Dealing With Climate Change: The Carbon Tax

There has been a great deal of backlash from fiscally conservative entities or individuals when rational discussions attempt to determine further linkages between such human-caused disasters such as oil spills, coal ash spills, coal combustion particulates and asthma, death, or natural disasters. As President Obama cleared up in his 2014 State of the Union, “Climate change is a fact.” Secretary Kerry declared climate change to be perhaps the most world’s most fearsome weapon of mass destruction earlier this year as well and stating that it is “the greatest challenge of our generation.” With overwhelming support from both administrations and scientific communities around the world, it is difficult to understand to motives of climate-denying entities.

From an economic standpoint, however, it is easy to see that for climate-denying entities (private and public sector)—and those with ties to such entities— the potential threat of incorporating externalities is at the heart of this issue. There are increasing number of externalities that are not being accounted for by entities who sit idle as their business consumes or produces material that in turn creates external, or “social”, costs (costs to our health, environmental, infrastructure, etc.). In the free market these entities are allowed to alleviate themselves from incorporating the rapidly increasing social costs, and they may simply apply individualistic private costs. Well, to this I remind everyone that we are a collection of unique individuals in a causal nexus. The decisions of these (corporate/transnational) entities are not practiced in a vacuum. Their actions have real effects on real people for better or for worse. It is up to regulator agencies to enforce the proper inclusion of these social costs of fossil fuel extraction, production and combustion, which would otherwise be ignored by private entities.

How is this possible? The Carbon Tax Center gives a basic run-through that is pretty easy to get on board with. A carbon tax would effectively tax the carbon dioxide emissions from burning fossil fuel. Since the carbon content of every form of fossil fuel is precisely known a carbon tax presents few if any problems of documentation or measurement. Economists and policy-makers believe that the tax could be effective if it is paid far “upstream,” at the point where fuels are extracted from the earth or imported from suppliers and put into the stream of commerce. Such a tax would obey the proportions of fossil fuels that emit different amounts of carbon per unit of energy. For instance, a unit of energy from coal produces 30% more carbon dioxide than a unit of energy from oil, and 80% more than from natural gas.

To avoid runaway climate destabilization we must procure a method to rapidly reduce our carbon emotions. Climatologists like Dr. Jim Hansen suggest destabilization will result in severe weather events, inundation of costal areas, spread of diseases, failure of agriculture and water supply, infrastructure destruction, forced migrations, and international conflicts. A tax on carbon pollution will create the broad incentives to encourage decision-makers at all levels of society to reduce carbon emissions through conservation, substitution and innovation. As I have previously mentioned, prices of gasoline, electricity and fuels in general include none of the long-term social and private costs associated with devastating climate change. The omission of these costs oppress incentives to develop and deploy carbon-reducing measures such as energy efficiency (high-mileage cars), renewable energy (wind turbines, solar panels) and conservation-based behavior such as bicycling, recycling and overall mindfulness toward energy consumption. Conversely, taxing fuels according to their carbon content will infuse these incentives at every link in the chain of decision and action — from individuals’ choices and uses of vehicles, appliances, and housing, to businesses’ choices of new product design, capital investment and facilities location, and governments’ choices in regulatory policy, land use and taxation.

In order to maximize incentives to reduce emissions while avoiding “income” effects normally associated with taxes that would drag down the economy a carbon tax should be revenue-neutral. Revenue-neutrality, says the Carbon Tax Center, is a “politically savvy way to blunt the ‘No New Taxes’ demand that has held sway in American politics for generations.” There are two methods in which this may be enforced. The most promising way to tax in a revenue-neutral fashion would be, as the Carbon Tax Center states, for “each dollar of carbon tax revenue would trigger a dollar’s worth of reduction in existing taxes such as the federal payroll tax or state sales taxes. As carbon-tax revenues are phased in (with the tax rates rising gradually but steadily, to allow a smooth transition), existing taxes will be phased out and, in some cases, eliminated.” Reducing payroll taxes could also stimulate employment. This method is known as tax-shifting.

The other method, which Dr. Hansen supported at the recent Congressional Foreign Policy Committee Hearing on the Keystone XL Pipeline, would be one that would return revenues directly through regular equal “dividends” to all U.S. residents. In effect, every resident would receive equal, identical slices of the total carbon revenue “pie.” The amount of every individual’s carbon tax would be proportionate to his or her fossil fuel use, creating an incentive to reduce. But revenue return “dividends” would be equal and independent of individuals’ energy use, preserving the conservation incentive.

Despite the extensive work we must undertake this theory can be practically applied. In Canada a carbon tax isn’t just an idea; it is a reality. Five years ago, the Canadian province of British Columbia joined a small group of local and national governments (still fewer than 20 overall) that have created a carbon tax—setting a price on carbon in an effort to reduce emissions. Today, the tax brings in $1 billion a year in revenue that is returned to British Columbia taxpayers. This is returned through a system that is similar to the one Dr. Hansen describes.

A tax on carbon emissions isn’t the only way to “put a price on carbon” and thereby provide incentives to reduce use of high-carbon fuels; a carbon cap-and-trade system is an alternative approach. Recent evidence from the EU’s ETS suggests, however, that price volatility and gaming by market participants has largely undermined the effectiveness of this complex, opaque indirect cap-and-trade system for pricing carbon pollution.

If we are to effectively regulate companies, from an economic efficiency standpoint, then the EPA and other agencies must assist entities internalize the externalized “social cost.” The method of internalization, I suggest, is this carbon tax. To battle the climate patterns and threatening ecosystems that result we need to slow the amount of carbon we are emitting; we should not increase the extraction and combustion of more fossil fuels to create jobs or boost the economy in the short-term. If the cost of carbon is not soon internalized by all entities, then there will be uncontrollable events for my generation and the future generations of our families.

Upholding the Rights of Whales and Dolphins in the 21st Century: Reflecting on Fundamental Conclusions 2013-2014

"Hurray!"-This whale

Whales around the world are a little safer today. Why? Today, March 31, 2014, Australia has won an international lawsuit against Japan’s Southern Ocean ‘scientific’ whaling program and the International Court of Justice has ordered Tokyo to cease the killing immediately. Australia—who launched this case against Japan back in 2010—were quick to challenge the Japanese slaughter of whales as an important, long standing feature of Japanese culture. Australia pointed out that Southern Ocean whaling began in the 1930s, and that it takes place some 6000 km from the Japanese coastline…doesn't sound like a definitive feature of Japanese culture to me. Even though it may not have a cultural impact, Japan whaling efforts affect the ocean ecosystem where around a thousand minke whales are hunted down annually in the icy waters of the Southern Ocean. Australia and environmental groups say the hunt serves no scientific purpose and is just a way for Japan to get around the moratorium on commercial whaling imposed by the International Whaling Commission in 1986.

Courtesy of abc.net.au

 Slovakian judge Peter Tomka stated today that Japan had not justified the large number of minke whales it takes under its "scientific" program, while failing to meet much smaller targets for fin and humpback whales. Japan argued that the World Court, which is the United Nations’ court for disputes between countries, did not have the authority to deem what is and is not scientific. Despite Japan’s best efforts, Tomka believed that there was no evidence that Japan has examined whether it would be feasible to maintain a smaller lethal take and increase non-lethal sampling as a means to achieve research objectives. This was the first time in history any country has used an international court to try to stop whaling and it was met with success. Japan has said it will abide by the ruling of the court.

Of course, there have been other victories for cetacean species in the last 12 months. Back in July 2013, India's Ministry of Environment and Forests advised state governments to ban commercial entertainment that involves the capture and confinement of cetacean species such as orcas and bottlenose dolphins. That marked India as the forth country in the world to ban the capture and import of cetacean species for the purposes of commercial entertainment. Costa Rica, Hungary, Chile, and now India all recognize these species as highly intelligent and sensitive, and that these animals should be seen as ‘non-human persons’, whose rights to life and liberty must be respected.  These rights are not just being uphold abroad, but here too in America where state Assemblyman Richard Bloom of Santa Monica proposed a bill that would ban the captivity of orcas for entertainment at SeaWorld. This proposed bill comes shortly after the release of the massively successful CNN documentary “Blackfish.”

There are, however, those who still oppose the life and liberty of cetacean species. Icelandic whalers have killed more than 700 whales, including hundreds of endangered fin whales, since the country allowed whale hunts to resume in 2003, exploiting controversial loopholes to evade the whaling ban—just like Japan has with their ‘scientific’ whaling scheme. Iceland killed 35 minke whales and 134 fin whales—massive animals second only to blue whales in size—during the 2013 whaling season alone. Though the International World Court’s moratorium on commercial whaling prohibits the commercial trading of whale products, Iceland has exported to Latvia, Norway, and Japan to keep its dying whaling industry afloat. SeaWorld, also facing economic hardships, attempted to set the record “straight” by fighting back allegations with a list of responses from the supporters of SeaWorld, “An Open Letter from SeaWorld’s Animal Advocates”.  Unfortunately, in late December 2013, Sea Shepherd deflated the rhetoric of the SeaWorld supporters.

Greenpeace so eloquently summed up todays proceedings here: “While today's ruling did not outlaw the killing of whales for scientific research per se, it categorically stated that Japan's whaling programme in the Southern Ocean was not for scientific purposes, and the amount of whales being killed was not justifiable in the name of science.” This ruling is important because it is binding under international law and will be upheld by Japan, tightening the noose around a dying industry. Lethal whaling programs are not necessary, nor are the captures and imprisonments of other cetacean species for commercial entertainment purposes. Cetacean species are more entertaining in their natural habitat then a confined space, stripped of liberty and joy. These industries are on their last legs; we must continue to support legislation that promotes sustainable ocean regeneration and just treatment of the animals therein so that whaling and commercial exploitation of all cetacean species for (minor) amusement/enjoyment will be a practice of the past.   

Courtesy of hdwallpaper.com

Opinion: Idaho's Ignorant Wild West Policies and the Extermination of Wolves

Editor's note: The USDA data on which this graphic was based covered the entire United States. Only five states have more than 200 wolves and experienced wolf predation on cattle. In these states, the percentages of wolf predation in 2010, compared with total losses from all causes, are as follows: Minnesota, 3.13%; Montana, 2.86%; Idaho, 1.96%; Wyoming, 1.76%; and Wisconsin, 0.97%. Photo courtesy of the Sierra Club.

Did you know that nation wide wolf predation on cattle is only .2% of all cattle deaths? Did you know, in a much more narrow search, in these states, the percentages of wolf predation in 2010, compared with total losses from all causes, are as follows: Montana, 2.86%; Wyoming, 1.76%; and Idaho, 1.96%? But despite Idaho’s minuscule wolf problem, a bill requesting $2 million of to federal taxpayer currency to kill up to 500 Idaho wolves is making its way to the House floor.

This isn't necessarily problematic for residents of Idaho or the lawmakers proposing the bill. Idaho’s wolf population was taken off the endangered species list in 2011, and the population is seen to be “thriving” at nearly 700 animals. As long as the species doesn't fall below 150 animals, when the species will once more be classified as endangered, Idaho won’t have to get federal regulators involved. For this reason lawmakers want to make it clear it is ‘not a wolf extermination bill.’

This bill speaks to Idaho’s ability to show the rest of the US it is autonomous; it is not responsible to anyone—or anything—outside of Idaho. Idaho legislature (and the interest groups who pack their pockets) ignores both science and policy like the Environmental Protection Agency of the 70s.  The trophic cascade, or the ecological food pyramid, needs these wolves to sustain a healthy environment for both wildlife and humans.  Before the wolves were reintroduced to the Greater Yellowstone ecosystem in 1995 there were various ecological issues that spurred from their eradication. Organisms that were lower on the trophic cascade populate the environment more rapidly than predators on the top. The wolf eradication resulted in unsustainable elk populations that depleted the vegetation in and around Yellowstone National Park (YNP). This affected all wildlife within the ecosystem, and negatively affects both tourism and economic operations on private lands. Tourists went to national parks to see beautiful, majestic wildlife and scenery, not the desolate desert it became. Also, elk populations—with little options for food in YNP—had to find their sources elsewhere. The movement of elk from the park to private lands led to widespread ungulate disease like brucellosis affecting cattle operations.

What this bill really speaks to is the power of unregulated, unfettered capitalistic intentions.  Corporate interests that sway state legislators undermine the democratic process to promote short-term economic interests, ignoring long-term regret and least-risk management. The battle for public lands focuses on promoting deliverables (economic resources that can be exploited). Elk populations are promoted in an unsustainable manner for outfitting operations by focusing disease treatment on buffalo (ignoring scientific studies), and drafting bills, which promote the “war on wolves” mentality.

While the world depends on ecological sustainability, this bill represents the political game that western constituents and politicians are playing with real, living and breathing beings. This bill reminds us who runs our public lands. Public lands of the west clearly belong to the stockmen and sportsmen. Until we develop stronger regulation and produce independent results from uninterested contractors this problem will remain a masturbatory guise for private interests to produce short-term economic gains with little thought about the overall health of the immediate casual nexus.

Costa Rica's Fight to Save the Environment from a Canadian Mining Corporation

The paradoxical complications of the role of foreign direct investment (FDI) in developing countries has long been of concern of champions of human rights, women’s rights, and the environment at large. When enticing foreign companies to invest in their country (often providing low taxes for FDI, low costs of labor, and lax resource regulation), developing countries look to increase GDP, jobs, and overall quality of life for their citizens. But as analysts note, the paradox of the plenty curses many of these natural resource abundant nations for a variety of reasons, ultimately producing less economic growth and development outcomes than believed. What happens when a country recognizes the pitfalls of FDI and wishes to protect its environment instead? The Canadian mining operation, Infinito Gold, has attacked the Costa Rican Government with a one billion dollar lawsuit for what seemed to be “lost profits”. This post will shed some light on the issue of open-pit mining in Costa Rica, the challenging legal battle with Infinito Gold, and where this Canadian company and Costa Rica now stand in this current legal battle—which hasn’t garnered much attention.

As prices for precious metals were at record high, Costa Rica shunned the mining industry back in 2010. Open-pit mining is a surface mining technique of extracting rocks or minerals from deposits that have a relatively thin layer of “invaluable” surface material also known as overburden. Mining advocates say that open-pit activities have become more eco-friendly as of late, and promoting such foreign investment would spur job creation. Biologists and environmentalists are skeptical of how eco-friendly deforestation can be, especially in a country that prides itself as a great friend of the environment. Back in 2010 these issues were at the front of Costa Rican debate: should they remain ecologically sustainable even at the expense of opportunity for development and economic prosperity? Costa Rica said, undoubtedly, yes. President Laura Chinchilla explained to press that Costa Rica decided it was to head toward a model of economic development that coexists with the environment, and distances itself from extractive industries.

A man hangs a banner reading "No to the Mining Industry" during a protest in San Jose on Oct. 27, 2008. Mayela Lopez AFP/Getty Images

According to opinion polls, over 85% of Costa Ricans opposed Infinito’s “Crucitas” open-pit mining project. November 9, 2010, Costa Rica’s Legislative Assembly unanimously banned open-pit mining. In 2011, Costa Rica’s Supreme Court re-affirmed a presidential decree banning open-pit metal mining in the country. Authorities in Costa Rica have noted that Infinito, in fact, owes Costa Rica some $10 million for damage already done to 300 hectares of tropical forest. The company has yet to come up with the money.

Instead of respecting the democratic and legal decision of Costa Rica regarding the rejection of this project, Infinito has conveyed an attempt to sue the country in the World Bank’s International Centre for the Settlement of Investment Disputes. Infinito Gold claimed that Costa Rica violated the Costa Rica-Canada Bilateral Investment Treaty when an Administrative Appeals Court revoked its mining concession in San Carlos, Alajuela, in 2010. Infinito originally obtain said concession from President Oscar Arias’ administration, in 2008. Later, however, the Prosecutor’s Office was ordered to open an investigation of the president for signing off on the project when environmental studies were still being processed.

An aerial photograph of the Crucitas gold mining site in San Carlos, Alajuela, in northern Costa Rica. The Canadian mining company Infinito Gold has been locked in a lengthy legal battle with the government of Costa Rica since an appeals court revoked the concession in November 2010. The Tico Times

After months of threatening the Costa Rican government with a one billion dollar lawsuit over the cancelled Las Crucitas gold mining concession, the Canadian company filed a Request for Arbitration with a World Bank court. Infinito Gold released a new statement this February in which the Canadian mining company backed away from the claim of $1 billon in lost profits, seeking to recoup at least $94 million in expenses incurred during the cancelled project’s development between 1993 and 2010, including interest and legal fees of course:

“The Company emphasizes that, contrary to some media reports, its objective in pursuing its legal remedies is to recoup the costs that have been spent, plus interest, in developing the project over the past 20 years, as opposed to the profits it reasonably expected to earn had it been allowed to fully develop the project.”

Hundreds of thousands of activists around the world defended Costa Rica in petitions and letters to the CEO of Infinito Gold. MiningWatch Canada spokesperson Jamie Kneen said, “This case is another example of the damage corporations can do using investment protections in free trade and investment agreements to try and override the will of small, eco-conscious nations like Costa Rica. Yet the Canadian government continues to promote the entrenchment of corporate ‘rights’ in new trade and investment treaties like the new agreements with Honduras, China, the EU, and the countries in the Trans-Pacific Partnership.”

This story is still developing, and it will be important to watch how each stakeholder will act in the upcoming months. It is an important glimpse into the problematic situation developing countries find themselves in when luring capitalists and corporations to their lands. As countries become more conscious of ecological stability, practices to extract natural resources will decline. Yet, developing nations still require technical assistance in order to grow their economies and provide for their citizens. The balance of jobs and economic prosperity against sustainable land use practices will be up for debate for the foreseeable future. One can only hope that aggressive neoliberal trade agreements won't interfere with the sovereignty of states, or their ability to be financially stable while providing a equitable and just work and living environment for all inhabitants, human and non-human.