Climate Scientist Promotes Carbon Fee and Dividend System to Reduce Burning of Fossil Fuels

Posted April 27, 2016

MP3 Excerpts of conversation between climate scientist James Hansen and Robert Dubrow, professor of epidemiology and faculty director of the initiative at Yale's School of Public Health, recorded and produced by Melinda Tuhus


Former NASA climate scientist James Hansen is one of the world's leading authorities on climate change. He testified before Congress back in 1988 that global warming was already occurring due to the burning of fossil fuels, becoming one of the first scientists to go on the record with that assertion. Hansen now works at Columbia University's Earth Institute, where he continues to do research and publish ground-breaking papers on climate change. But he's also an advocate for the need to take action.

He has been arrested several times in civil disobedience actions in opposition to mountaintop removal coal-mining and the now-dead Keystone XL pipeline. Hansen has promoted placing a price on carbon through a "fee and dividend" approach, in which everyone would pay higher prices for fossil fuels, but all legal U.S. residents would share equally in a rebate, thereby rewarding those who conserve. He thinks the other method of pricing carbon, through a cap and trade system, is a gimmick that wouldn't achieve its expressed goal.

Hansen visited Yale University in early April as the Yale Climate Change and Health Initiative's "Climate Change Leader in Residence." What follows are excerpts from his April 8 conversation with Robert Dubrow, professor of epidemiology and faculty director of the initiative at Yale's School of Public Health.

JAMES HANSEN: As long as fossil fuels are allowed to be the cheapest energy, then they're going to continue to be burned. I don't care what agreements you have in Paris or anyplace else; they're just scraps of paper. If fossil fuels appear to the consumer to be the cheapest energy, then they'll continue to burn them. And the problem is that they're not really the cheapest to society – they don't include their costs to society – the human health effects of air pollution and water pollution of fossil fuels, and the climate effects are not included.

So the way to allow clean energies and energy efficiency to compete most effectively with fossil fuels is to put a rising fee on fossil fuels that you'd collect from the fossil fuel company at the domestic mine or port of entry. And of course, the fossil fuel companies will add that to the price of fuel, so it's going to make fossil fuel more expensive, but it will just make their price more honest. And an economy is more effective if the prices are honest and reflect the true costs. So it will actually be economically beneficial to do that. If you simply make energy more expensive, that depresses the economy; however, if the money that's collected is put back into the economy by giving it to the public – an equal amount for all legal residents – then it actually spurs the economy, because it's a somewhat progressive tax. Poor people have a smaller carbon footprint than rich people.

So there'll be a moderate impact on the inequality of wealth. But the main purpose is to provide the right incentives for both people – a person who does better than average in limiting their fossil fuel use will make money, will come out ahead – but if they want to stay on the positive side of the ledger they're going to have to pay attention to their purchases. They won't even have to think about many of them; some of them will be obvious, like the efficiency of the vehicle you drive, but others will just show up in the price of things on the shelf. Food that's imported from New Zealand (chuckles) – which we do import now – will become relatively more expensive than food from the nearby farm.

But you have to do this gradually; you can suddenly make fossil fuels more expensive, so you do it with this gradually rising fee. And this is the only way. The reason this is crucial is this is the only way you can make it international, that you can make it global. And the world is not doing this. And none of the policies in the United States or Europe or the different states – they're all trying this screwy cap and trade with offsets, because it allows lots of finagling. It allows you to give favors to this lobbyist or that one. But you'd have to ask each of 190 countries to have a cap. Well, that's what they're trying to do. They're encouraging, "Tell us what your cap is going to be." Well, it doesn't matter what they say. As long as fossil fuels are cheapest, they're going to keep burning them. And so you can't do it with caps. What is a cap on India? India has burned only 1/20th as much CO2 as we have, fossil fuels. They have no reason to accept a low cap. So you have to do it with a carbon fee, and the reason that would work is that China and the U.S. agreed to have a carbon fee, then almost all countries would be coerced to do the same thing, because you'd put a border duty on products from countries that don't have a carbon fee and that would be a huge incentive for them to have their own carbon fee so they can collect the money themselves rather than have us collect it at the border. And that's consistent with what Bill Nordhaus calls the Climate Club. The essential members of the club that you start with are China and the U.S.

ROB DUBROW: Do you see any prospects for that actually happening politically? Do you think China might take the lead? The U.S. might take the lead? What do you think might happen?

JAMES HANSEN: I think there's a very good chance that China might take the lead, because they have a huge incentive – not climate – they do have a big climate incentive and there are no deniers in the Chinese government (chuckles). They know climate change is real. They're already feeling it. They have a 1.5 standard deviation shift from this bell curve while the U.S. is only between a half and 1.

ROB DUBROWN: So they're actually feeling climate change more?

JAMES HANSEN: They're feeling it and they have more than 300 million people living near sea level. And the leaders of China are engineer-trained. They know this is not a hoax that scientists are dreaming up. But they have this air pollution, which is so bad, that they have a big incentive to face that down, and so, it would actually make sense for them to have … and they have a hard time doing it. They tried to regulate it and say stop this emission here and there, but then how do you enforce that? But if you had a rising carbon fee on fossil fuels, it would be a big incentive, which would move things faster toward clean energies.

See Hansen's latest study, "Carbon Tax & 100% Dividend vs. Tax & Trade,".

Related Links:

Subscribe and get Between The Lines' Weekly Summary in your inbox!