Here is the interview

In August of this year, I will be getting married. A few years after that, I plan to have children. Some nights I lie awake and wonder what kind of world they will inherit. For this reason I am strongly in favor of action to reduce carbon emissions and halt the trend of human-induced climate destabilization.

I have followed the debate concerning which is the best strategy: carbon tax or cap and trade. They each have their strengths and weaknesses and, as always, the success of either will come down to the details of implementation. Time is short, we are told, and we must act now – our window is small. 80% by 2050 is the recommended target. Since a cap and trade system is the only option that gives us some certainty we can meet this ambitious timeline, it is my preferred strategy. A carbon tax would, perhaps, be simpler to implement, but there is no way to ensure reduction targets – that part would be left up to the market. Furthermore, taxes are not a permanent structure and are subject to changing politics. Mind you, a cap and trade system as implemented in the EU is an even worse option so let me outline what I believe to be the absolute requirements for an effective cap and trade system.

1) Carbon credits must not be given away free. This will only result in a windfall to the wealthiest and worst polluters. Auctioning credits would be better but care must be taken that this does not create a significant disadvantage for smaller industries and businesses.

2) Carbon offsets – money spent on reforestation or alternative energy research – must not be allowed to substitute for credits. Carbon offsets must be supplementary only or they will erode our efforts.

3) Safety valves that allow additional credits to be issued in times of distress must be disallowed or kept to a bare minimum for the same reason that offsets must be carefully controlled. Safety valves that open too easily will forever leak carbon. If any form of safety valve is used, I recommend a structured reduction in the availability of it over time.

4) For simplicity and maximum coverage, carbon should be capped where in enters the market, not where it is released into the atmosphere. This includes all GHG emissions, not just CO2.

5) Finally, the revenue generated by selling carbon credits must be returned directly to citizens, not added to general government revenue. This will mitigate the hit that low and middle income families will take as the price of energy rises. For this purpose, I recommend delegating, to a regional or national Trustee, the responsibility of setting and selling credits and recycling revenue. Every long-term resident is a beneficiary of the Trust which pays dividends, one share per person. This structure has several benefits:

a. It returns cash to people in the most equitable fashion, helps offset the inevitable carbon cost increase, and sets up a third form of income that will benefit low income families the most. It is, thus, fair and progressive.

b. It can be used to grant representation and rights to future generations, building inter-generational sustainability into the system;

c. It provides better protection for the atmosphere because Trustees are held to a much higher legal duty of care – their responsibilities are specific and dedicated;

d. Since the responsibilities of a Trustee are specific and dedicated, delegation of this most important task would dramatically speed up the transition.

This final point should also help in responding to one of the main arguments against a cap and trade system: namely that it is more complex than a tax and will take longer to implement. That being said, a tax on carbon remains the most expedient options for pricing pollution and is preferable to no action, so I strongly urge you to include it in your next budget. The same requirements apply, though. First, the tax must be revenue neutral. By that I mean that it must be returned to citizens in the form of tax credits. I do not consider spending the revenue on public works or “green projects” to be revenue neutral any more than spending property tax to maintain our roadways is revenue neutral. Second, the tax must be significant. An article on the Progressive Economics’ website titled Carbon Tax vs Cap and Trade suggests that in order to have any real effect, the tax must reach $100 per ton. Obviously this steep a tax cannot be introduced immediately without adverse effects but we must plan towards it. The common consensus is that $30 per ton ought to be the minimum starting point.

The ideas above are not mine. The Trust concept has been put forward by Peter Barnes in the books Who Owns the Sky and Capitalism 3.0, links to which can be found at http://www.onthecommons.org/.

At present, the cost associated with the use of the commons we call the atmosphere, is zero. This must change and I fully support any such action. In addition to immediate action in the upcoming budget, I urge you to adopt a near-term strategy that places management of our atmosphere in Trust for all citizens, present and future.

Sincerely,

Ashley Webster