Thomas Paine’s Climate Solution: Would He Recognize It?

In the near future we are likely to see a push for a climate cap-and-dividend system in the United States, which many climate activists see as the last, best hope of getting serious U.S. commitment to greenhouse gas reduction.

Since a solid commitment from the United States could break the gridlock in international climate diplomacy, there is a lot riding on this campaign.

The Citizen’s Climate Lobby, a grassroots group that in recent years has seen the number of local chapters doubling almost annually, has zeroed in on cap-and-dividend as the most promising strategy for climate action and is training climate activists to be cap-and-dividend lobbyists.

Technically, what Citizen’s Climate Lobby proposes is a “fee and dividend” system where the government sets a price that rises over time, rather than a cap that diminishes over time. The cap approach offers more secure climate protection; a fee approach makes it easier for businesses to plan ahead.

U.S. conservatives find a voice

U.S. conservatives concerned about climate change – those who for so long have been drowned out by know-nothings in the Republican party – have recently found an effective voice in former Congressman Bob Inglis.

Inglis supports a revenue-neutral carbon tax – namely, imposing a tax on carbon while reducing the payroll tax. This is similar to the approach taken in British Columbia.

A cap-and-dividend program would not be a panacea for climate problems. It could effectively cap carbon emissions, but unlike a straightforward carbon tax, it would not serve to fund much-needed public investments in energy efficiency and infrastructure for climate change mitigation and adaptation.

A social dividend isn’t an economic silver bullet either. As critics of the Alaska PFD point out, there is no guarantee that households will use dividend income wisely.

Climate dividends not spent on rising energy costs might be spent on “cheap crap from China” (in the words of one recent commentator) or in other ways many of us would consider unproductive.

But these objections pale beside two larger points. One is moral: since the sky belongs to all of us, we have a legitimate right to compensation when it is polluted.

The other is hard-nosed politics: a social dividend might just be a winning formula for climate action, one that both liberals and conservatives can agree on.

Paine’s Vision

We might ask, though – would Thomas Paine recognize his brainchild if it came in the form of carbon cap-and-dividend?

The idea of being part owner of the blue sky as a sink for invisible carbon is very abstract. It doesn’t grab the imagination as readily as the prospect of having a stake in a state’s oil fields or a nation’s farmland.

And a tax refund or utility rebate is a fairly mundane bit of accounting. It doesn’t seem nearly as revolutionary as requiring great barons and magnates to compensate their neighbors for fencing off a piece of God’s creation, as Paine proposed in 1797.

That may be so. But to use the words of Peter Barnes, a carbon cap-and-dividend system would “lay the pipes” along which other types of social dividend could eventually flow.

These could include dividends from national mineral wealth, forest wealth, urban land values, the broadcast spectrum (which today in the United States is given away to communications behemoths for a song) and more.

Eventually the flow through those pipes may increase to the point where they offer the security and dignity of a modest, well-deserved trust fund.

And when that happens, citizens may come to see themselves, as Paine envisioned them, as not mere squatters on this earth but part-owners, trustees and equal beneficiaries.