Bill Totten's Weblog

Wednesday, November 01, 2006

Why we must ration the future

You can't bargain with the planet because it doesn't care whether or not targets are "politically acceptable". So unless we secure a deal determining how much carbon each nation and each person can emit, we simply will not survive.

by Mark Lynas

New Statesman Cover Story (October 23 2006)

The best indication of whether a person truly grasps the scale of the global climate crisis is not whether they drive a hybrid car or offset their flights, nor whether they subscribe to the Ecologist or plan to attach a wind turbine to their house. The most reliable indicator is whether they support carbon rationing. The received political wisdom is that the general public will recoil in horror at a scheme whose very name recalls wartime national emergencies and austerity. Rationing is the opposite of today's consumerist free-for-all, where economic growth is the highest objective of government policy.

But that is precisely the point. It is because carbon rationing represents a total break with business as usual that it is the only climate-change policy that will work. Let me put it simply: if we go on emitting greenhouse gases at anything like the current rate, most of the surface of the globe will be rendered uninhabitable within the lifetimes of most readers of this article. We must reduce our emissions by ninety per cent or so within three or four decades if we are to have any chance of avoiding this looming catastrophe.

That challenge requires collective, conscious action, involving a planned transition from a high-carbon economy to a low-carbon one. Just as we did not hope to win the Second World War by muddling through with a pre-1939 economy, we cannot hope to face down today's emergency without completely altering our national priorities. Defeating Hitler was our number-one aim in 1940: it ranked above health, education, crime and all the other day-to-day concerns of government, requiring a supreme effort of mobilisation. Defeating global warming must be our priority today, or we will lose this war, and with it our very existence as a civilisation.

At an international level, some variant of rationing is nothing less than a mathematical inevitability. Let us assume that at some stage in the near future - perhaps after a change of regime in Washington, DC - world governments hammer out an agreement about what constitutes a "dangerous" level of carbon dioxide in the atmosphere. Today, atmospheric carbon dioxide stands at 380 parts per million by volume, a higher level than at any time since the Eocene era (35 to 55 million years ago). According to the modellers, stabilising at 400 parts per million yields a three-to-one chance that global temperature increases would level off on this side of two degrees Celsius, saving us from calamitous rates of sea-level rise and a mass extinction that would otherwise wipe out more than half of life on earth.

But this 400 parts per million target means that only eighty billion tonnes more carbon can be emitted by humanity over the next few decades. This figure is non-negotiable: you can't bargain with the atmosphere. How the remaining carbon budget is divided between human beings, however, involves a decision about rationing. The most likely outcome is that it will be divided among the world's countries on the basis of their populations - in other words, we will all get an equal ration.

Equity is inevitable, and not because future world leaders will be bleeding-heart liberals, but because no developing-world government will ever accede to an agreement that freezes existing global inequalities. The choice facing rich-country governments, in other words, is between inequity or survival. The government of India, for example, will not sign an agreement that gives its people twenty times less of the remaining budget on a per-person basis than Americans get, and nor should it be expected to. China will not sign a document that gives the Chinese only a third of what British people receive. (Annual per-capita carbon-dioxide emissions are approximately one tonne in India, twenty tonnes in the United States, ten tonnes in the UK and three tonnes in China.) Indeed, given the rich world's disproportionate historical responsibility for causing climate change, developing countries may well demand a higher ration of the remaining budget than rich countries receive.

This mathematical equation, of a convergence towards equal per-capita carbon allocations in the context of a contraction of overall global emissions, is the framework known as contraction and convergence. Many people - environmentalists included - have railed against it, but no one has ever been able to propose a viable alternative. Plenty of other initiatives and proposals exist (of which the Kyoto Protocol is one) but they all add up to nothing more than guesswork, with no definable outcome, when set against the remorseless logical framework of contraction and convergence. (The originator of contraction and convergence, Aubrey Meyer, was profiled as one of "ten people who could change the world" in the New Statesman of 17 October 2005.)

If climate change is to be solved, global emissions will have to contract (to sustainable levels) and converge (towards zero). There is no other way to join the dots on the graph. The question is whether world leaders will face the inevitable before it is too late. If we are to hit the 400 parts per million target, scarcely a decade remains before we must begin cutting emissions across the whole global economy. And after that particular climatic window closes, global warming may spiral quickly out of control.

To say that 400 parts per million is an ambitious target is a colossal understatement: Sir David King has advocated 550 parts per million as the lowest politically achievable target. Given his role as chief scientific adviser to the government, Sir David is presumably aware that this represents nothing less than a death sentence for half the world's population. In advocating it, he is veering dangerously close to what some campaigners have called "the economics of genocide". It is irrelevant to the biosphere what any of us considers to be "politically realistic": it obeys the hard laws of physics and chemistry, not the rather more flexible laws of economics and politics.

Make carbon allocations tradeable

Domestic carbon rationing is the national corollary of contraction and convergence. Like the monetary budget within which all governments and individuals are accustomed to operating, the carbon budget is non-negotiable. Unlike "green taxes" or any of the other assorted climate policies recently discussed at party conferences, only a top-down carbon rationing scheme can deliver a predetermined outcome with any certainty. Whether taxes, for instance, actually reduce carbon consumption depends on what people are prepared to pay. Taxes are also important to raise revenue, presenting the government with a conflict of interest.

Moreover, taxation is simply a hidden way of rationing via the price mechanism - something likely to be as unpopular as it is unfair. If conspicuous carbon consumption by the rich goes unchallenged (think of David Beckham's sports cars), any popular effort on climate change will collapse, just as the war effort would have been fatally undermined had the royal family been given a higher food ration in 1940. Instead, the sight of aristocrats and dock workers all mucking in showed a country united in its determination to defeat Nazism.

One important difference from war time rationing is that future carbon allocations would need to be tradeable in order to make the system flexible. If person A really wants to fly to Australia to see his mother, and person B (who doesn't have a car) is happy to sell him some unused quota, so much the better - the overall objective of carbon reduction is still achieved (because the annual national budget declines), but people don't lose their freedom of action. Moreover, trading gives a financial incentive for low-carbon innovations: if a new invention needs less of your ration, it will become more attractive. If having solar panels on your house allows you to cash in your unused ration, they become not just affordable, but desirable. At a macro level, business has an incentive to make long-term investment decisions.

For individuals, carbon rationing would operate as a parallel currency: when purchasing high-carbon goods (petrol for a car, overseas flights) a proportion of carbon currency would be surrendered at the point of sale. Given that only half the national carbon output stems from individuals' direct choices, the other half would probably be auctioned by the government to private business to cover manufacturing and services. So if you're buying bananas or having a haircut, the carbon ration will already have been paid for by the company, and its cost built into the end price for the consumer.

Unlike the ration books of the wartime era, modern rationing could be electronic, operating on the same principle as debit cards do with a current account. If a person lacks the carbon credits to cover a purchase, he or she could buy on the "spot" market at the point of sale, just as pay-as-you-go mobile-phone users top up their credit in order to make a call.

So will the general public accept rationing? David Miliband, the Environment Secretary, one of the few senior politicians who seems to "get it" on climate change, suggests they will, and floated the idea of carbon rationing at a major speech to the Audit Commission on 19 July. I am told privately that, for the Conservatives, Oliver Letwin is an "anorak" on the issue, having spent hours poring over the nuts and bolts of a rationing scheme. Most surprisingly, whenever I propose carbon rationing at public meetings around the country, it seems to generate a spontaneous round of applause. Perhaps the public is less backward on climate change than many politicians like to assume. Perhaps people also realise that the kind of society carbon rationing would usher in, with resurgent communities and small-scale agriculture, would actually be highly beneficial for most of us.

Nevertheless, imposing such a scheme - and imposed it must be, as participation could not be voluntary - would require political leadership and vision of the sort that seems to be in scarce supply in today's corridors of power. But such leadership need not, in the long term, be unpopular. Nor would it be incompatible with democracy. Who would march in Trafalgar Square against solving climate change? Probably about as many people as marched against rationing in 1940: none.

So how would it actually work?

by Sam Alexandroni

Every adult receives an equal carbon allowance (children get less) based on a yearly budget, which is reduced each year and set by an independent committee.

This allowance is divided into units. These are often referred to as tradeable energy quotas (TEQs). Every time you buy petrol, pay an electricity bill or book a flight, a number of units, equivalent to that amount of energy, is deducted from your TEQ account - in most cases automatically via direct debit. If you do not have enough units in your account, the price goes up to cover the shortfall.

TEQs behave like any commodity, fluctuating in price depending on demand and availability. If too many people use too much carbon, the units become scarce and the price goes up, making it uneconomical to live far beyond your personal allowance. This creates a powerful economic incentive to reduce carbon output, and to profit by selling the excess units.

Only part of the yearly carbon budget is divided among individuals; the rest is sold to governments and industry at a weekly tender. Each business must manage its carbon output to remain profitable. For example, a transatlantic flight might initially account for one-third of a person's carbon allowance, but as this allowance decreases, aviation would have to become greener or flights more expensive.

The demand this would create for low-carbon living would produce a ready market for green technology and new opportunities for industry. The growth in this sector would balance any economic slowdown elsewhere and lead to a gradual shift in technology and lifestyle, enabling people to live within their personal carbon allowance despite yearly reductions.

Rationing by numbers

Research by Sam Alexandroni

10 tonnes of carbon dioxide are emitted per person in the UK each year

20 tonnes of carbon dioxide are emitted per person in the US each year

3 tonnes the target for maximum annual carbon-dioxide emissions for each person by 2020

2.4 tonnes annual cost in carbon dioxide of powering the average British home

5.5 tonnes carbon-dioxide cost of a return flight from London to Sydney

25 billion tonnes of carbon dioxide are emitted globally each year

Copyright (c) New Statesman 1913 - 2006

Bill Totten


  • The problem with creating a market for pollution is the assumption that
    the market produces equity, which is false. Its like creating a market for sin, or diseases or body parts, monetizing birth rights to be traded
    as commodities. Pollution is not an economic problem. It is a moral problem with economic dimensions. Pollution exist because the penalty
    for polluting is set at a lower value than the benefits of pollution. If meat of children commands a price lower that beef, people will find a rationale to eat children, mostly likely the children of the poor. Civilized societies do not permit cannabalism at any cost. The same must apply to pollution. If human survival depends on halting pollution, the cost of pollution must be set high enough so that pollution will be rendered uneconomic. One way to do this is to require clean energy engineering to eliminate the emmission of carbon whatever the cost. The price of energy should be tied to income; higher income economies pay more per unit of energy consumed. The fact is that the current market approach to pollution cannot solve the problem.

    Henry C K Liu

    By Anonymous Anonymous, at 12:50 PM, November 01, 2006  

  • But it's not rationing you are objecting to, it is the tradeability of rations. I'm afraid markets are pretty much a given - even if you banned people from doing it (which would be about as effective as trying to ban sex or alcohol) you can bet a thriving black market would quickly spring up. What is crucial to understand is that equity comes from everyone having an equal share assigned to them each year. They can then trade what they don't need, or if they think they need more, for flexibility and efficiency. Moralising is fine, but doesn't make for practical government policy, does it?

    All best,

    By Anonymous Anonymous, at 10:27 AM, November 04, 2006  

Post a Comment

<< Home