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A UBI paid for with a carbon tax would both save us from the worst consequences of global warming and stimulate the economy. It's hard to find a rational excuse

• ChrisLomont 6y ago
  Most estimates on a carbon tax raise at best $200B a year in the US. For the ~150M adults, that would be a UBI of about $100 a month. Not much of a UBI. It’s also paid by the same people as explained elsewhere in this thread. Tell me again how this works?
  • jusssi 6y ago
    Doesn't the state already provide the basic living necessities for anyone who demands it? And somehow it's possible to pay for it already?
    • ChrisLomont 6y ago
      UBI proponents don't think the state provides basic living necessities. Personally I prefer targeted assistance instead of the ham-handed approach of UBI since targeted assistance better allocates limited resources.
• hcurtiss 6y ago
  I haven't listened to those lately, but I don't recall them calling for a UBI. Didn't they redistribute it back to the carbon taxpayers?
  • alex_young 6y ago
    Yeah, the carbon tax is just equally distributed back to everyone. Just like UBI.
    • hcurtiss 6y ago
      As I recall, if you paid more carbon tax you got more back. That is not, I think, how UBI is supposed to work (e.g., those paying more taxes don't get a higher UBI).
      • alex_young 6y ago
        If you received a refund in the same ballpark as you were taxed there would be no point to it right?
      • Ericson2314 6y ago
        I really hope you recall incorrectly, because that indeed makes 0 sense except as the result of a farcical political system.
      • skosch 6y ago
        Everyone gets back the same amount. You can't even know how much carbon tax you paid, because it's levied at the source. It's a redistribution scheme at the expense of polluters.
• mulmen 6y ago
  What happens if it works? Surely UBI funding should not be linked to a crisis?
• jariel 6y ago
  "It's hard to find a rational excuse for not doing it." Just the opposite, it's hard to find any rationality for doing it at all. If a 'carbon tax' is really just going towards reducing carbon, but not going into R&D for carbon reducing technologies, then it's probably just as efficient to simply limit carbon use in a variety of areas. Taking vast amounts of money from businesses is an indirect way to stimulate R&D on such things. The simultaneous effect of severely limiting productivity, with a gigantic wealth transfer to those at the lower end of the economic spectrum, would be a 'double inflation whammy'. A more extreme version would be: "No more cars or busses, and by the way, we're now going to grab your wealth and transfer it over to those people over there" It's best to consider them as separate activities. Solve the climate problem with effective technology and regulation, solve inequality by getting people into the workplace and by helping to more evenly distribute surpluses. In particular, low interest rates are causing massive inequality in wealth due to home appreciation, which is absurd.
• TimJRobinson 6y ago
  OP here - I love this idea! I also think most environmental problems can be solved with a tax on the product doing the damage, that pays for the cost of undoing the damage.
• Aerroon 6y ago
  I don't see how this would really work. A carbon tax in an ideal situation is just a consumption tax. This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. If we want this carbon tax to offset our greenhouse emissions then that means it will necessarily disproportionately impact poor people. And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI. In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.
  • haram_masala 6y ago
    Could a carbon tax also be assessed against capital gains that benefit from carbon emission? That might address the inherent inequality you mention.
    • Aerroon 6y ago
      I'm unsure how you would go about doing that. You would somehow have to be able to assess the carbon emissions of every company. This gets quite difficult, because you have to start answering questions such as "do we count the carbon emissions of the individual employees?" It might seem like a silly question, but this could have an impact on which types of businesses people invest in. It would probably just be easier to have a general carbon tax that gets paid back to people. Then separately you could have a UBI paid for by capital gains taxes or something along those lines. But somebody else probably knows more about this.
      • guerrilla 6y ago
        Do they not already have to report emissions?
        • bradlys 6y ago
          I work for a fintech startup. I'd be very surprised if we had to report emissions. Yet, we are definitely a method for the rich to get richer through investments. And we currently benefit from a particular kind of carbon footprint - somewhat indirectly.
• nbardy 6y ago
  > It seems like there are too many entrenched players to make this a reality unfortunately. Wrong we have the internet, ideas and people can become popular in a matter of days. Grassroots movements have a lot of potential
• petermcneeley 6y ago
  Carbon taxes tend to be regressive. Using a regressive tax to fund "ubi" sounds cunningly evil. Are you familiar with the yellow jacket protests in France?
  • sroussey 6y ago
    Include carbon production as well. Look at the UBI that Alaska has in place.
  • smallnamespace 6y ago
    Since any UBI schedule can be adjusted to be more or less progressive, you simply sum the impact of carbon tax + UBI as a package and tweak until you get the desired net result. By the way, this is already a very standard analysis that economists do, and the Congressional Budget Office (CBO) is well-funded, non-partisan, and is probably the best institution in the world for doing this sort of work. Obamacare, the Trump tax cuts, tweaks to Social Security, all these proposals get evaluated over a long time frame by the CBO and the results are public (for example https://www.cbo.gov/publication/45447 https://www.cbo.gov/publication/45447).
    • deleted 6y ago
      [deleted]
  • Ericson2314 6y ago
    Using a regressive tax to fund a UBI makes it....not regressive. What's evil is the rich people distorting this plain mathematics. Was the French gas tax redistributed such that below x (where x > 50%) percentile consumers would come out ahead? The Canadian carbon dividend is the ideal example.
  • skosch 6y ago
    Not if you make it revenue neutral – HR763 is basically a mini-UBI funded by carbon taxes: https://citizensclimatelobby.org/energy-innovation-and-carbon-dividend-act/ https://citizensclimatelobby.org/energy-innovation-and-carbo...
• kortilla 6y ago
  > It's hard to find a rational excuse for not doing it. Well the numbers being off by an order of magnitude is a good reason. The US tax revenue would have to double just to pay for anything that resembles UBI. The carbon tax would have to be obscene to gather that amount of money (another $25k in taxes on a middle class US family). Even if people survive the initial shock, the rapid drop in demand for anything with a carbon tax now means that UBI has a budget shortfall and has to be cut. It’s horrendously stupid to tie something we want to be dependable (UBI) to revenue from taxation on things we want to stop.
  • superkuh 6y ago
    The majority of the M0 money supply, that bit of currency we use to get things done in our economy, is created by fiat at any of the ~4500 commercial banks (in the USA). Every time they give out a loan they create the money out of thin air as debt on their balance sheets. They are only required to have a tiny fraction of the money they 'loan'/create (fractional reserve). If instead of letting only these banks create money, if the new M0 money supply was distributed to ~300 million human people instead of ~4500 corporate people, there'd be plenty for basic income. It'd be universal basic income then instead of commercial bank basic income. And banks could just be banks and get by on their actual services instead of being money machines. ... and that's not even acknowledging what the NY Fed have begun doing since October of last year, 10s to 100s of billions a week swapped for worthless items from corporations who can't pay their bills in Reverse Repo operations: a shallow attempt to pretend it isn't just giving money away (https://apps.newyorkfed.org/en/markets/autorates/temp https://apps.newyorkfed.org/en/markets/autorates/temp).
    • thinkloop 6y ago
      Whether you fund UBI through printing or not is unrelated to the function of banks. Society still needs to divert extra cash to people who are extra productive with ideas and businesses. But how do you know how much extra money to give to whom? You make a dedicated layer in society who's sole function and incentive structure is to distribute that money to those most likely to use it best and name it "banks".
• TheSpiceIsLife 6y ago
  > A UBI paid for with a carbon tax This can’t work for one very obvious reason: The incentive is supposed to be to reduce carbon emissions, but a UBI funded by carbon emissions has the opposite incentive.
  • gigaftp 6y ago
    As long as the UBI payout is not tied to the total carbon tax income I don't see how it messes with the incentives.
  • jnwatson 6y ago
    Taxes on casinos incentivizes gambling?
    • dannyw 6y ago
      Taxes on casinos directly funding the gambling regulatory board.
• ahdeanz 6y ago
  The UBI Center has a lot of good information about how tax revenue could be raised to pay for UBI: https://www.ubicenter.org/ https://www.ubicenter.org/ It's interesting to see more and more rigorous analysis of UBI enter the discussion.
• ardit33 6y ago
  A carbon tax is essentially a sales tax... for high carbon products. i.e. polluting cars, red meat, airplane travel, etc... etc... The problem with 'sales tax' is that are regressive. You are essentially taxing the millionaire and the homeless guy with the same rate.
  • Ericson2314 6y ago
    That why you pay people right back! Then it's not regressive. How are people failing to understand this....
    • ngokevin 6y ago
      Yeah, it's crazy, I feel like it's been some kind of pre-programmed talking point. Say with a 10% VAT, even if you eat all of that in sales tax (which you won't, companies will eat it too), you'd have to spend 120K+ a year to offset, say, $1K/month UBI.
      • malkuth23 6y ago
        Not to mention that many variations of UBI proposals specifically exempt the kind of purchases most lower income people make most often. You can easily exempt normal groceries, clothing under a certain value, rent or utilities under a set value and many other essential items. UBI can be easily shaped to target luxury purchases.
  • tornato7 6y ago
    But the billionaire probably buys a lot more stuff... And if he doesn't, that's a good thing.
    • lliamander 6y ago
      Their increase in consumption is not proportional to their increase in net worth.
• kovek 6y ago
  My intuition is that a carbon tax should fund energy research. That way we can stop using carbon emitting energy sources.
• megameter 6y ago
  Henry George had it right: Use land value tax to fund UBI. Abracadabra, all the birds get killed with one stone: Real estate prices calm down, income inequality calms down, environmental costs are valued into use, and poverty is eliminated.
  • monadic2 6y ago
    Or, just abolish any ownership of property except demonstrated by active personal (or organizational) use. We could have been planning cities decades ago and avoided the current real estate hellscape.
    • ethanbond 6y ago
      Or don’t do any of that, create a ridiculously simple tax (LVT) that has no dead weight loss, incurs no inefficiency, distorts no prices, reduces no ones freedoms, has no additional overhead (these values are already assessed/taxed in many places), and get all the same benefits.
      • monadic2 6y ago
        Sure but then you have to deal with a real estate market resulting in irrational collective decision making. Also, by all observation, the market is restricting the freedom of people to live under a roof in their own city.
        • ethanbond 6y ago
          This system creates no collective decision making nor does it restrict any freedoms. If you believe that it does, you should look further into the LVT proposal.
  • refurb 6y ago
    So grandma who lives on a lot with a single family home gets a $50,000 annual tax bill to incentivize the building of a 400 unit apartment building?
• EGreg 6y ago
  Tell your reps to vote for it https://en.m.wikipedia.org/wiki/Carbon_fee_and_dividend https://en.m.wikipedia.org/wiki/Carbon_fee_and_dividend
• monadic2 6y ago
  The only way a UBI makes sense in terms of increasing equity in society is either a) printing the money to intentionally induce inflation, which american economic common sense seems allergic to, or b) reclaiming the wealth from the wealthy directly, which seems unlikely to be effective in the near future. I certainly don’t want to put the idea of carbon neutrality and solving wealth inequality at odds, that doesn’t make any sense.
• lysium 6y ago
  To me, a carbon tax sounds like it’s ok to piss into the pool as long as you pay for it. Nobody’s using the money to clean the pool, though. Sure, some will try to piss less, but I doubt you’d like to swim in it. For me, that’s the rational excuse to not rely on carbon tax. Instead, make everybody use the toilet.
  • _vertigo 6y ago
    Maybe if you explained your metaphor a bit more it would make sense to me - as it stands I'm not really sure what you're trying to say.
    • lysium 6y ago
      I think we should /not/ emit CO2, instead of (just) taxing it, just as I think you'd prefer a clean pool over a dirty pool plus some money. Yes, taxed CO2 will make things better, but I don't think it will make things good enough, as the CO2 stays in the atmosphere.
  • jaakl 6y ago
    We dont have toilets. So pissing less to the pool is basically best we can do.
    • danw1979 6y ago
      Ignoring the other flaws in the piss/CO2 analogy for a second: I think “using the toilet” here is supposed to mean switching to EVs, renewables, etc.
• centimeter 6y ago
  > It's hard to find a rational excuse for not doing it. Unless you’re economically literate. Here’s a tip: if you unironically use the phrase “stimulate the economy”, your economic theory is garbage with zero predictive power.
• john_moscow 6y ago
  You tax something you want to reduce. Since carbon emissions are associated with most travel and great-tasting food, it sounds like paying people to sit at home, watch TV and drink themselves into depression.
  • elvinn 6y ago
    and + not to breathe lol
  • Semaphor 6y ago
    > Since carbon emissions are associated with […] great-tasting food I feel like that requires some explanation. I’d say emissions are higher for cheap products, especially food.
    • monadic2 6y ago
      Err are you neglecting beef?
      • Semaphor 6y ago
        At least where I am (Germany), the cheapest beef is from further away and the local beef is more expensive.
        • monadic2 6y ago
          Sure, but presumably they’re both more expensive than fresh produce, which has a fraction of the carbon emissions. Furthermore I really doubt that the carbon emissions of transportation dominate the carbon output of beef production, so the local vs imported beef cost seems irrelevant to the overall correlation of price and carbon output.
  • tomp 6y ago
    This is a nasty false dichotomy and you should be ashamed of it!
  • 6y ago
• ineedasername 6y ago
  I don't see how a carbon tax on its own solves any environmental issue. By itself it just means it costs more to buy things without changing how they are actually produced & that production's environmental impact. A carbon tax might be used for remediation after the fact, which isn't as effective, but such remediation funding would leave little room to fund UBI. If you want the costs of products to "bake in" environmental costs, it needs to be done at the production stage. Producers need to either spend more money on reducing emissions or more money on remediating their environmental impact, or both, which raises product prices instead of very indirect tax. Trying to do it as a carbon tax doesn't offer producers any reason to change.
  • philwelch 6y ago
    People respond to incentives. People don’t like to pay taxes and if they can save money by spending $10 to save $15 in taxes, they will. That’s the point. Let’s say I own a power plant and I sell electricity to the power company for $X/kilowatt-hour. It turns out the best way for me to make a profit is to burn natural gas in my power plant because I make enough money per kilowatt-hour to afford fuel, and the economics of natural gas outperform nuclear and renewables. I can use renewables during the day well enough, but I’m not gonna buy a ton of batteries to store solar power to sell overnight when I can just burn natural gas instead. As soon as I have to pay a carbon tax for burning natural gas, my incentives change. Do I build a nuclear plant? Batteries? A carbon capture system to plug into my existing natural gas plant? Or do I keep paying the carbon tax? If the carbon tax is high enough, I will absolutely change my system to save money. The same is true if I own a trucking company: I might buy more fuel efficient trucks, which helps a little, or maybe I become an early adopter of electric trucks, which helps a lot. Most importantly, those grandstanding nincompoops in DC don’t have to figure out how to reduce carbon emissions. They just put a price on it, and all of a sudden every cold-blooded, cost-cutting bean counter in the country starts doing it for them. There are lots of ways to do things carbon-neutral these days. The technology exists, or is very close to existing, to maintain our exact standard of living except carbon neutral. There’s just no reason to do so in terms of cost-efficacy because the downsides of carbon emissions aren’t priced in. A carbon tax changes that and provides a very real return on investment for change.
• laingc 6y ago
  One of my best friends is an academic economist working in this space, so while I won’t pretend to be an expert, I have spent a goodly amount of time discussing this with one. With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy. Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point. It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.
  • antris 6y ago
    Quite bold statements there without linking to any sources. "I won’t pretend to be an expert" Yeah, you definitely shouldn't. Also, you are missing the target on the parent comments argument. The carbon tax wouldn't affect the poor as much because the UBI is there to compensate for it, that's kind of the whole point. There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.
    • mjburgess 6y ago
      1000 USD / mo / pp for the US is 12k/yr * 300m ie., c. 4 Trillion USD / yr or c. 20% of GDP (20 T) The total amount taxed in the US is already at that level (4T). For the carbon tax to raise 20% of GDP, it would need to raise as much as all present taxes do (income, sales, etc.). Levying that much on consumption (ie., obtaining the present total amount of tax merely from products people buy) would raise prices catastrophically.
      • antris 6y ago
• snowwrestler 6y ago
  The basic problem with funding a universal income with a carbon tax is that the graphs are pointing in the opposite directions. Population is going up, and inflation is carefully managed to be persistently slightly positive, so you'll need to grow the nominal size of the UBI fund every year. But taxing carbon emissions will result in decreasing carbon emissions; in fact, this is the entire purpose of taxing it! So your revenue from taxes will go down as your outlays go up. Philosophically, a universal basic income is intended to be a "forever" government program, like Social Security or Medicare. In contrast, we hope to bring our carbon emissions down dramatically and keep them down. Funding a forever program with a revenue source we hope goes away does not seem like good long-term planning to me.
• mgoetzke 6y ago
  I am not a fan of using a Tax of something bad to fund something we want to have. The Tax should be directly related to cleanup efforts of the Bad thing™, otherwise you get a dependency where the Bad Thing™ is required to keep up funding.
• Aunche 6y ago
  The Planet Money episode is about a revenue neutral carbon tax. UBI funded carbon tax doesn't make any sense to tie those 2 things together. Carbon emissions would decrease with a carbon tax, but the amount of revenue needed for UBI would stay roughly the same. This means we would need to tax carbon even more. This would create a feedback loop where energy is prices explode uncontrollably. Basically, if you live in Alaska and need to heat your house and drive a truck, you're basically screwed.
• philwelch 6y ago
  Carbon tax isn’t a sustainable source of revenue. The whole point of a carbon tax is to reach carbon neutral, at which point there’s no carbon tax revenue.
• fsloth 6y ago
  Disagree strongly that you should combine UBI and carbon tax to same policy framework. Carbon tax needs to function globally. An UBI scheme will be - for the foreseeable future - a local policy enacted within the borders of a sovereign political entity. The economic actions of every human being must somehow be encompassed in the carbon tax scheme. UBI on the other hand, is about how local governments wish to split and spread the dole. Were you to combine these two into one, it would mean massive capital flows from the rich countries to the poor. It did not work well in the scope of development aid. You could say development aid has only made third world poorer. If you could give this "global UBI" to people personally it might work better - stimulating local markets and entrepreneurs. Because everybody likes to get rich, and once you have UBI-loaded consumers everywhere, suddenly it makes more sense to offer services and products that were economically untenable before. So if you could in some non-dystopian scifi future give direct UBI payments to people personally, then maybe this would make sense. But while we are seemingly moving towards a world with unconstrained financial services for everyone, we are not there yet! And we need carbon tax yesterday! How are we not there yet? Well, according to the Economist, for example only half of the people in Latin America have a bank account. We can imagine that we can leapfrog to a future where everyone has a bank account through mobile banking services, but - not there yet!
• amelius 6y ago
  > A UBI paid for with a carbon tax I feel like this conflates two issues, and politics should be conducted in all the clarity it can get. Also a carbon tax should probably be used to support the planet, e.g. sustainability projects.
• mac01021 6y ago
  It's called a "carbon fee & dividend" and an increasing number of people are advocating it. (https://clcouncil.org/economists-statement/ https://clcouncil.org/economists-statement/) It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too. And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you. But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact. Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends. This page (https://citizensclimatelobby.org/household-impact-study/ https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288. Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_Dividend_Act_of_2019 https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment.
• op00to 6y ago
  UBI makes things slightly more expensive for the people who are comfortable and comparatively rich. So, sorry poors, you’re on your own!!
• ip26 6y ago
  It's hard to find a rational excuse for not doing it. Aside from we haven't figured out how to actually pass a carbon tax despite, what, twenty years of trying. I used to be enamoured with the idea, but now I'm growing to believe it's a distraction and a waste of time & effort that just isn't going to happen in any meaningful timeframe. There are other ways to skin this cat, and the ones we stand a prayer of implementing are the ones we need to focus on.