Articles by Gar Lipow

Carbon offsetting is not the best way for the global north to subsidize the global south

Okay, my last post summarized Tom Athanasiou and Paul Baers' arguments in favor of drastic cuts in emissions. They place responsibility on the rich and to some extent the middle class rather than the poor. As you might expect, I agree with both these points. I disagree with their arguments that carbon trading and even offsets are the best way for the global north to subsidize the global south.

Tom and Paul's argument: the rich countries are responsible for cuts exceeding 100 percent. The only way to meet that obligation is by paying for cuts in the poor nations; Tom & Paul suggest buying offsets from them.

Why use offsets? Tom and Paul argue that the size of the cuts makes it essential to use the absolutely cheapest methods, and emissions trading tends to the produce the cheapest cuts.

I have argued in the past that emissions trading may be less expensive statically, but not dynamically. Compare rule-based regulation with stringency increases against a cap-and-trade with a cap that tightens.

A brief summary of Tom & Paul’s approach to international climate justice

In Tom Athanasiou's recent post, "The greening of the global south," he describes an article in U.K. magazine The Prospect as "honest," "well-informed," and "criticizing the alternatives to trading."

I actually think these objections are pretty easy to answer, but in order to do so, I have to present the objections first.

The article begins by adopting some of points Tom and Paul present in their book The Right to Development in a Climate Constrained World:

Geek humor

Volker Weber provides a strong counterargument to my posts favoring public investment (very funny, if you are a certain kind of geek):

The major differences between carbon pricing plans are political

Putting a price on carbon is probably an unavoidable part of phasing out fossil fuels to fight global warming and air pollution. For years, Peter Barnes has advocated a brilliant means of mitigating many of the harmful economic side effects: take the revenue from carbon taxes or auctions and rebate it back to the people, dividing it equally among each citizen.

Barnes advocates doing this via an auctioned permit system. However,the same thing could be done with a carbon tax. Instead of auctioning permits, simply tax those same embedded emissions and rebate that revenue to consumers. Raise the tax periodically to lower emissions.

Inevitably, with either a tax or auctioned permits, the price charged for carbon will be passed down the supply chain to consumers. By rebating the revenue back to consumers, you minimize the impact of those price increases. They have to pay more, but they have more money to pay with. You get the price signals to affect behavior, without lowering consumer net income.