In yesterday's blog, I again criticized a peculiar way of thinking popular among advocates of limiting economic growth that I describe as "magical" or quasi-religious. I've done this before, in a review of Kate Raworth's very interesting but quite "magical" book, as well as in a debate with Jason Hickel. It is time to ask the question: how could one think about climate change in a non-magical way?
I am not original in asking such a question. It's a topic that many researchers are working on who know a lot more about it than I do. But it is also an area where knowledge of the problem of global inequality can provide useful insights.
High global inequality, which otherwise represents a big problem, can in this case be helpful in finding a solution. We know that the richest decile of the world's population (let's call them the "rich") achieves approximately 45-47% of the world's income. We also know that the elasticity of carbon emissions with respect to realized income is approximately 1, which is just a more complicated way of saying that a 10% increase in real income will be followed by a 10% increase in carbon emissions. It follows that the global decile at the top of the income distribution is directly responsible for 45-47% of total carbon emissions. Their share can be calculated with even greater precision thanks to detailed consumption data in hundreds of different categories, with the exact share of each category in total carbon emissions. This would probably show that the contribution of the top decile is even more than half. (Several studies already point to this.)
Our question is thus already simplified. To begin with, we can compile a list of goods and services that (a) produce large carbon emissions and (b) are mostly consumed by the wealthy. We can then organize a coordinated global campaign aimed at reducing the consumption of such goods and services, without limiting it full freedom making economic decisions: therefore, there would be no imposed restrictions on economic development, neither in rich nor in poor countries.
The main burden of adjustment would fall on the shoulders of the rich. And who are the rich in the highest global decile? That's about 450 million people in Western countries, all Western countries in the upper half of the scale; about 30-35 million people in Eastern Europe and South America, accounting for 10% and 5% percent of their total populations; about 160 million people in Asia, that is, 5% of its population; and very few people in Africa.
Limiting consumption can be achieved by rationing or taxation. Both possibilities are technically easy to achieve, but differ from the point of view of political acceptability.
In the case of rationing, physical restrictions are set: x liters of gasoline per car, with a maximum of two cars per family; y kilograms of meat per person; z kilowatts of electricity per household (or organized blackouts). Of course, a black market trading gasoline and meat would soon emerge, but total consumption would remain limited by the number of available coupons. Someone will say that such rationing is a rather radical measure, and I will agree. But this has already happened in several countries during wartime, sometimes in peacetime conditions. And it produced results. If we are faced with a disaster of "terminal" proportions, as many claim, we must consider extreme measures.
Another approach is draconian taxation. Instead of physically limiting the amount of goods and services that have reached the list under criteria (a) and (b), we can tax them at extremely high rates. One can always find a tax rate high enough to reduce the consumption of targeted goods and services to an acceptable level. If we believe that climate change requires radical measures, we should use the lessons learned during the pandemic.
I will illustrate it with the example of air transport, an important generator of carbon emissions. Not so long ago, no one in the world would have believed that the volume of air transport could be reduced by 60% in just one year. This is exactly what happened in 2020. How did we handle it? True, there were a lot of problems and complaints. But did the world survive? It is. Have we reorganized our lives so that we travel less, especially not to distant countries, because many countries have closed their borders and thus further narrowed the possibility of travel? Yes. Can we now imagine air transport permanently remaining at a 60% lower level? We can.
If our intentions are serious, with tax rates we can permanently maintain air traffic at the level of 2020. A ticket from New York to London would cost $4.000, not $400. People from rich western countries would travel abroad once every 10 years, not once a year. The experience of 2020 proved that such a life is also possible.
Of course, these measures will cause deep economic upheavals. The problem is not only that the rich and the upper middle class in developed countries (as well as in other parts of the world) would lose a large part of their real income when the prices of services and goods they often use increase 2, 3 or 10 times; it would affect entire sectors of the economy. Let's go back to the travel example. A permanent reduction in the volume of air traffic by 60% would practically halve the number of employees in this sector; Boeing and Airbus will wait years for new orders, and one of these two companies could end up in bankruptcy; the hotel industry will be decimated, more restaurants will close; cities that complained about too many tourists (Barcelona, Venice, Florence, probably even London and New York) will look deserted and empty. The effects will spread in all directions: unemployment will rise, wages will fall, the West will face the biggest drop in real income since the Great Depression.
However, if such policies were systematically implemented for a decade or two, not only would carbon emissions decline (which has already happened in 2020), but our behavior and economy would also adapt to the new state of affairs. People would find jobs in new sectors that are not affected by high taxes and are therefore more profitable. Revenues generated by taxing "undesirable" activities can be used to subsidize "desirable" ones or to retrain workers who have lost their jobs. We may not go by car to visit friends and family every week, but, using the experiences gained during the pandemic, we can socialize through the screen. Non-residential properties can be taxed at rates so high that owners will rush to get rid of them as soon as possible. The state could then buy them at new lower prices, creating something similar to the Paradores project in Spain (a state chain of hotels opened in abandoned monasteries), and the residents of (for example) England would not have to fly every hour to Thailand, but would rest spent in one of the once private luxurious castles in the country.
It's not magical thinking. These are policies that, with a little cooperation between countries, knowledge of the economy and global inequality, and the experience of the pandemic behind us, can be easily implemented. Is there a will to implement such policies? I do not know that. But I'd say that's unlikely. I believe that the majority of the population of rich countries would not be delighted to learn that the measures we have today will be extended indefinitely.
However, if the situation we are in is really critical, if climate change is a pandemic that has no end, if we have learned to live with the pandemic and survive it, why can't we get used to such a state of "new normality"? I don't know what the correct answer is - but I believe that it would be fair for advocates of radical change to openly bring these questions to the public, instead of hiding them behind praises of the "charms" of ascetic life.
(Global inequality; Peščanik.net; translation: Đ. Tomić)
Bonus video:
