Month: September 2018

Trump’s Policies Will Displace The Dollar

The benefits that the US reaps from having the world’s main international currency are diminishing with the rise of the euro and renminbi. And now President Donald Trump’s misguided trade wars and anti-Iran sanctions will accelerate the move away from the dollar.

Back in 1965, Valéry Giscard d’Estaing, then France’s Minister of Finance, famously called the benefits that the United States reaped from the dollar’s role as the world’s main reserve currency an “exorbitant privilege.” The benefits are diminishing with the rise of the euro and China’s renminbi as competing reserve currencies. And now US President Donald Trump’s misguided trade wars and anti-Iran sanctions will accelerate the move away from the dollar.

The dollar leads all other currencies in supplying the functions of money for international transactions. It is the most important unit of account (or unit of invoicing) for international trade. It is the main medium of exchange for settling international transactions. It is the principal store of value for the world’s central banks. The Federal Reserve acts as the world’s lender of last resort, as in the 2008 financial panic, though we should recognize too that the Fed’s blunders helped to provoke the 2008 crisis. And the dollar is the key funding currency, being the major denomination for overseas borrowing by businesses and governments.

In each of these areas, the dollar punches far above America’s weight in the world economy. The US currently produces around 22% of world output measured at market prices, and around 15% in purchasing-power-parity terms. Yet the dollar accounts for half or more of cross-border invoicing, reserves, settlements, liquidity, and funding. The euro is the dollar’s main competitor, with the renminbi coming in a distant third.

The US gains three important economic benefits from the dollar’s key currency role. The first is the ability to borrow abroad in dollars. When a government borrows in a foreign currency, it can go bankrupt; that is not the case when it borrows in its own currency. More generally, the dollar’s international role enables the US Treasury to borrow with greater liquidity and lower interest rates than it otherwise could.

A second advantage lies in the business of banking: The US, and more precisely Wall Street, reaps significant income from selling banking services to the rest of the world. A third advantage lies in regulatory control: The US either directly manages or co-manages the world’s most important settlements systems, giving it an important way to monitor and limit the flow of funds related to terrorism, narco-trafficking, illegal weapons sales, tax evasion, and other illicit activities.

Yet these benefits depend on the US providing high-quality monetary services to the world. The dollar is widely used because it has been the most convenient, lowest-cost, and safest unit of account, medium of exchange, and store of value. But it is not irreplaceable. America’s monetary stewardship has stumbled badly over the years, and Trump’s misrule could hasten the end of the dollar’s predominance.

Already back in the late 1960s, America’s fiscal and monetary mismanagement led to the breakdown of the dollar-based Bretton Woods pegged-exchange rate system in August 1971, when President Richard Nixon’s administration unilaterally renounced the right of foreign central banks to redeem their dollars in gold. The breakdown of the dollar-based system was followed by a decade of high inflation in the US and Europe, and then an abrupt and costly disinflation in the US in the early 1980s. The dollar turmoil was a key factor motivating Europe to embark on the path toward monetary unification in 1993, culminating in the launch of the euro in 1999.

Likewise, America’s mishandling of the Asian financial crisis in 1997 helped to convince China to begin internationalizing the renminbi. The global financial crisis in 2008, which began on Wall Street and was quickly transmitted throughout the world as interbank liquidity dried up, again nudged the world away from the dollar and toward competing currencies.

Now Trump’s misbegotten trade wars and sanctions policies will almost surely reinforce the trend. Just as Brexit is undermining the City of London, Trump’s “America First” trade and financial policies will weaken the dollar’s role and that of New York’s role as the global financial hub.

The most consequential and ill-conceived of Trump’s international economic policies are the growing trade war with China and the reimposition of sanctions vis-à-vis Iran. The trade war is a ham-fisted and nearly incoherent attempt by the Trump administration to stall China’s economic ascent by trying to stifle the country’s exports and access to Western technology. But while US tariffs and non-tariff trade barriers may dent China’s growth in the short term, they will not decisively change its long-term upward trajectory. More likely, they will bolster China’s determination to escape from its continued partial dependency on US finances and trade, and lead the Chinese authorities to double down on a military build-up, heavy investments in cutting-edge technologies, and the creation of a renminbi-based global payments system as an alternative to the dollar system.

Trump’s withdrawal from the 2015 Iran nuclear deal and the re-imposition of sanctions against the Islamic Republic could prove just as consequential in undermining the dollar’s international role. Sanctioning Iran runs directly counter to global policies toward the country. The UN Security Council voted unanimously to support the nuclear deal and restore economic relations with Iran. Other countries, led by China and the EU, will now actively pursue ways to circumvent the US sanctions, notably by working around the dollar payments system.

For example, Germany’s foreign minister, Heiko Maas, recently declared Germany’s interest in establishing a European payments system independent of the US. It is “indispensable that we strengthen European autonomy by creating payment channels that are independent of the United States, a European Monetary Fund, and an independent SWIFT system,” according to Maas. (SWIFT is the organization that manages the global messaging system for interbank transfers.)

So far, US business leaders have sided with Trump, who has showered them with corporate tax cuts and deregulation. Despite soaring budget deficits, the dollar remains strong in the short term, as the tax cuts have fueled US consumption and rising interest rates, which in turn pull in capital from abroad. Yet in a matter of several years, Trump’s profligate fiscal policies and reckless trade and sanctions policies will undermine America’s economy and the role of the dollar in global finance. How long will it be before the world’s businesses and governments are running to Shanghai rather than Wall Street to float their renminbi bonds?

The Climate Crisis And How We Fix Our World For The Future

There is ample evidence that climate change is happening. 97% of scientists believe not only that climate change is happening, but that humans are causing climate change. The National Climate Assessment is a report compiled by over 300 experts guided by the Federal Advisory Committee. Below are some of the key facts that that report uses to demonstrate climate change’s existence.

 

 

Global Temperatures are Rising

One of the key aspects of climate change is global warming. While this might not feel like the case during especially cold days of winter, it is unequivocally true. The last three years: 2017, 2016, and 2015 have been the three hottest years on record.  The organization Climate Central also points out that “The five warmest years in the global record have all come in the 2010s. The 10 warmest years on record have all come since 1998, [and] The 20 warmest years on record have all come since 1995.”

Looking beyond the last 20 years, the National Climate Assessment shows that in each successive decade since 1930, the average global temperature has increased. The 1980s were the warmest decade on record, surpassed by the 1990s, surpassed by the 2000s.

 

Temperature Rise

As a result of this warming, and to further demonstrate its existence, the National Climate Assessment points out that the following is also true:

  • Snow and ice cover has decreased in most areas with the most drastic reductions at the poles. In fact, minimum arctic sea ice (usually during September) has decreased by more than 40%. NCA states that “This decline is unprecedented in the historical record, and the reduction of ice volume and thickness is even greater.”
  • Sea level is increasing because as water warms it expands and melting ice and icecaps adds water to the oceans.
  • Atmospheric water vapor is increasing because warmer air can hold more water.

Extreme heatwaves and heavy precipitation events (storms, hurricanes, etc.) have become more frequent.

Increases in Greenhouse Gasses Are Driving This Increase in Temperature

The cause of this warming is also unequivocal. As the concentration of C02 increases in the atmosphere, the global temperature increases.

 

Temp and CO2

 

Note: The NCA states that “Red bars show temperatures above the long-term average, and blue bars indicate temperatures below the long-term average. The black line shows atmospheric carbon dioxide (CO2) concentration in parts per million (ppm). While there is a clear long-term global warming trend, some years do not show a temperature increase relative to the previous year, and some years show greater changes than others. These year-to-year fluctuations in temperature are due to natural processes, such as the effects of El Niños, La Niñas, and volcanic eruptions. (Figure source: updated from Karl et al. 2009).”

While it is true that the climate has changed in the past due to natural factors, natural factors alone cannot explain the speed of temperature increase and global changes that we are experiencing now. In fact, research indicated that if we only looked at natural factors, the earth should be entering a global cooling stage. However, there is ample evidence that the opposite is true.

NCA explains that, “Since the beginning of the Industrial Revolution, humans have been increasingly affecting global climate, to the point where we are now the primary cause of recent and projected future change. The majority of the warming at the global scale over the past 50 years can only be explained by the effects of human influences, especially the emissions from burning fossil fuels (coal, oil, and natural gas) and from deforestation.”

 

Renewable Energy Around the World

 

 

Achieving 100% renewable energy is possible and plausible for the United States of America.

Many other developed nations have almost completely incorporated renewable energy into their economies and have been able to power their entire countries for substantial amounts of time solely on these methods. Others are moving in that direction and achieving small steps – a day, a month, an industry, solely relying on renewable energy. 

Here are some renewable energy leaders leaders around the world:

Costa Rica

Costa Rica has been a world leader in renewable energy for years. In 2015, Costa Rica ran on 100% renewable energy for 285 days, and on 100% renewable energy for 250 days in 2016. According to The Costa Rica News, in 2017, “Costa Rica achieved the admirable 300-day in a row mark in which its electric system operated with exclusively renewable sources, mainly [hydroelectric], besides the production of renewable energy covered 99.62% of the electricity needs of the country. A mark that also exceeds the records of 2015 and 2016.” Costa Rica does this through relying heavily on hydroelectric power, wind energy, geothermal energy, and small amounts of solar energy and biomass. This commitment to renewable energy has, according to the Costa Rica News “turned Costa Rica into the largest producer of clean energy from all of Central America and the Caribbean.”

Iceland

Almost 100% of all energy consumed on Iceland is renewable energy. The UN describes that in addition, “9 out of every 10 houses are heated directly with geothermal energy.” Iceland meets it energy needs largely through hydroelectric and geothermal sources. The UN acknowledges that the only exception to Iceland’s pervasive use of renewable energy is its reliance on fossil fuels for transport. The UN describes that Iceland’s move from fossil fuels to renewable energy was not inspired by climate change, instead, “The drive behind this transition was simple—Iceland could not sustain oil price fluctuations occurring due to a number of crises affecting world energy markets. …[and] for its isolated location on the edge of the Arctic Circle.” To rectify this issue, Iceland hired local businesses and entrepreneurs to shift energy reliance from foreign providers to internal sources. The Icelandic government also creates policies to encourage this shift: “To further incentivize geothermal energy utilization, the Government of Iceland established a geothermal drilling mitigation fund in the late 1960s. The fund loaned money for geothermal research and test drilling, while providing cost recovery for failed projects. The established legal framework also made it attractive for households to connect to the new geothermal district-heating network rather than to continue using fossil fuels.” The UN describes that these projects also diversified the economy, created jobs, and established a nationwide power grid.

Norway

“In Norway, 98 percent of the electricity production come from renewable energy sources,” according to the Norwegian government. The vast majority of Norway’s renewable energy comes from hydropower, an industry that has been growing in Norway since the 1800s. However, wind and thermal energy also contribute. Unlike many other countries, the Norwegian government explains that 90 % Norwegian energy production is owned by the state, counties, and municipalities “to secure a role for the Norwegian state in the ongoing electrification of the country, and ensure that the hydropower resources would benefit the nation as a whole.”

Portugal

In March of 2018, Portugal produced 103.6% of the energy required to meet the country’s electrical demand. According to NPR, “Fifty-five percent of that energy was produced through hydro power, while 42 percent came from wind.” Based on this success, Portugal expects that by the year 2040 that “the production of renewable electricity will be able to guarantee, in a cost-effective way, the total annual electricity consumption of Mainland Portugal.”

Germany

In January of 2018, Germany briefly covered 100% of its energy demand through renewable energy. In addition, according to Clean Energy Wire, last year “In the whole of last year, the world’s fourth largest economy produced a record 36.1 percent of its total power needs with renewable sources.” Due to the growing presence of renewable energy in Germany, there are now days when Germany generates half of its power from the sun.

While powering a country with 90% to 100% renewable energy might seem a daunting task for larger economies, many other foreign governments have invested in making certain aspects of their economy run entirely on renewable energy, or have focused on specific areas of the country, setting reasonable (and achievable) goals that will serve as test cases for later expansion of renewable energy. Some of these countries include:

China

In July of 2017 the Chinese announced that Qinghai Province—a territory the size of Texas—had gone a week relying on 100% renewable energy including solar, wind, and hydropower. During that week, Business Insider reports that “the Qinghai province generated 1.1 billion kilowatt hours of energy for over 5.6 million residents. That’s equal to burning 535,000 tons of coal.” This week period was a test by the Chinese government to test the viability of relying on renewables long-term. Ultimately, “China hopes to produce 20% of its electricity from clean sources by 2030.”

About the same time the Chinese released aerial photos of their newest giant solar farm—which seen from above depicts a cheerful black-and-white panda. Business Insider reports that, “it will be able to produce 3.2 billion kilowatt-hours of solar energy in 25 years… reducing carbon emissions by 2.74 million tons.”

England

On April 21st2017, Great Britain managed to meet its power demands without burning a lump of coal for the first time since the launch of the Industrial Revolution. This is one small step towards a transition away from fossil fuels to meet Great Britain’s climate change commitments. The Guardian reports that, Hannah Martin, the head of energy at Greenpeace UK, described this milestone as part of a much larger movement: “The first day without coal in Britain since the Industrial Revolution marks a watershed in the energy transition. A decade ago, a day without coal would have been unimaginable, and in 10 years’ time our energy system will have radically transformed again.”

Holland

In 2015 Holland set a goal to power all Dutch electric trains with wind energy by 2018. By January of 2017, that goal had been met. According to The Guardian, Holland met their goal a year ahead of schedule due to, “an increase in the number of wind farms across the country and off the coast of the Netherlands.”

Chile

Solar production has grown six-fold since 2014 in Chile. In fact, the New York Times reported that “Chilean officials have an even more ambitious projection, saying the country is on track to rely on clean sources for 90 percent of its electricity needs by 2050, up from the current 45 percent.” The initial movement to renewable energy sources was largely due to the high cost and uncertainty of energy supply when that energy was provided by outside sources. In addition, due to severe weather events that have made hydropower plants less reliable in Chile, the government has turned to more varied sources including wind, solar, and geothermal energy sources.

India

The largest coal mining company in the world (which produces 82% of India’s coal), announced the closure of dozens of coal mines and the cancellation of plans for dozens of new coal-fired generation stations because the cost of solar power was significantly undercutting fossil fuel. The Independent describes that “India’s solar sector has received heavy international investment, and the plummeting price of solar electricity has increased pressure on fossil fuel companies in the country.” The Independent also reports that “The government has announced it will not build any more coal plants after 2022 and predicts renewables will generate 57 per cent of its power by 2027.”

The United States

Governmental steps taken to reduce reliance on fossil fuels and to move towards a clean and green future are not solely happening outside of the United States. Fortune reports that “Eighteen percent of all electricity in the United States was produced by renewable sources in 2017, including solar, wind, and hydroelectric dams. That’s up from 15% in 2016.” Since 2008, renewable share of energy consumption has doubled. This is largely due to market forces that are responding to the dropping price of solar and wind energy. Fortune also points out that “the solar and wind industries are creating jobs faster than the rest of the economy.”

Many cities and states are, in fact, far outpacing the rest of the United States and have taken even greater steps towards 100% renewable energy. Below are two examples:

Pittsburgh, Pennsylvania

In June of 2017, President Trump announced that he would pull the United States out of the Paris Climate Agreement citing that he was elected by the citizens of Pittsburgh, not Paris. In response, the Mayor of Pittsburgh, Bill Peduto responded in a press release that “Pittsburgh will not only heed the guidelines of the Paris Agreement — we will work to move towards 100 percent clean and renewable energy for our future, our economy, and our people.”

Since June of last year, Mayor Peduto have taken steps to make that goal a reality. On April 5th of 2018, 180 U.S. Mayors including Mayor Peduto signed a letter resolving to make solar power a key element in their renewable energy plans. A press release quoted Mayor Peduto: “Solar power is a key component of advancing Pittsburgh’s clean energy transition. We have numerous assets that can provide as the launching point for solar generation in Pittsburgh and southwestern Pennsylvania, from parking lots to rooftops. Increasing the amount of locally generated solar power helps reduce carbon pollution, clean our air and provide a resilient, sustainable and cost-effective electricity.”

The next month, Pittsburg released its Climate Action Plan that establishes a goal for 100% renewable energy, and 100% fossil fuel free by 2030 as well as complete divestment from the fossil fuel industry.

Hawaii

Cities are not the only entities in the United States that are working towards 100% renewable energy. Hawaii is an example of an entire state that is working toward that goal.

In 2008 Hawaii and the Department of Energy signed a Memorandum of Understanding (MOU) “to collaborate on the reduction of Hawaii’s heavy dependence on imported fossil fuels.” The Hawaii Clean Energy Initiative was begun by that agreement.  In 2014, the initial goals were renewed and upgraded to include:

  • Achieving the nation’s first-ever 100 percent renewable portfolio standards (RPS) by the year 2045.
  • Reducing electricity consumption by 4,300 gigawatt-hours by 2030, enough electricity to power every home on Oahu, Maui, Molokai, Lanai and Hawaii Island for more than two years.
  • Reducing petroleum use in Hawaii’s transportation sector which accounts for two-thirds of the state’s overall energy usage.

In July of 2017, the Hawaii Public Utilities Commission approved an official plan put forward by Hawaiian Electric Companies that laid out exactly how Hawaii would achieve 100% renewable energy by 2040 (five years ahead of the goal.)

Hawaii serves as a reminder that states too can make significant headway towards the goal of 100% renewable energy. Progress is possible and is happening, if slowly.

If you would like to know more about how your state can move towards 100% renewables based on scientific studies that have analyzed the renewable energy potential in each area, visit The Solutions Project website.

A list of cities, counties, and states committed to, or that have achieved 100% renewable energy can also be found here.

 

The Myth Harming Renewable Energy Development

 

 

One of the largest myths about addressing climate change is that transitioning to renewable energy from fossil fuels (especially coal) will create a net loss of American jobs.

However, renewable energy is doing the opposite of putting Americans out of work. The New York Times reported that in 2016 coal was responsible for 160,119 jobs. In contrast solar employed more than double that amount (373,807 Americans).

The number of renewable jobs is also expected to grow significantly in the coming years. Last year, Business Insider reported that “solar and wind jobs are growing at a rate 12 times as fast as the rest of the US economy and… 46% of large firms have hired additional workers to address issues of sustainability over the past two years.”

In addition to renewables’ contribution to overall employment in the United States, there are a number of other economic benefits to American workers when we encourage growth in the renewable energy industry:

Geographic Distribution

While fossil fuel jobs tend to be concentrated in a few states (the vast majority of jobs in coal exist in West Virginia or Wyoming.), renewable energy jobs are spread out around the country. Program Director Liz Delaney at the Environmental Defense Fund points out that “These jobs [in the renewable energy sector] are widely geographically distributed, they’re high paying, they apply to both manufacturing and professional workers, and there are a lot of them.”

Supporting and encouraging the renewable energy industry will help hundreds of thousands of Americans find jobs all across the country. These are not simply installation jobs either, maintenance is a large part of the renewable energy industry.

Small Businesses

Environmental Defense Fund Program Director Delaney also mentions that “70% of the 2.2 million Americans who work in jobs related to energy efficiency are employed by companies with 10 employees or fewer.” These are small businesses, hiring American workers, in one of the fastest growing sectors of the economy. In addition, according to Delaney these jobs are also more difficult to outsource because “many sustainability jobs involve installation, maintenance, and construction.” The renewable energy sector is encouraging small business development in America.

Ultimately, encouraging the development of the renewable energy sector is the best path forward for America. Concerns about lost jobs in the fossil fuel and coal industries are legitimate and important to recognize, but those lost jobs should not hinder progress towards a renewable future. This is why training programs should be encouraged to support fossil fuel workers move to other sectors or be trained in budding renewable technology. The New York Times reports that “In Wyoming, home to the nation’s most productive coal region by far, the American subsidiary of a Chinese maker of wind turbines is putting together a training program for technicians in anticipation of a large power plant it expects to supply. And in West Virginia, a nonprofit outfit called Solar Holler… is working with another group, Coalfield Development, to train solar panel installers and seed an entire industry.” These successful test cases demonstrate that America can work towards renewable energy while also supporting and training workers to transition from fossil fuels to renewables in the same way that America is transitioning.

The claim that renewable energy is a job killer or a drain on our economy is a myth, perpetrated by the fossil-fuel business and the politicians who do their bidding. Don’t fall for it. Renewable energy is the path forward for American jobs and the future of our planet.

 

The Private Sector and Climate Change: Holding Corporations Accountable

 

 

There are a number of actions that our country could be taking to reduce our carbon footprint and lessen the progress of climate change, however, there are significant barriers in place that hinder these efforts. 

Many of these barriers stem from corporate action. Companies that benefit from the continued use of energy sources that contribute to climate change have a vested interest in hindering the progress of solutions that will move us away from the status quo. Below are a few examples of how corporations have done this: 

In the six years prior to 2017, rooftop solar panel installations grew by as much as 900% in the United States. Each year, more and more Americans were taking steps to install solar panels on their roofs, lessen their carbon footprint, and contribute excess energy back into the grid to further diminish the carbon footprint of others who could not afford solar panels. The New York Times reports that in 2017, growth in solar panel installations came “to a shuttering stop.” This was largely because of “a concerted and well-funded lobbying campaign by traditional utilities, which have been working in state capitals across the country to reverse incentives for homeowners to install solar panels.”

In addition, Instead of cutting residents a break for helping solve the climate crisis, the utility companies —led by the American Legislative Exchange Council (ALEC) and the Edison Electric Institute (whose lobbying efforts ratepayers actually underwrite)—are lobbying for the end of “net-metering” laws that let customers sell excess power they generate back to the grid.

Moreover, lobbying is frequently combined with political contributions to, and coordination with politicians.  Arizona, whose capital lies in the “Valley of the Sun,” has incredible potential for solar power. However, according to Tuscon.com last year in May, “A federal grand jury has indicted a former state utility regulator and his wife for taking bribes.” The former regulator took those bribes for approving a rate hike for the areas utility company. Despite this indictment, coordination between politicians and utilities in Arizona has not stopped. For instance, environmental groups in Arizona have proposed a constitutional amendment to the Arizona ballot that would require that 50% of Arizona’s energy needs be met with renewable energy sources by 2030. Inside Climate News reports that “a senate committee passed a separate bill—which an APS spokeswoman said the utility had proposed—that would add a second ballot initiative with a nearly identical title” The most recent bill has similar language to the one proposed by environmentalists but includes a “safety valve” that would not allow full implementation of the bill. This approach is designed to confuse and halt progress toward renewable energy.

Arizona is not the only state that has experienced corporate lobbying against climate change solutions, nor is net metering the only issue where corporations have succeeded in moving forward with policies and activities that demonstratively harm the environment. For instance, fracking continues despite numerous studies that show significant damage to the environment and public health.

There are a number of ways that we can hold corporations accountable and stop actions that negatively affect the environment.

Get Money Out of Politics

Too frequently, our politicians are able to be swayed by campaign contributions that lead to decisions that harm the American people, and put the future of our planet in jeopardy.  It is all too easy to find the enormous contributions made by companies that contribute to our carbon footprint:

According to Open Secrets: Oil and gas companies have so far contributed over $14 million to all candidates in the 2018 election cycle, electric utilities have contributed over $11 million, natural gas pipeline companies have contributed almost $2 million, and coal mining companies have contributed over $800 thousand.

If we get money out of politics legislators might be more likely to vote for policies and ideas that benefit their constituents, the environment, and the world.

Taxes That Reflect The True Cost of Pollution 

A “Carbon Tax” is traditionally considered an “economist’s solution” to fighting climate change. In short, the Carbon Tax Center describes that “A carbon tax is a fee imposed on the burning of carbon-based fuels.” There are two strong arguments for why a carbon tax is both necessary and would work.

  • It holds carbon producers and consumers accountable for the damage that their actions have on the environment. To put that damage in perspective, National Geographic reports that “Extreme weather, made worse by climate change, along with the health impacts of burning fossil fuels, has cost the U.S. economy at least $240 billion a year over the past ten years.” Economics Help describes that “The idea of a tax is to make consumers and producers pay the full social cost of producing pollution.” Money raised by the government from this tax could be used to finance initiatives that will further reduce carbon emissions (e.g. subsidizing renewable energy or carbon capture.)
  • It creates incentives to for both consumers and producers to act in ways that will reduce their carbon footprint. Producers may invest in ideas that will reduce their carbon emissions to avoid paying as much in taxes. Price increases on items or utilities that include this carbon tax may result in consumers looking to alternative energy sources, or consuming less.

Economics Help describes that “the social marginal cost (SMC) of producing the good is greater than the private marginal cost (PMC) The difference is the external cost of the pollution. The tax shifts the supply curve to S2 and therefore, consumers are forced to pay the full social marginal cost. This reduces the quantity consumed to Q2, which is the socially efficient outcome (because the SMC=SMB)”  Therefore, the tax adjusts the price of good to take into account the harm that it is doing.

Carbon Taxes are also proven to have worked elsewhere in the world. British Columbia imposed a carbon tax of 10 Canadian dollars per ton of carbon dioxide in 2008 and then raised that tax to 30 Canadian dollars per ton by 2012. The New York Times reports that the tax “reduced emissions by 5 to 15 percent with ‘negligible effects on aggregate economic performance… It encouraged people to drive somewhat less and be more careful about heating and cooling their homes. Businesses invested in energy efficiency measures and switched to less polluting fuels.”

Get the Incentives Right

Each year, the U.S. government subsidizes a range of economic activities. It is important that those subsidies encourage economic activity that will help reduce our carbon footprint and climate change.

Unfortunately, many subsidies support industries that are contributing to climate change. Researchers at Oil Change International recently found that “Government giveaways in the form of permanent tax breaks to the fossil fuel industry – one of which is over a century old – are seven times larger than those to the renewable energy sector.” These fossil fuel subsidies, including both federal subsidies and state subsidies, total to $20 billion annually.

That said, the renewable energy industry has also received a number of subsidies through the years (varying though different administrations and not to the level of those for the fossil fuel industry). These subsidies have contributed to substantial growth in the renewable energy sector. Eighteen percent of the United States energy needs are now provided by renewable energy. The Environmental and Energy Study Institute states that the U.S. has reduced its emissions “by about 760 million metric tons since 2005.” The increase in renewable energy usage has contributed significantly to that reduction.

These subsidies for renewable energy There are also other benefits to renewable energy subsidies. Quartz Media reported that “the fossil fuels not burnt because of wind and solar energy helped avoid between 3,000 and 12,700 premature deaths in the US between 2007 and 2015” and that “the US saved between $35 billion and $220 billion in that period because of avoided deaths, fewer sick days, and climate-change mitigation.” 

Incentives need to reflect economic activities that will help the environment, Americans, and the world, not harm them.

Get the Penalties Right

While incentives are important for companies that are working to help the environment, it is equally important to include penalties for companies that are harming the environment.

Most Americans are familiar with the largest oil spills in the United States like the BP oil spill, also called the Deepwater Horizon oil spill, in 2010. However, large spills that get covered in the news are only a portion of the problem. According to the latest data from the Bureau of Ocean Energy Management, excluding the BP oil spill, 287,416 barrels of oil (or 12 million gallons of oil) were spilled in the U.S. between 1964 and 2015. That equals over two hundred thousand gallons of oil a year. The BP oil spill added another 4.9 million barrels of oil spilled, totaling over two hundred million gallons of oil. (There are 42 gallons of oil in a barrel.)

A number of news organizations reported in 2015 that BP would pay more than $20 billion in settlement claims as punishment for the Deepwater Horizon oil spill. The Justice Department called the settlement historic and quoted Attorney General Loretta Lynch in saying “Building on prior actions against BP and its subsidiaries by the Department of Justice, this historic resolution is a strong and fitting response to the worst environmental disaster in American history…BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region.”

However, when you dig deeper into that settlement, that “historic” amount of money isn’t so large when you take into account U.S. tax laws that allow corporations to write off natural resource damage payments, restoration, and reimbursement of government costs. Forbes reports that ultimately “BP should be able to deduct the vast majority, a whopping $15.3 billion, on its U.S. tax return. That means American taxpayers are contributing quite a lot to this settlement, whether they know it or not.”

In other cases, companies are given penalties that can be considered negligible when their annual earnings are taken into account. The Real News reports that “In the last 12 years, Marathon Petroleum Corporation, who manage one of the largest petroleum pipeline networks in the U.S., has had 61 incidents… including recent spill of 42,000 gallons of diesel. In the same week they had to pay A fine of three hundred thousand dollars for another spill last year.” In reference to this three hundred thousand dollar fine, Sierra Club’s Jodi Perras pointed out that Marathon is “a 13.8 billion dollar company…. they will expect to have a 330 million dollar profit this year. And so they are paying $335,000 for that spill in 2016. That’s pennies to a company like that.” Ultimately, Marathon Petroleum Corporation is being fined 0.1% of their annual profits.

Penalties should be large enough to encourage constructive steps towards reducing future accidents and harm to the environment, and when they are large enough, the burden to pay them should be placed on the company, not taxpayers.

 

How We Talk About Climate Change

 

 

How we talk about climate change has the power to shape the discussion and overall perception of this important issue. A few ideas to consider:

Increase the media coverage and cover the science

The mainstream media rarely covers the important facts about climate change – even when they are directly relevant to issues or events that they are addressing.

Despite the near-continual stream of weather-related disasters and temperature records, Nexus Media reports that “fewer than half of Americans say they hear global warming discussed on the media once a month or more often.” A study by Public Citizen concludes that:

“For the public to be well-informed about climate change, it is critical that the media connect everyday coverage to climate where it is relevant, as well as cover the climate crisis directly, including developments on how we can mitigate it. On both scores, the media performed poorly in 2017. When discussing even the most clearly climate-connected topics, like record heat waves, the media mentioned climate change just 33 percent of the time. Regarding most other subjects, including hurricanes and the spread of mosquitoes, ticks, and the illnesses they carry, the coverage was far worse. One of the most important lacking pieces — a subject that appeared in just nine percent of coverage that mentioned climate change — is solutions.”

The media coverage following Hurricane Maria, with a substantial focus on President Trump throwing paper towels, is a clear example of this failure. The Guardian analyzed the media coverage of Hurricane Maria and hurricane season overall and found that “about 60% of the stories included the word Trump, and only about 5% mentioned climate change.” Coverage of the science was virtually non-existent.

“Equal” representation between climate deniers and the majority of scientists is misrepresentation

There is overwhelming consensus about climate change in the scientific community. In fact, 97% of climate scientists agree that climate change is real and caused by human activity. NASA points out that “most of the leading scientific organizations worldwide have issued public statements endorsing this position.”

It is disingenuous and misleading to give climate deniers equal time when the stakes are so high. A balanced equal-time approach between a 97% consensus about climate change against the opposing views of a few extremists, misinforms the public by giving the appearance that both positions are equally credible.

Media representation of climate change must convey the actual science. It must inform the public about how and why climate change is happening, and what options we have to address it.

The terms “uncertainty” and “theory” mean two very different things to the scientific world and the layman. The Union of Concerned Scientists describes that while to most people, the term “uncertainty” means not knowing, to scientists, “uncertainty is how well something is known. And, therein lies an important difference, especially when trying to understand what is known about climate change… climate change deniers have linked less than complete certainty with not knowing anything.”

In light of this, it is vitally important for the media to lead with the scientific findings and imperatives and to structure cogent arguments in ways that can accurately represent the scientific facts, data, and ultimately the dire need to act.

Link climate change to the shared human experience

One of the most important things we can do is to communicate the data around climate change in human terms, in a way that doesn’t require an advanced degree in climate science to understand. Some of the most important numbers and terms can also be the most confusing. The seemingly miniscule 2 degree goal in the Paris Climate Agreement, the incomprehensibly large notion of 5 quadrillion tons of air in the atmosphere, and other terminology such as the current 400 parts per million of CO2 are foreign to many people.

Climate researcher Craig Lee suggests “Simply publishing a piece that presents facts doesn’t give its audience the story behind them. When putting climate change into discussion, this ignores a very human aspect, like the cities affected by rising sea levels. Journalists and researchers alike should strive to frame climate change as a human issue, because in the end, it’s humans who will pay the price.”

The media cannot continue citing numbers without giving context for the average person to understand what those numbers mean and how those numbers and climate change broadly will have an effect on their lives.

According to 350.org, the five hottest years on record are 2016, 2015, 2014, 2013 and 2010. Scientists have predicted that unless climate change is addressed, by the end of the century Europe will suffer 150,000 heat-related deaths a year. Global grain yields have declined by 10%, which will impact the food chain and migration. Climate change related storms have caused billions of dollars of damage and incalculable human suffering. Despite all this evidence, there is a clear disconnect between what is happening and the concern of the American public. According to Gallup, less than half (45%) of Americans think that global warming will pose a serious threat in their lifetime and fewer (43%) worry a great deal about global warming.

Communication about climate change must convey the seriousness of the situation by putting it into terms that people can understand, internalize, and act upon. People need to understand that it will affect them.

 

What Can I Do About Climate Change?

 

 

People ask me all the time: ‘what can I do to fight climate change?’ And it’s a great question, because the problem seems so big, and we seem so small, that it’s hard to imagine there’s anything we could do.

For years, environmental groups focused on individual actions: new light bulbs, different kinds of cars. Those sort of changes are useful: the roof of my house is covered with solar panels, and I can plug my car into them.

I’m glad about that–it’s environmentally sound, and it saves me money. But I try not to fool myself into thinking that’s really how we’ll solve global warming. Because by this point, with the ice caps melting, we can’t make the math of climate change work one person at a time.

Instead, the biggest thing an individual can do is become…a little less of an individual.  

Join together with others to form the kind of movements that can push for changes big enough to matter. Those changes fall into three broad categories.

100% Renewable Energy

One is to push for 100% renewable energy in every town and city–and it’s a push that’s really working. Diverse cities from Atlanta to San Diego, from Salt Lake City to Portland, have all announced that they’re going to go fully renewable. In fact, when the president pulled America out of the Paris climate accords, he said it was because he’d been ‘elected to govern Pittsburgh, not Paris.’ That afternoon the mayor of Pittsburgh announced that his city was going 100% renewable.

Keep Carbon In The Ground

Second, is to keep carbon in the ground. Scientists have made it clear that at least 80% of known reserves of coal, oil, and gas have to stay underground if we’re to have any hope of meeting the climate goals the world has agreed on. That’s why we fought so hard against things like the Keystone and Dakota Access pipelines, or for a moratorium on new coal mines on public land. We win a lot of these fights around the world–and every time we put up a fight we slow down the fossil fuel industry, giving the engineers another year or two to drop the price of clean energy even further.

Divestment

And third, we work to staunch the flow of money to the fossil fuel industry. Our biggest tool is called divestment: convincing cities, states, universities, foundations, and corporations to sell the stock they hold in fossil fuel companies. This tactic–pioneered in the fight against apartheid–really works: new studies show it has focused attention on climate change and robbed companies of some of the money they need for further exploration. New York City was the latest convert, divesting its $200 billion pension funds from fossil fuels–and taking the total global commitment to nearly $7 trillion.

These are big goals–we can only accomplish them through movements. That’s why we join together, all around the country and all across the planet.

While the best thing that we can do to fight the climate crisis is to join together, we can also pair these group actions with the individual ones that climate organizations have been pushing for years.

Reducing our Carbon Footprint / Be More Energy Efficient 

The Environmental Protection Agency has reported that being more energy efficient helps the environment, as well as the checkbook. To increase your energy efficiency and reduce your carbon footprint, you can do the following:

  • Do not heat or cool your house as much as you would usually.There are two ways to do this: 1) when you are going out of the house, try setting the thermostat to 5 degrees or 10 degrees closer to the outside temperature. 2) Slightly change the temperature consistently. If you usually have it at 70 degrees in the winter, set it at 68. Heating and cooling use a significant amount of energy.
  • Unplug electric appliances and chargers when not in use. Energy.gov states that “mobile phone chargers that are left plugged in after your phone is disconnected consume .26 watts of energy — and 2.24 watts when your phone is fully charged and still connected.”
  • Use cold or warm water to wash your clothes90 percent of the total energy used by a typical washing machine is used to heat the water, while only 10 percent is used to power the motor. By simply setting your washing machine to “cold” you will be saving money on your electricity bill and reducing your carbon footprint.
  • Replace old incandescent lightbulbs with energy efficient LED lightbulbs. LED lightbulbs last longer and use much less energy. LED light bulbs use only 2-17 watts of electricity (on third to one thirtieth the amount of electricity used by older lightbulbs.)
  • Seal drafty windows and doors. Both cold and warm air can escape from your home though drafty openings which cause your heating or air-conditioning to work harder to keep your home at the right temperature and therefore consume more electricity. Weatherstripping and using caulk on cracks and gaps can go a long way to helping you save on your electricity bill and reduce your carbon footprint

*Note: this is not an exhaustive list of activities to increase your energy efficiency. 

As shown in many of the examples above reducing your carbon footprint and being more energy efficient also saves money on your energy bill. It’s a win, win situation. 

Choose Renewable Power (if possible)

According to the Union of Concerned Scientists, “electricity generation is the largest industrial polluter in the country.” Reducing this dependence is critical to slowing global warming. Switching to renewables will significantly reduce your carbon footprint.

There are a number of ways that you can use renewable energy in your home. The most independent and involved way to do this is to invest in personal renewable energy generation on your own property. Department of Energy lists a number of different renewable energy solutions and the steps that you would need to take to install them.

However, installing renewable energy like solar panels on your home can be expensive and a daunting task. Luckily, there are other, less involved, options available in many states.

According to the Institute for Energy Research (IER), 12 states currently mandate green pricing programs for utilities while many others have voluntary green pricing options. These work by allowing individuals and households to buy green energy rather than energy produced by fossil fuels. These green pricing programs work by “charging participating customers a prescribed cost per kWh of green energy purchased.” The IER states that it results in “nominal bill increases.” A couple minute phone call or email communication with your utility company can let you know if they participate in green pricing.

Eat Foods With Lower Carbon Footprints

Different foods contribute differently to your carbon footprint. The video below from Vox outlines how changing your diet can reduce your carbon footprint. Some of the elements they suggest are: reducing the portion size of the meat you eat, choosing meat that has less of a carbon footprint (e.g. choosing fish or chicken instead of beef and lamb), and even cutting out meat and eating a vegetarian, vegan diet.

 

 

In addition to adjusting your diet to eat less meat, planning meals and reducing food waste is another great way to reduce your carbon footprint. According to the National Resource Defense Council, “Approximately 10 percent of U.S. energy use goes into growing, processing, packaging, and shipping food—about 40 percent of which just winds up in the landfill.” Through decomposition in landfills, wasted food also produces greenhouse gasses and contributes to climate change. Therefore, we are not only contributing to climate change through demand for the creation of the food products, wasting the produce that we buy contributes as well.

The simplest way to address this is to waste less food. Savethefood.com has put together a simple and clear website describing some of the ways to do this, through shopping techniques (a menu plan helps!), information about what due dates mean, as well as recipes for the most commonly thrown out ingredients.

Ultimately, eating local, in season produce and cutting back on the food groups that produce higher emissions will lower your carbon footprint.

Make Green Travel Choices

Private vehicles produce more C02emissions than any other form of ground transportation. For instance, a private car produces on average 0.96 pounds of COper passenger mile compared to 0.64 from a bus, and 0.33 for commuter rail

The more that you can commute or travel by foot, bike, or public transportation, the lower your carbon footprint. Similarly, reducing air travel will also reduce your carbon footprint.  

However, in many areas around the country or because of a number of factors, personal vehicles may be the only option. Luckily, there are some minor change that you can implement in your own vehicle to reduce the CO2emissions including:

  • Accelerate more slowly. While flooring the gas gets more immediate results, it also wastes gas.
  • Speed less and use cruise control. Cars operate at peak efficiency at around 50 to 60 miles per hour. Staying within the speed limit on highways will not only make you a safer driver, it will help you save at the gas station and reduce your carbon footprint.
  • Ensure your tires are inflated to the recommended levels and your engine is tuned. Simply put, the easier it is for the engine to move the car forward, the better your gas mileage will be.
  • Avoid idling in traffic, if possible. Many cars continue to burn gas while sitting at a stoplight or in traffic. However, none of the energy produced is being used to move the car anywhere.
  • Remove excess weight from your car. Simply put: it takes more energy and therefore more gas to move a heavier car.

These and other pieces of advice to make your car more efficient and contribute less to your carbon footprint can be found at Cotap.org.

Recycle

While this is the most commonly cited way to “help the environment” that does not make it any less important. Many people do not realize the impact that creating so much wast has on the environment. Some quick facts to put this int perspective: Almost 80% of plastics end up in landfill or dumps or is littered into the environment and almost half (47%) of plastic waste is made up of plastic packaging.

A clear example of this waste can be found in our use of plastic bags. Americans use 100 billion plastic bags each year. That breaks down to 1,500 plastic shopping bags that are taken home by the average American family. In addition, these bags are only used for about 12 minutes. They are also very unlikely to be recycled: only 1% of bags are returned for recycling. This must change, not only for plastic bags but for many different single-use plastics.

Landfill produces significant amounts of greenhouse gasses and therefore reducing the amount of trash we produce would greatly reduce those emissions.

Recycling also reduces the demand for new products and therefore slows the use of limited natural resources. The organization LessIsMore.org lists some of the way that recycling helps conserve the environment:

  • “One ton of paper recycle saves 17 trees.”
  • “One ton of plastic saves 16.3 barrels of oil.”
  • “One ton of aluminum saves 4 tons of Bauxite Ore.”
  • “One ton of glass saves one ton of mixed limestone, soda ash and sand.”

Taking a couple extra moments every day to recycle can have a significant impact on the environment.

The Next Crash

September 15th will mark the tenth anniversary of the collapse of Lehman Brothers and near meltdown of Wall Street, followed by the Great Recession. Since hitting bottom in 2009, the economy has grown steadily, the stock market has soared, and corporate profits have ballooned.

But most Americans are still living in the shadow of the Great Recession. More have jobs, to be sure. But they haven’t seen any rise in their wages, adjusted for inflation.

Many are worse off due to the escalating costs of housing, healthcare, and education. And the value of whatever assets they own is less than in 2007.

Last year, about 40 percent of American families struggled to meet at least one basic need – food, health care, housing or utilities, according to an Urban Institute survey.

All of which suggests we’re careening toward the same sort of crash we had in 2008, and possibly as bad as 1929.

Clear away the financial rubble from those two former crashes and you’d see they both followed upon widening imbalances between the capacity of most people to buy, and what they as workers could produce. Each of these imbalances finally tipped the economy over.

The same imbalance has been growing again. The richest 1 percent of Americans now takes home about 20 percent of total income, and owns over 40 percent of the nation’s wealth.

These are close to the peaks of 1928 and 2007.

The U.S. economy crashes when it becomes too top heavy because the economy depends on consumer spending to keep it going, yet the rich don’t spend nearly as much of their income as the middle class and the poor.

For a time, the middle class and poor can keep the economy going nonetheless by borrowing. But, as in 1929 and 2008, debt bubbles eventually burst.

We’re getting dangerously close. By the first quarter of this year, household debt was at an all-time high of $13.2 trillion.

Almost 80 percent of Americans are now living paycheck to paycheck. In a recent Federal Reserve survey, 40 percent of Americans said they wouldn’t be able to pay their bills if faced with a $400 emergency.

They’ve managed their debts because interest rates have remained low. But the days of low rates are coming to an end.

The underlying problem isn’t that Americans have been living beyond their means. It’s that their means haven’t been keeping up with the growing economy. Most gains have gone to the top.

It was similar in the years leading up to the crash of 2008. Between 1983 and 2007, household debt soared while most economic gains went to the top. Had the majority of households taken home a larger share, they wouldn’t have needed to go so deeply into debt.

Similarly, between 1913 and 1928, the ratio of personal debt to the total national economy nearly doubled. As Mariner Eccles, chairman of the Federal Reserve Board from 1934 to 1948, explained: “As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing.”

Eventually there were “no more poker chips to be loaned on credit,” Eccles said, and “when … credit ran out, the game stopped.”

After the 1929 crash, the government invented new ways to boost wages – Social Security, unemployment insurance, overtime pay, a minimum wage, the requirement that employers bargain with labor unions, and, finally, a full-employment program called World War II.

After the 2008 crash, the government bailed out the banks and pumped enough money into the economy to contain the slide. But apart from the Affordable Care Act, nothing was done to address the underlying problem of stagnant wages.

Trump and his Republican enablers are now reversing regulations put in place to stop Wall Street’s excessively risky lending.

But Trump’s real contributions to the next crash are his sabotage of the Affordable Care Act, rollback of overtime pay, burdens on labor organizing, tax reductions for corporations and the wealthy but not for most workers, cuts in programs for the poor, and proposed cuts in Medicare and Medicaid – all of which put more stress on the paychecks of most Americans.

Ten years after Lehman Brothers collapsed, it’s important to understand that the real root of the Great Recession wasn’t a banking crisis. It was the growing imbalance between consumer spending and total output – brought on by stagnant wages and widening inequality.

That imbalance is back. Watch your wallets.