figures it out. Pricing, and phasing out carbon, in the world’s largest economy would create a powerful profit motive for figuring this out. Last year, there was $100 billion invested in green technology- creating a system that priced carbon in the US would make that explode- my personal bet is that amount will double just based on the rising oil costs we’re already seeing.

Additionally, the US would have to institute border adjustment fees on goods imported from companies with a lower carbon cost than we have. This would be a powerful incentive for exporting countries like China to create their own carbon cost system.

#6: Given all of that, when do we get to 350 ppm?

As soon as possible. The C & D plan was based on the 80% by 2050 goal, so it has us cranking the carbon valve down 2 percentage points a year for 40 years. But that % could change as the science advances. By creating a system that caps carbon & protects incomes, we’ll have the flexibility to crank down emissions more quickly if scientists say we need to.

How was Alisha disrespectful?:

She referred to Dr. Hansen’s call as divisive, she misleadingly conflated T & D with Cap and Trade, and she made several broad statements without backing them up with facts– None of which lead to a respectful debate on these important issues.

But, seriously, let me know if you guys figure out how investment can guarantee carbon reductions, what it would cost, when, etc.

What is wrong with learning about and exploring these issues together? What’s wrong with admitting that none of us have “THE ANSWER” and are passionate about getting there? I’m open to others’ ideas and thoughts in an effort to find the best policy solutions, and I do not think that Cap-and-Dividend/Tax-and-Dividend/Revenue-Neutral Carbon Tax is what the answer is. No matter how you package it the outcome is the same: a carbon price (levied either through an allowance market or a fuels tax) is imposed, and a proportion of the proceeds (Hansen wants 100%) are returned to consumers.

Moving on, I liked the questions you asked in your second to last comment. We are WORKING on finding out how much a good policy solution will cost, how fast, how much, how soon, that’s what we’re passionate about. We meaning all of us. I think the discussion going on here is largely productive and part of finding the best policy solutions, let’s continue with that. I echo what Jesse articulated in this regard.

To be clear: Breakthrough is made up of a lot of people with diverse ideas and styles, although I know we have not done the best job at portraying those differences. While we work to develop our identity, message, and policy, please try to resist the temptation to paint us all into one generalized category or dismiss our ideas based on preconceived notions of who we are.

As all of us on this blog, those of us at Breakthrough included, mull over the differences in policy and form our own, unique opinions, we need embrace the fact that we are all still learning. Hard questions should be asked of all policies on the table– if we are going to rally behind a policy, let’s get it right.

It’s important, too, to respect and encourage each other to be honest about what we don’t understand so that we can have a more productive and open conversation. I applaud Alisha’s courage in doing so. Her questions about state equity in revenue renewal are certainly valid ones, as are others’ fears about meeting necessary emissions reductions in an investment-centric approach. Let’s all display some patience with one another as we navigate the black and white and crazy shades of gray within climate policy.

-How high of a carbon price is politically sustainable in the United States, especially given the current political climate and concern over high energy prices?
-How much higher can the price be if we dividend the proceeds to everyone? (i.e. how much more politically popular is tax/cap-and-dividend than other alternative carbon pricing schemes?)
-At that price, how much efficiency gains will we see?
-At that price, how much clean energy deployment will we see and how quickly?
-Given the above, when will various scalable clean energy be cheaper than coal in China (without a carbon price there)?
-Given all of that, when do we get to 350 ppm?

(BTW, relying on natural net carbon sinks alone, which are about 2 gigatons C per year, if we cut emissions to zero tomorrow, we’d only reduce atmospheric CO2 concentrations by about 1 ppm per year… We’re at 385 ppm, so it’d take something like 35 years to get back to 350 if we cut all emissions to zero today. That’s not to say we’re doomed, it’s just to put the 350 “redline” in perspective, and to make us think about whether or not we’ll need to worry about upping that carbon sink figure, say by massive reforestation efforts and/or “air capture” techniques).

Finally, what did you find disrespectful about Alisha’s post? Please identify some specifics.

The Breakthrough folks obviously have a clear point of view and all others are dismissed out of hand despite what seems to be a lack of understanding about basic economic issues or the ins-and-outs of the other ideas.

It’s quite telling that Alisha writes “I don’t understand” and “I don’t get it” about fairly basic questions.

Frankly though, the most telling thing is that you can’t answer the basic questions of when your plan would solve the climate crisis, how much it will cost, when we’d start to see reductions, etc. (This may offer a clue as to why Hansen hasn’t embraced it)

Not to be too snarky, but I would think those answers would have been figured out earlier…