Credit: Wikimedia Commons/ Huw Williams

Credit: Wikimedia Commons/ Huw Williams

 

The Canadian Climate Leadership Council recently proposed a plan that was supported by 27 Nobel laureates in economics and other business dignitaries, calling for the introduction of a national carbon tax starting at $40 per ton of carbon dioxide. The base argumentation used was primarily economic efficiency and climate fatalism. The underlying logic seemed closer to abstract academic theory than sound economic reasoning. More has been happening recently, with an obvious reference being made to Brexit, as politicians tend to lead the public without a clear understanding of the costs and consequences, jumping into reckless actions while lacking trustworthy and elaborate impact assessments and risk analyses.

 

Canada is one of the zealot countries, diehard supportive of climate change policies and the Paris accords. Ottawa has been on the forefront of the global climate efforts, following and often leading France’s example on the introduction of a dedicated carbon tax meant to finance global climate policies, including programs in developing countries, helping and speeding their transition to a low-carbon economy.

 

The United States has refused to abandon economic sense and the prime truth that policies might come at a prohibitive cost and affect people, communities and companies. Washington opted for a more cautious track in meeting national climate goals.

 

Germany, France and Canada instead took the lead in the global climate change drive.

 

Data and experience are telling a story that departs from the initial exuberant optimism that climate goals are within easy reach. Shocking failures by governments to introduce the 2 percent carbon tax on all industries and citizens have led to painstaking reconsiderations.

 

The time has come to go explore in-depth and try to understand the common factors behind the public’s rebuttal of governments’ attempts to dig deeper into the taxpayer’s and consumers’ pockets.  The “yellow vests” took to the streets en masse, and suddenly, the foregone public consensus seemed shattered beyond the grasp of the leaders of the global climate movement, Macron and Trudeau.

 

German Chancellor Merkel in the meantime continued unabated with her resolve to shut down both nuclear and coal energy plants, adding more evidence that Germany often generates bizarreness in political history in pursuit of its self-perceived uniqueness.

 

The motto “Climatists of all countries, unite” seems no longer to attract disciples as many have started to face the real cost and cover the hefty bills of the blind collective climatic defense zeal.

 

Ordinary people feel the draft and the duplicity, as on the one hand, ambitions to aim highest with the targets in carbon emission reduction and attempt to resolve the climate change issue within the lifespan of a generation seem appealing, while on the other, the material cost of such an undertaking settles down in the mindset of ordinary people as they realize that they are supposed to carry the cost of a global carbon tax. As the Bulgarian government and the public in general start to grasp the social and economic shock of an early closure the TPP Maritsa-East, the full picture spells a scary future and tectonic impact. There is not a strategy for a soft exit from coal, no plan to upgrade coal generation capacities, or develop alternatives both at source level and as a national energy system backup.  Renewables are simply unfit to replace the whole range of virtues of the locally sourced, locally produced power. A belated rush to seek derogations – desperate attempts to seek derogation and delay foreclosure – could hardly make up for the lack of vision and strategy. The price of carbon emission is beyond control, left to the mercy of market speculation with 40 euros per ton within sight – which equals bankruptcy.

 

It is an enlightening thought for many that in its present dystopic and schismatic format, the Paris Accords and its climate-based policies are doomed.

 

US President Trump is far from a common hero, but his basic business instincts serve him right to understand that even in the richest countries governments tend to live within their means.

 

The idea that a universal carbon tax could upscale existing regulatory regimes in the area of climate change, generating an expanding and self-sustaining financial market base, covering the cost of climate policies, has proven naïve, at best.

 

Despite the constant apocalyptic predictions and info-bombs that climate scientists and economists keep dropping, in the belief that constituencies should be stressed before agreeing to bear escalating climate policy costs, the projections have yet to pass a proper reality check, if judged by the evolving reactions of the Canadians and French people. The frustration with climate policies in Western European societies, led by their unswerving pursuit of climate remedial policies, has started to yield results with a heavy hangover of taxpayers facing rising bills against a deteriorating news background.

 

President Macron not only gave up plans to impose a carbon tax, but was forced to redeem himself with generous promises to the protesters to regain baseline command. His climate change record so far is poor and non-inspiring. His claim on climate change leadership has been seriously compromised by the speed and character of unfolding events as the yellow vests started marching on the streets of Paris. The French president assumed he had a voters’ mandate to implement a crash course in global climate change policy in order to save mankind, yet it proved to be his wishful delusional interpretation of the election results.

 

Canadian PM Trudeau, in his turn, changed the approach by rebranding his pro-tax campaign, and instead of a price for carbon emissions, he has been recently talking about a price for pollution, in a broad sense. This policy innovation will cross the Atlantic as the pursuit of remote and largely abstract climate goals can hardly substitute the practical immediate case of a polluted environment.

 

In the climate change context, a shift to a pollution tax would occur while the objective remains the same – tax-generated revenues accumulated into the budget, capable of funding the extravagancies of global climate policies with pre-designated winners.

 

The key revelation when selling these new repackaged climate policies is the poor cost benefit record, as spending exorbitant funds and taxing everyone to contain the global human impact reflects an extensive institutional and corporate tailored macro approach, while ignoring a more efficient and targeted preventive therapy at the individual footprint level. Indiscriminate taxation lacks the persuasive power of a personalized, impact weighted penalty-reward model.

 

People are refusing to reason with abstract global climate change logic conditional upon new taxes, especially when they are charged on basic and essential goods and services – heating, transport and food. The buzz word for winning hearts and minds on environmental policy change relates to proving a neutral to positive effect on the standard of living, potentially sparing shocks and spreading hardship over longer time periods. When it comes to heating and electricity bills, including transport costs, with tax collection overlapping with seasonal peak energy payments, the impact on disposable income is critical and uneven, leading to impulsive denial, damping chances for public reconciliation.

 

Among pro-climate policymakers there is a visible shift in addressing climate change issues during election campaigns, seeking to avoid direct confrontation with the cost of carbon taxes and the strict adherence to “mandatory” eco-targets following the Paris Climate Accords. In the face of public rebuttals, following events in Canada and France, policy makers turn to a more tolerant, more pragmatic approach. Some dare to challenge the virtues of the cap and trade policies in achieving climate policy objectives. The only truly global climate exchange operating, the one in the EU, has failed to balance between means and ends in climate policies.

 

In fact, all other emissions quota trading platforms, are either under- or non-performing, a far cry from expected traded volumes and impact. The United States closed down its climate bourse eight years ago.

 

Opinion polls in Canada and the United States consistently confirm that that two out of three polled are against any additional tax burdens to meet carbon targets. Things are not much different in Europe, but such sociology is purposefully withheld from the general public. Instead, climate panic stories flood the media news streams, garnished with the mantra that Europe must at all costs remain a global leader in addressing climate change.

 

The growing pain and higher costs have a sobering up effect, as a greater number of people realize that we should not throw good money after bad and should confine our climate change aspiration to our resources. Any policy enforced upon people, demanding a sacrifice that directly or indirectly affects their standard of living, ultimately leading to higher taxation, is doomed – regardless of the catastrophic scenarios and Armageddon talk.

 

Few will buy with circumstantial evidence that hardship today will be compensated over time with higher quality of life in an unspecified future.

 

The only sensible environmental protection policies, including climate change remedial action, should be tailored to fit human scale and reflect coordinates of the immediate environment – street, neighborhood, city, country, where individuals and groups can make the difference by sharing dedication, time and resources in influencing and controlling their footprint.

 

A walk around Sofia would prove that in spite of achieving, at least in part, country goals for renewables in final energy consumption, the perception of a cleaner city and higher quality air and water is evasive. Success in turning the course in global climatic processes is still and will remain superfluous, difficult to measure, while cleaning and bettering the immediate environment is a clearly recognizable fact. In many aspects, climate change aloofness is reminiscent of the neo-marxist and early Soviet pathos when people were told to fight for global peace, while ignoring violence and abuse of human rights next door.

 

Without sound economic logic and an adequate business plan, climate policies are doomed, regardless of the number of alarmist reports by scientists and economists. Success hangs on a thin thread until the moment someone dares to ask why and how much, and he is not convinced that it is worth it.

 

By Ilian Vassilev

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