A US Climate Platform: Anchoring Climate Policy in Reality (3/3)

By Michael Hoexter

Part I | Part II | Part III

4) Question and Answer

Q: I notice that the platform cites amounts of money for some of the government actions proposed and for others it is left open. Why not either leave amounts open or develop a full budget?

A: There are a few reasons for this inconsistency:

1) This document and outline is a starting place for a larger scale development of this approach. Some numbers are there to suggest magnitudes in areas where I am more confident that they will mean something.
2) I have more knowledge in some areas than in others and I am inviting others to discuss either general approaches or the details of this approach. This platform should become a team effort.
3) Some of these amounts, even if they are “right” as a starting place, will need to be adjusted over time as the policy is implemented to maximize the effectiveness of the policy.
4) I, the initiator/initial author, have been only able to devote part of my time to this effort, as I need to earn a living

Q: I see that you emphasize spending and tax credits but not the levying of new taxes in your actual proposals. But in the beginning “Rationale” you mentioned higher levels of taxation, particularly on the wealthy. How are you going to “pay for” all of this spending or at least counteract its inflationary pull?

A: There are multiple reasons for this, some of them perhaps more justifiable than others:

1) The federal government doesn’t need tax money from anybody, rich or poor, to start an investment program. The federal government always creates money as it pays its suppliers and doesn’t “need” to shift it from another entity’s account to pay them. There are legal accounting requirements for the US federal government but these in places contradict the economic and operational demands of the economy overall and the current fiat currency issuing system of the US government. The tension between the legal accounting requirements and operational and economic reality creates a somewhat confusing politics that favors the use of the fiat capacity of government by powerful, “insider” economic interest groups and a suppression of the use of this fiat power for the common good. With an open public understanding of the government’s fiat capacity and its political-economic role, the chances for favoritism in the use of government’s financial power would be greatly diminished.
2) The federal government does need to collect taxes in general (not one-for-one per dollar spent), for the currency to have value and have a stable value as well. With an increase in government injection of funds into the economy of 3 to 4 trillion dollars or around 8 trillion dollars total, the amount of tax dollars collected will have to go up, though not in lock-step with or before government investment.
3) In this climate transition, many rich people will need to invest in climate solutions in order to hold onto a good portion of their money, so I emphasized those purposes that would entitle people to tax credits.
4) I assume but do not state what the higher tax rates will be that will drive this investment but I believe in starting with positive incentives (gaining a tax credit) rather than negative incentives (avoiding a new or higher tax). I also believe in taxing what society in general “doesn’t want”, which is also a mainstream economic principle. It may be that a combination of moral commitment plus positive incentives will suffice to start the necessary investment boom in some sectors while for other sectors it may require higher tax rates on high earners and large wealth-holders to push private investment in real-economy climate investments.
5) Other than my primary concern to create the necessary goods and services to cut emissions and reduce concentrations of warming gases via investment of labor and capital, my subsidiary concern is to maintain the value of the currency, as compared to a basket of consumer and investment goods. If this stability can be achieved by targeted taxation on specific transactions and goods, then a “blunt instrument” approach will have been avoided.
6) While it is considered to be “populist” or Left to take money away from rich people, I do not believe that the politics and economics of ressentiment will work as the necessary creative force we require to create a net zero emitting society. Certainly the federal government doesn’t need rich people’s money to spend on public works and increasing the incomes of ordinary people. Ideal is to have rich people be less rich and that they care about the society and the product of their work more than increasing their own substantial holdings. Taking excess money away from them is subsidiary to the outcome of having a society that works better on the whole.

Q: What you are describing is a wartime economy in peacetime. Wouldn’t there be rationing and price controls in such an economy as the government distinguishes between critical uses and luxury uses of resources?

A: I am aware that many, many people do not take the climate crisis very seriously, and prefer to live in various states of climate denial, including people who agree that climate change is a reality yet do nothing about it. The American people, in particular, are very poorly informed about climate change, its causes and consequences. They are not ready for trade-offs and some, even minor, sacrifices for an issue to which they give little attention.

This climate platform is a “platform” a means to show the positive attributes of this route for addressing climate change rapidly and effectively. It is meant to gather support for these positive attributes and benefits. What I am outlining here is a “voluntary path” to net zero carbon emissions and climate stability. We can enter this path without too much in the way of sacrifice but it should be noted that mandatory measures might need to come into effect. But those measures would only work if people come to generally agree that a net-zero carbon emissions society is highly desirable and worth some sacrifice. Also they would need to feel that the process of achieving that net-zero-emissions society is also a desirable process and worth minor or moderate sacrifices, just so long as these are equally shared and their personal welfare is also a key concern of government.

Q: The US Climate Platform has 26 planks while the advocates of carbon taxes or cap and trade seem to be offering a simple solution, a “silver bullet”. Why such complexity?

A: I would personally prefer a simpler solution (though it is possible to summarize this platform in about 5 points that are very general and can be gleaned from the “Rationale” portion) but reality is a stubborn thing and doesn’t always conform to our aesthetic preferences. I prefer leveling with people and then, if through a process of interaction and discovery, taking out the inessentials to get to a more quickly absorbed vision for broader consumption. Addressing the climate catastrophe is going to involve a lot of thinking by a lot of people and some of that thinking is not going to be fun, pleasurable or aesthetically pleasing.

There are many, many reasons why this approach is vastly superior to and more effective than a “carbon-tax only” or, even more so, a cap-and-trade system, and there is not enough time here to go into all of them.

Fundamentally, the approaches to climate policy that are centered entirely or largely on a carbon price avoid the use of people’s individual and collective capacity to plan. The carbon-pricing only approaches avoid the fact that we can implement via the institutions of government at this very moment in history a transition away from fossil fuels to carbon-free energy and wiser use of energy overall. A carbon price reliant policy framework “backs into” the energy future by people trying to avoid the carbon price in an unorganized way in an idealized (and largely non-existent) market for comprehensive energy solutions. The carbon pricing frameworks envision an incremental change over time from high carbon to lower and lower carbon solutions.

There are many reasons why the carbon-pricing-centered approach is out of touch with reality, though it has its political partisans, who don’t seem to have thought this through.

• We do not have the time to approach the net-zero emitting society that we require very soon via incremental investments by market actors.
• Market actors do not have the resources and risk-tolerance to make large-scale long-term investments in energy related infrastructure nor do many of them have the interest to make these investments if given a choice.
• Those who “hear” the carbon pricing signal the loudest will be most inhibited by finances to make investments, i.e. poorer, while individually they contribute not very much to our overall carbon footprint.
• The incremental lower-carbon-emitting but not zero carbon-emitting investments induced by carbon pricing alone would additionally create classes of stakeholders in that intermediate-emittin status quo that would block a full transition to net-zero emissions.

We, luckily, have most of the technologies to reach net zero emissions, and it is then a matter of implementing them very rapidly and on the appropriate scales. The spending, leadership, and planning power of governments is entirely misunderstood by advocates of carbon pricing-only frameworks, as well as the current state of net-zero carbon emitting and energy efficient technologies. These functions of government are also part of the “normal” economic and energy status quo and are also in that context misunderstood by carbon-pricing economic orthodoxy.

As you note, of course, by reading the climate platform, this does not mean that carbon taxes aren’t useful and this platform includes as one important piece a carbon tax and tariff system. But carbon taxes and, even more so, the morass of cap and trade systems are by no means the single “silver bullet” that their advocates claim them to be.

Q: Isn’t this platform politically unrealistic given the commitment of the Republicans to “limited government” and the dominance of climate denial within that party?

A: There are commentators who believe that one must trim one’s policy proposals and thinking to the political status quo in Washington, the consensus of what some might all “Very Serious People” or VSPs. I am in agreement with these commentators if it means that acknowledging that denialist or even delusional views exist and that there is a political “market” within the public and powerful political patrons for politicians who espouse these views.

However there is within the Democratic Party, including very notably the current President through most of his Presidency, a misguided strategic orientation that suggests not only must one try to reach compromises with the Republicans and their worldview but one must do so by adopting their onetime or current ideas, with the hope that somehow common ground will be found between Democrats as representatives of one-time Republican ideas and actual Republican officeholders. I find this approach to politics self-defeating on a number of levels and the Republican rout of the Democrats in 2010 on federal and local levels bears witness to the foolhardiness of this supposedly clever political strategy.

With climate the idea that one must submit policy ideas that should be trimmed to Republican ideas about the economy and governance is particularly problematic. Most of the Republican Party is committed to the idea that the problem, human-caused climate change with massive existential risks for humanity, doesn’t exist. Without recognizing the reality of the problem, it would be impossible to address it, given that effective climate action is a very demanding and technically specific set of actions that are required by the public and by government.

So with climate as well as with a number of other social issues, it makes almost no sense to start with the premise that Republican views and preferences have meaningful weight. If there is one aspect that the GOP have right, however, is that what they most fear, a strong government acting for the benefit of the majority of the population and in coordination with other governments, is the only way forward. Efforts to reassure Republican or denialist paranoia about government’s role and “size” have led to inadequate and dangerously compromised climate policy proposals.

In terms of a political strategy, I believe that telling the truth has power and I am relying on the telling of what I believe to be true as a starting place for a more effective climate politics. I don’t think this has been tried, as much as some pundits like to claim that politically “naive” and ambitious ideas about climate economics and climate policy abound. I don’t think they recognize or appreciate the gap, into which I am placing this climate platform.

Q: Why mix social demands, particularly ones that appeal mostly to the Left, into a climate platform? Doesn’t this dilute the climate message and shut out alliances with those who do not identify with the Left?

A: I am with Naomi Klein, as well as Pope Francis, in linking social issues with climate action. I think that effectively addressing climate change is a “whole society” approach to the problem, changing almost “everything” to varying degrees. While there are technical issues and challenges associated with climate action, climate action is also about the soul of society and human social relations. The required technical changes will occur through people’s actions and changes in social conventions, so there is no way to just “drop in” a technological fix into our society and effectively address climate change.

Much of climate action will involve the mobilization of people and materiel to act upon the physical infrastructure of society, creating employment but also shifting social relationships. People should have a personal investment in those changes and their ultimate success, even if they don’t particularly have a “feel” for the technology involved. Maintaining and increasing social welfare is also critically important with such major changes in our ways of life.

I believe though I differ somewhat from Klein and Francis in that I don’t think that climate action is exactly an omnibus for all desirable social changes. As I note in the “Rationale” above, some of the features of capitalism that can have socially detrimental effects must be maintained until some new and better system of producing our livelihoods is invented. No such system exists currently, despite the laudable intentions and valuable criticisms of the status quo that Klein, Francis, and other social critics offer.

Finally, the American people, while often eschewing the unfortunate “liberal” label for being progressive or Left in the United States, actually support many social viewpoints that are sometimes disparagingly or slightingly lumped in with “liberal” political views.

Q: What is the political strategy behind this platform?

A: I am putting this out there as a “stake in the ground” regarding a climate policy that is commensurate with the geophysical challenge facing us. In my view, people spend much of their time pointing out the terrible effects of climate or of fossil fuel extraction and but very little on how to put together a solution in short order. The focus is on the problem or, in my view, a few idealized or fragmentary solutions.

Many, many people believe, unfortunately, that climate policy or climate politics is just saying “NO” to or “resisting” the fossil fuel industries. They then make vague insinuations or express fond hopes about “clean energy” somehow replacing fossil fuels as a natural, maybe “market”, phenomenon. In my observation, this type of approach is simply a recipe for either maintaining the status quo or creating a “market segment” for the virtuous and “green” without decisively moving society off of its fossil fuel dependence.

It is my hope that showing what an actual consequential climate policy will look like will shift the public discussion to exploring how society will move off fossil fuels with the necessary rapidity. Once discussed, political groupings would take up these or similar demands, candidates may absorb some of this content and officeholders may then act in some way informed by this approach to the climate catastrophe.

This document is fundamentally an appeal to logic and reason, combined with moral commitment and empathy with others, in particular empathy with younger people and coming generations. While some may find this last statement naive, I believe that on the contrary to discuss climate without these human motivations and capacities in mind is an expression of hopeless naivete and a self-defeating attitude in itself.

With the 26 planks of this platform I am looking forward to political pressure groups and political parties adopting some or all of them, so that we may move to rescue what we can of a habitable world for humanity. The planks in this platform would seem to fit with the strategy of the relatively new group, The Climate Mobilization, as these planks would in part, fill in what that group means by “mobilizing” people and materiel to fight climate catastrophe. I am also an economic and strategy advisor to that group. There may be others as well, who see the benefit of articulating what needs to happen next, in order to address the threat of climate catastrophe. What I hope for first is that a public discussion of practical and realistic solutions is started.