Required & Progressive Carbon Offsets
I am a member and supporter of the Citizen’s Climate Lobby, a national and nonpartisan organization that lobbies Congress to pass a carbon fee and dividend plan. Numerous studies have shown that adding a fee to all fossil fuels at the source is a relatively simple but very effective means of quickly reducing greenhouse gas emissions while stimulating innovation. The dividend component of the bill endorsed by CCL returns all of the money collected to citizens. Most of those with incomes below the mean would collect dividends that more than cover the increased fuel costs while households with larger incomes, bigger houses and more frequent travel, would end up paying more.
While I still consider a carbon fee to be an important piece of the puzzle needed to curtail global warming, I’ve wondered whether this will have the impact that the models predict. These doubts were stimulated, in part, by a visit to Nantucket. In my western Massachusetts community, many houses have rooftop solar panels and Prius’ on the road but, while the financial resources of the typical household in Nantucket far outweigh those in my region of the state, few of the exceptionally large houses in Nantucket had rooftop solar. However; I did see large teams of gardeners using gas-powered equipment and nearly every vehicle on the busy roads was an SUV. Would the owners of the yachts in the Nantucket harbor really care if they paid more for fuel? I have my doubts.
These observations brought to mind the data in the Emissions Gap Report 2020 from the United Nations Environment Programme (UNEP), which analyzed the gap between the reduction in emissions needed to reach climate goals and the actions taken to date. One of the factors discussed in that report was the relationship between income and emissions. Studies have found that the top 10% of wage earners are responsible for emitting about 36–49% of the global total while the emissions share of the bottom 50% of wage earners is only 7–15% of the total. This disparity is even more striking when examining the carbon footprint of the top 1%, which is roughly double that of the bottom 50%.
The American public’s fascination with lifestyles of the rich and famous is similarly striking. It’s not uncommon to read of a celebrity, star athlete, or tech billionaire living in a massive house with dozens of rooms, flying in private jets, or traveling in their yachts, as if this extravagance is something to be admired and a source of aspiration. Clearly, the problem of emissions is not equal across demographic groups.
In lieu of an across-the-board carbon fee, it might make more sense to require carbon offsets of individual households based on their carbon footprint.
The focus of most climate activism has been on the industries, including power plants, that generate the carbon pollution and the need for governmental action to regulate those industries. However, many of those polluters are producing consumer products, so perhaps the reduction of greenhouse gases could also be addressed through a focus on the end-users.
Two studies cited in the UNEP report estimated that household consumption accounts for about two-thirds of GHG emissions. If the actions of consumers changes, then polluters would need to adjust accordingly. Industries supply our energy needs but consumers create the demand for that energy. The role of individual behaviors has often been minimized or dismissed but the current trajectory of global warming is such that it’s not a matter of either/or but both/and. We need drastic and immediate reductions in emissions from all quarters, polluters and regulators for certain — but also consumers.
A carbon offset is a reduction of atmospheric greenhouse gas emissions taken to compensate for gases emitted elsewhere. Because greenhouse gases mix into the planetary atmosphere, it does not matter where the removal occurs. It is always preferable to prevent GHG emissions at their source but that is not always possible and carbon offsets can lower the impact of those actions.
Recent studies have found that not all carbon offsets are alike and some companies have been guilty of “greenwashing,” promoting actions described as climate friendly but that have little or no impact. As I see it, this is not a problem with the concept of carbon offsets but in the lack of valid data and the monitoring associated with that label.
The offsets I am proposing would be progressive and required, which means that they would operate similarly to income taxes. Households with a small or modest carbon footprint would not be required to pay any offsets while those with a lifestyle that causes a lot of greenhouse gas emissions would pay an offset proportional to the size of their footprint. The multi-millionaires and billionaires who protest the offset could choose to reduce their carbon footprints by putting solar panels on their houses, flying private jets with sustainable aviation fuel, or docking their yachts and using sailboats.
There could be obstacles with collecting the necessary information for a progressive, required carbon offset but, given current technologies, it seems feasible. Much of the information is readily available, such as the kilowatts of electricity, cubic feet of natural gas, or gallons of heating oil used by households. The emissions of vehicles could be estimated based on the make and model of the vehicle and yearly miles driven, collected at times of renewable of registration or insurance. The data on emissions from private jets and large boats could be obtained from flight plans, GPS, or quantities of fuel being pumped. If tolls on highways can be assessed from transponders on speeding cars and prices of groceries read by bar codes at supermarkets, then there should be ways to collect data about the fossil fuel usage of households.
The carbon footprint data would be provided to all households, even those whose small footprint would not trigger an offset fee, and this would increase awareness about the climate impacts of daily decisions for everyone. Psychologists refer to this as performance feedback and it is an effective means for changing behavior. If individuals knew the amount of CO2 they sent into the atmosphere, many will make an effort to adjust their behaviors. We see this when the posted speed limit on a road is accompanied by a flashing sign showing our current speed and we slow down — even if no police car is there to give a speeding ticket.
The IRS was given a large influx of new funding in the IRA bill and I assume that the assessment and collection of the offset fees could be delegated to them as an additional responsibility. To some degree, the infrastructure for this expanded role already exists.
Unlike the CCL Carbon Fee and Dividend plans, where the money is returned to citizens, I would like to see the funds raised through the offsets given to the UN Climate Fund.
Models of global warming show that much of the increase in emissions will come from developing countries, which is where populations are projected to increase dramatically and their citizens look to install electricity, buy cars or air conditioners, and other comforts that are taken for granted in wealthier nations.
A major source of disagreement at the annual Conference of the Parties (COP) has been between developed and developing countries. This was an important topic at the most recent COP in Egypt, stimulated in part by the devastating floods in Pakistan, a country that has contributed little to the planet’s warming. The citizens of developed nations have a comfortable standard of living that has come at the cost of a sustainable climate while developing nations are most at-risk from climate catastrophes and least able to recover when catastrophes do occur. Those nations need substantial financial and technical support in adapting to deadly climate impacts and improving the wellbeing of their populations without exacerbating global warming. The Climate Fund was established to facilitate that development but the financial commitments made by developed nations have not been reached. This was, of course, made worse by the withdrawal of the US from the Paris Accord under Trump and his refusal to contribute to the Climate Fund.
A required and progressive carbon offset fee in the United States (and hopefully other wealthy nations would follow the example) could help reduce emissions while working to correct the extreme and unjust inequity among nations.
