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    From Climate Change to Climate Action-Climate Skepticism Will Not Achieve Net Zero

    August 2021

    We have come a long way along. Policies to green the economy, such as carbon taxes and emissions trading, are well understood, and getting to net zero is technologically and commercially feasible. But the biggest obstacle in my opinion is still ahead of us: mobilizing the political will and mass public support for solutions we know are needed but that are more radical and demanding than anything done so far.

    Most politicians are nominally committed to net zero. Fewer are prepared to administer the shock that meaningful decarbonization entails-carbon-intensive activities will become dramatically more costly or inconvenient for those who undertake them. Climate change politics in my opinion is in danger of being subsumed by the culture wars that have riven western societies. It is easy to cast these policies as simply intended to penalize the lifestyles of everyone but urban liberals. And many, from ill-intentioned states to carbon-reliant businesses, have an interest in surreptitiously fueling climate skepticism. Outright climate change denial grafted on to far-right anti-wokeism is not, however, the greatest problem. The real culture war threat is in my opinion something more subtle.

    A sociological study of France’s yellow vest activities shows that far from being climate sceptics, they are well aware of the threat of climate change and support containing it. What they object to are policies that put the burden on those already suffering most from economic change.

    Similarly, a report by the Tony Blair Institute finds that most people in the UK accept that climate change requires emission cuts. Nevertheless, they are poorly informed about what exactly “net zero” involves, and particularly unconvinced that they themselves are the ones who need to do anything. The final hurdle on the road to decarbonization, then, is as it seems not to convince the public that climate change is real, but to overcome suspicions that any policy is dishonest, ineffective and places the burden on those who least deserve to bear it.

    We in my opinion will fail unless we match a broad acceptance of the climate challenge with an equally broad acceptance of the means to address it, by ensuring those means both are and more important are seen to be fair. Calls for a “just transition” prove that politicians know this. But lip service is of course not enough. These fearful or forceful climate change policies need to experience that these policies make them demonstrably better off.

    That is what makes the Canadian experiment so important:

    This year, each family of four in rural Saskatchewan will receive 1.100 US-dollar as a refundable tax credit from the Canadian government. It corresponds roughly to the amount Ottawa collects in yearly carbon taxes on the province’s citizens- for most of whom the “Climate Action Incentive Payment” more than covers the additional costs they face because of the tax. It is so far one of very few real-world cases of “carbon-tax-and-dividend”, a policy pioneered at a provincial level by British Columbia. Yet, in my opinion, it’s the most promising approach if countries are to overcome the biggest remaining hurdle on the path to decarbonization.

    The general idea of carbon-tax-and-dividend combines a step tax on emissions with redistributing the revenue to individuals, on an equal lump sum basis or titled in favor of the poor and those in less populated areas. Its backers range from US Republican grandees to Europe’s green parties, from German and French government economic advisers to James Hanson, the “godfather of climate science”.

    Because of the poor emit less absolute carbon than the rich, but more relative to their budget, the “dividend” part of the policy more than compensates a majority of the population-in outright payments-for the higher price of energy they face. It is in my opinion a far distribution of burdens, and the hope is that it is also seen to be fair. To be able to improve this approach I would suggest to ensure that the benefits are more visible. Cheques in the mail or monthly account payments rather than a credit off annual tax bills a name highlighting the link with the carbon taxi individual rather than household entitlements-all these would in my opinion make the upside of the policy more salient in voters’ minds. Therefore, politicians serious about net zero should adopt green policy without delay.