Genuine climate justice means thinking big when it comes to economic inequality. A 'carbon fee and dividend' would reduce emissions and poverty.
Extinction Rebellion (XR) is demanding that the UK reduce carbon emissions to net zero by 2025. This is reasonable, but if we're going to get there so quickly we need to be talking right now about how we can achieve this. XR is perhaps wise to avoid making detailed proposals – any specifics risk splitting the movement over the fine detail. Better to leave it to their third demand - a Citizen’s Assembly.
Drastic reductions in fossil fuel use are, to many, a frightening prospect. Jacob Rees-Mogg suggests that XR want to take us back to living in caves; others indicate that taxing carbon is dangerous – it was the catalyst for the Gilets Jaunes protests in France.
Fee and dividend
There is no doubt that carbon neutrality will entail significant adjustments to our ways of living, but there could be a major silver lining. One key mechanism on the table - Carbon Fee and Dividend - could drastically cut emissions while creating positive social impacts. It is being seriously considered in Ireland and Canada, and is supported by the Citizen’s Climate Lobby in the USA. A statement published in the Wall Street Journal in January 2019 calling for a carbon tax and dividend (another name for the same idea) has been signed by 3,000 American economists.
The basics of Fee and Dividend are simple. Carbon extraction becomes chargeable, and the money raised is returned to the population as a cash grant or regular basic income. Some schemes propose using a carbon cap alongside the fee, so that total emissions can be directly controlled without relying on price rises to curtail demand.
There remains, however, a major fly in the ointment if this process happens only at the national level. Applying carbon fees on a country by country basis would require border checks on all fossil fuels, to assess the level of carbon fee that has been paid in the fuel's country of origin and to charge an appropriate 'Border Carbon Adjustment' to ensure the fee is brought to the same level as that paid in the importing country.
This becomes even more complex when applied to goods like steel and fertilisers that require heavy fossil fuel use in their production, and it could stray into the absurd if attempting to account for the embodied carbon content of all imports. A whole new professional field of carbon accountancy would be required, as we attempt to calculate the footprint of every imported good, from petrol and cement, to Colombian roses and Kenyan green beans. Carbon fee avoidance schemes and 'carbon havens' may even arise, in a sad 21st century mirroring of today's tax havens.
Finally, and disastrously, the carbon dividend money would end up in the countries that extract and import the most fossil fuels. These high-polluting nations and citizens are the ones that least need or deserve these revenues. Such a scheme would create perverse incentives for people to continue polluting, as doing so would boost basic income payments.
Climate change is a global problem and it requires a global response. A far simpler and more globally just solution would be to apply the Carbon Fee and Dividend system at the global level, so carbon can be both capped and taxed at source, and the dividends distributed fairly to people worldwide.
This has the unusual merit of being relatively easy to enforce. Just 100 companies produce 71 percent of all carbon extracted. A scheme could be introduced immediately, whereby these companies are required to buy a licence for every tonne of carbon they produce. For this to be achieved it would need the leadership of just two countries, the USA and the UK, as this is where the majority of fossil fuel firms are registered. Convincing the Russians and others to get on board may be tricky at first, but international pressure and trade sanctions could be ramped up to make any exceptions difficult to sustain.
The enormous sums of money that would be raised by a carbon fee should be given back to the all the world's people as a dividend. Rather than benefiting people in polluting countries, those with a low carbon footprint - the poor - would benefit the most.
To make the scheme successful, we must charge the right price for carbon. The IMF recently concluded that to keep global temperature rises to 2°C we would need to implement a carbon price of at least $70 per tonne. This compares to the average $2 per tonne carbon price that is charged in current emissions-trading schemes according to the IMF.
A 2°C temperature rise is still much too high if we are to contain the worst extremes of climate change, so a strict cap and probably a higher carbon price will be necessary. Nevertheless, for now we will base our calculations on the IMF recommendation. If we assume the carbon cap starts at this level then decreases by 15 percent (of today's output) every year for five years, this would bring us to 25 percent of today's carbon emissions by 2025.
Let's assume we raise the carbon price by 15 percent of the original each year, starting at the IMF recommendation of $70. This scheme would raise $2.5 trillion in the first year which is enough for $28 a month in basic income for every woman, man and child on the planet. Over five years the reduction in carbon extraction mandated by the cap gradually reduces the dividend to $12.25.
Transfers at this level seem small to people in richer countries. Those lucky enough to find this amount underwhelming could either not apply to receive it, or could see it as a small compensation for the changes in lifestyle they will have to undergo as part of the transition to a low carbon economy. This might include retraining or driving less, though living in a cave will, happily, not be required. The dividend could help to neutralise the sense of grievance that generated the Gilets Jaunes protests.
Most people in the Global South would find a dividend at this level transformative. Considering that it would be received by every member of a family including children, this would be a significant income boost that would end the worst extremes of poverty and open up new life opportunities. Most importantly, it would give us all a fair share in the revenues from our global commons.
Although the fee would rise as the cap reduces, the scheme inevitably raises far less money for a carbon dividend once the cap begins to bite. It could even reduce to zero if we end all carbon extraction. What happens then to the monthly dividends we have all been enjoying? At this point, we have a choice. We can allow them to fade out, and remember them as a brief but helpful boost for global equality. Alternatively we could expand the scheme to incorporate new revenue streams deriving from the global commons, and turn it into a true world basic income.
There are plenty of global common spaces as well as our atmosphere - such as the oceans, international airspace, and the satellite zone. Other spaces, such as the land and mineral beds, were once commons and we could choose to treat them as such for taxation purposes.
Profitable use of these common spaces and resources could be made chargeable, thereby generating rents for the people that could be distributed as world basic income. These spaces would benefit from the protection that use-taxes would bring, just as the atmosphere would be improved through the Carbon Fee.
Through this scheme, private land ownership, aviation, shipping and deep sea mining could all be taxed. Radio frequencies (used for GPS, TV and many other uses beyond radio programming) and satellite space could be rented out on behalf of the world's people rather than given to corporations for free. The data we all generate that has enriched Google, Facebook, Amazon and Apple could be taxed, with money added to the collective pot.
Financial transactions (which are profitable thanks only to our common monetary system) and intellectual property (which is generated through use of historic common knowledge) could also provide a rich source of revenues. Significant historical wealth could be returned to the people in common rather than retained through inheritance.
In these ways, and even without the carbon dividend, we could easily set up revenue streams that would generate $50 a month for every person worldwide. In time, as more commons resources are covered, this could rise to several hundred dollars a month.
These proposals are radical, but we live in incredible times.
The risk of catastrophic climate change forces us to think big. If we are to achieve climate justice, rather than just climate action, we need responses that consider and respond to economic inequalities.
The Carbon Fee and Dividend is one such response, that has the astonishing potential to drive us briskly towards net zero while temporarily ending extreme poverty. By establishing the principle that the earth is a global commons, the Carbon Fee and Dividend would also lay the groundwork for a wider transformation in our thinking. As its economic benefits dry up, we could use its infrastructure and the shift in thinking to kickstart a worldwide basic income that would give us all a fair share of common wealth in perpetuity.
In this way, Carbon Fee and Dividend represents a practical solution to our most pressing human problems. It could transform our current crisis into an opportunity to embrace our common heritage and march forward towards real global justice.
World Basic Income's Laura Bannister interviewed Sarath Davala, head of the India Network for Basic Income, at the Nordic Basic Income Conference in Oslo, April 2019.
India's journey towards basic income
I'm a sociologist. Twenty years ago I was teaching at a business school, but I wanted to work in rural areas, so I got to know SEWA [the Self Employed Women's Association, a major trade union and grassroots organiser in India] and I started working for them part-time. My PhD was on trade unions, and a business school is the last place for that! SEWA had been working on many kinds of social security projects, and they asked me would I like to head the [Madhya Pradesh basic income pilot] project with Guy Standing as principle investigator.
We got into the study, and spent a lot of time in the villages and we collected around a hundred stories, finding out what is going on within families. I was myself sceptical in the beginning about giving unconditional money, but as it turned out it produced dramatic results. Before that, I always used to come back from my work in the villages feeling very empty, thinking 'all this is not working'. NGO interventions can be ineffective, and NGOs get busy after a time with trying to sustain themselves. But the basic income – it worked!
Many people from the project started volunteering their time to drive forward basic income. We formed a network and began making presentations to the government. But 2014 was a real setback. We had been working with the Congress Party for years at every level, but then they got swept out, and Modhi came in. There was no chance there. The new government was busy with something else. But India is a big country so we were talking and writing everywhere still.
People like to learn not from their own country but always from others. Despite the major pilot in Madhya Pradesh, it was the Swiss referendum that got Indian politicians interested. Every year, the parliament present an economic survey giving an account of the past year and projections for the future. In 2017, The Chief Economic Adviser wrote a whole chapter on basic income, saying this could possibly be a way forward. For him I think it was a question of governance rather than social justice. In India we have documentary evidence, the government has said that for one rupee of welfare given they are spending another three on delivery. So you are spending four rupees and getting only one rupee to people that need it. So their interest is in stopping the in-kind transfers, and doing it instead as basic income. That efficiency is the driving force of this idea at the moment – wider ideas about social justice and the commons will likely follow later. Some amount of discussion happened and we organised a national conference around that in 2017.
In Telangana, the state where I live, the government introduced a very interesting scheme for farmers in April 2018. Of course, the struggles of farmers is a national issue. Farmers were on the street, having demonstrations. So the state government introduced a scheme titled 'Friend of Farmer' which involved an unconditional cash transfer of roughly $100 a year for two years. It went to all farmers, rich or poor. And everyone started realising 'wow, there's really something in this'.
Then in view of the 2019 elections more discussion happened and we talked to more people. Interest in basic income was really starting to build up.
A basic income in Sikkim state
The ruling party in Sikkim state announced proposals for a state-wide universal basic income. We went to see them the next day. They have not announced an amount, they want to do studies, create the background infrastructure. The detail is now being filled in.
They will fund it with money from hydro power, but also possibly by applying a small tax on tourism, as many European countries do, like charging residents in hotels a small amount, or on arrival at airports. Even charging 1000 Rupees, it's like 12 Euros, it's not a big amount for a tourist. These funding sources are not talked about in terms of 'the commons'. They just see hydro and tourism as a sustainable source of money.
There is a question about using hydro, the related carbon emissions and the sustainability of the planet. And eventually we should ask those questions, but not now. If you ask those questions now, you could be stopping something quite incredible. I think those questions have to be tackled in the medium term. And Sikkim state would be doing hydro power anyway, whether or not it's used to fund basic income.
A basic income across India - the Congress Party's proposal
The Congress Party, the lead opposition party at the national level, then announced their own plans for basic income. They said universal basic income would not be possible, we have to target – they have chosen to target the 20 per cent of people who are below the poverty line.
How we are going to target, how we are going to select is the big issue. Scholars are sitting down and working out how we are going to do this. Maybe we should use exclusion criteria rather than inclusion criteria. There's also recent national survey data. Any targetting is basically arbitrary. There's discussions happening around this to find a workable plan.
Now that they have announced basic income, it's really appealing to everybody. Twenty per cent is a big amount of people! And they all vote. The idea has penetrated into the local media, they are explaining what it is, local television channels are talking about it, it really is a big big issue.
There is still disbelief. Basic income is something that people cannot comprehend, because it's never happened yet. But because the farmers' programme has happened, people are thinking 'that was unconditional, maybe this can happen too'.
We didn't expect any of this. We just kept going, kept going, kept going. There's been a tipping point, and now everyone is talking about it.
The results of the 2019 general election in India, and the election of the state government in Sikkim, are expected on 23rd May.
For more information on basic income in India, see https://indiabasicincome.in/
This year has already brought two huge developments in India's drive towards basic income. First the ruling party of Sikkim state, the Sikkim Democratic Front, are including basic income in its manifesto for the 2019 elections, with a plan to implement by 2022. And then the main national opposition party, the Congress party, has promised a 'nationwide minimum income for the poor', starting as soon as May 2019 if they are elected.
India has been leading the way on basic income in recent years. A major pilot experiment in 2011-2013 in Madhya Pradesh demonstrated the potential of basic income to support real quality of life for Indian people. The India Network for Basic Income has built both grassroots and high-level support for basic income, through persistent campaign work. In 2017 a major government report, the Economic Survey, noted that basic income could be 'an alternative to a plethora of state subsidies for poverty alleviation' and calculated that it would cost between 4-5% of GDP. Debates have followed at various levels of government, and public support has been growing.
The latest developments are dependent on electoral success, but with both parties showing strong support at the polls, there is every chance that either Sikkim or the whole of India will be enjoying some form of basic income within the next few years.
The United Nations Secretary-General, António Guterres, has endorsed Universal Basic Income in a speech at the General Assembly.
This follows an in-depth report by the UN Human Rights Council that explored the potential for universal basic income to address extreme poverty and guarantee essential human rights, and discussed the growing movement for worldwide basic income.
Involvement from the UN will likely be needed to facilitate a worldwide basic income, so growing support at this level is extremely exciting. It also popularises the idea of basic income among world leaders and the global population, helping to build the groundswell of demand that will be needed to get world basic income introduced.
In March, World Basic Income joined 40,000 citizen activists from around the world at the World Social Forum 2018 in Salvador, Brazil.
WBI co-hosted three sessions in collaboration with the Brazilian basic income movement:
The sessions were well attended, and provided a much-needed opportunity for country movements to share learning from their campaigns.
Contributors from Brazil explained that a commitment to UBI is actually embedded in their constitution and that Bolsa Familia was introduced as a step towards it. The architect of these policies, former Senator Eduardo Suplicy, who presented at the Brazilian Basic Income meeting, lamented attacks on Bolsa Familia by the current Brazilian government.
Pablo Yanes of the Economic Commission for Latin America outlined the progress of UBI in Mexico, in particular the encouraging support for basic income from a current presidential candidate. Juan Urbina of the Central American Institute for Fiscal Studies outlined the potential impact of UBI in Guatemala and its affordability given the small population.
Paul Harnett of World Basic Income suggested that many world problems were of an international nature, such as climate change, and that taxes to protect our planet should be paid into a fund to provide a basic income for all in the world.
This growing momentum on Basic Income built on the excellent work of the Canadian Basic Income movement at the World Social Forum in Canada in 2016. Basic Income is gaining ground as a realistic policy to address poverty internationally and it is hoped that it will now feature regularly at the World Social Forum, the largest gathering of civil society in the world.
To build awareness of the potential of world basic income to address extreme poverty, the organisation has launched its first explainer video, 'Five steps to a world basic income'.
The video outlines the world basic income proposal and explains how it can be introduced at the global level in five steps.
"Its not easy to imagine how such an immense project could ever become a reality," explains Laura Bannister, one of World Basic Income's directors. "When people hear about the idea they almost always support it, but many struggle to see how it could ever be implemented."
From building awareness to large scale pilots and a phased introduction, the video shows how we can get there.
"Of course, all five steps represent a huge amount of work! No one is saying this is going to be easy. But Step 1 is well underway, and discussions are beginning around Step 2. All big change starts with small steps. This video describes what we might need to do next, to create this world-changing shift towards sharing the wealth."
World Basic Income would like to express their sincere thanks to filmmaker Tom Grimshaw, for his pro bono work to create this video.
The United Nations has spotted the growing movement for worldwide basic income, and has quoted parts of World Basic Income's proposals for funding the scheme in a report of the Human Rights Council's 35th Session.
UN sees economic insecurity as a key human rights issue
The report by the Special Rapporteur on Extreme Poverty and Human Rights stresses the need for the human rights movement to pay attention to economic insecurity, and it explores basic income as a potential solution.
The report is focused on national basic incomes, but it highlights the existence of an emerging movement for a parallel global scheme.
The report reads: "The concept of a basic income on a global scale has attracted little scholarly attention, but at least two organizations, the Global Basic Income Foundation and World Basic Income, are promoting it. According to the latter, a global basic income would be a “global scheme that gathers and redistributes money, in amounts ranging from a few dollars to over $2,000 per month, depending on circumstances”. The long-term goal is redistribution of wealth and natural resources through “collective shareholdings in global companies, international taxes such as a carbon tax or financial transaction tax, royalties on goods like intellectual property or the extraction of natural resources, or fees for the use of shared goods, such as charging airlines a fee for using our shared airspace”. The present report does not seek to examine the feasibility or otherwise of such an approach."
World basic income is on the agenda
The movement to take basic income to the world level is relatively new, so it is very exciting that the United Nations has independently researched it. In order to gain widespread support, the idea itself first needs to spread. The UN has enormous global reach, so concepts and organisations mentioned there can reach decision-makers and communities across the globe. The proposal for worldwide basic income is clearly gathering momentum on the world stage.
A new Ipsos survey of twelve countries showed very significant support for basic income, and in several countries the majority of people believed the government should go ahead and introduce the scheme.
In January 2017, the Belgian organisation Eight began providing a basic income in the village of Busibi, Uganda. They are making a film about the experiment, and the first episode is now available at http://villageone.film/
The film records the people of Busibi talking about their lives and struggles. In Episode 1, residents talk about what they have and what they lack. Besweri explains, “Busibi is a very good island, which is surrounded by a swamp. People produce their own food, they have animals, they have houses but they are only mud-and-water houses, not permanent ones. There is no electricity and no improved water system – they are using hand-dug wells. They are poor, yes, but they are not the poorest among the poor.”
World Basic Income spoke with Alice Krozer of the University of Cambridge, author of the report 'A regional basic income: towards the eradication of extreme poverty in Central America', published by the UN's Economic Commission for Latin America and the Caribbean (ECLAC) in 2010.
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Title photograph by Koustav2007 (Own work), CC-BY-SA-3.0 via Wikimedia Commons