Feasta Board Chair Mike Sandler participated on a panel at the BIG Conference sponsored by the U.S. Basic Income Guarantee (USBIG) at the Fort Mason Center for Arts & Culture in San Francisco, California on Tuesday July 23, 2024.
The Panel included several disparate ideas for funding basic income, with the working title: “New Funding Streams: Cannabis Tax, Corporate Tax, Carbon Dividends, The Commons.” Advocating for carbon dividends, Mike was joined by Peter Barnes, the author of Who Owns the Sky? (the first carbon dividend proposal), With Liberty and Dividends for All, and Ours: The Case for Universal Property, and Michael Howard, Professor Emeritus of philosophy at the University of Maine, former president of USBIG, and former editor of Basic Income Studies. Professor Howard also co-edited two books on Alaska’s Permanent Fund Dividend.
In the lead up to the conference, the conference organizers asked panelists to consider questions about the viability, adequacy, feasibility, equity, and sustainability of each type of funding source.
Responses from Michael Howard (MH) and Mike Sandler (MS) are as follows:
- VIABILITY: How politically viable is this funding stream?
MH: People have different ideas of what is meant by politically viable. In the short term, much depends on the outcome of elections at all levels. If Trump is elected as President and the Republicans get a majority in the House and Senate then, in the short term, no funding stream for any kind of basic income is politically viable. Some state legislatures are even trying to ban guaranteed income.
But I think, when comparing possible funding streams, we should abstract from the short-term political winds, and ask what is viable assuming an executive and legislative branch that is open to considering guaranteed income and possible funding sources.
By this measure, Carbon dividends are politically viable. A carbon cap and dividend bill had bipartisan support (the Cantwell-Collins CLEAR Act) back in 2009. There are bills in the House and Senate that support carbon fees and dividends with significant Democratic support, such as the Energy Innovation and Carbon Dividend Act.
Carbon pricing alone would meet political resistance, but the dividend creates a significant benefit for 60-80 percent of the population, reversing the regressivity of the carbon price and rendering it politically viable.
The urgency of the climate crisis is another factor contributing to this source of funding for a universal dividend.
And the framing of the dividend as a citizen share of common wealth (our atmosphere) does not face the difficulty of changing the narrative around poverty that policies more explicitly designed to reduce poverty, and targeted to the poor, will face.
MS: I agree with Michael. If it is not politically viable today, then we have to make it politically viable tomorrow. We cannot stand by while the Earth burns (or floods, or you know, all the other stuff). Since 2016, it has been hard to discern what is politically viable, and in fact, my own approach has been to look at the Eastern European dissidents of the mid-20th century: I don’t have hope, I have determination. So, what do we have to do, and can you join us in making it happen? At a more practical short term level: we have a champion in the U.S. Senate, we have an idea that can reach people of all backgrounds, and we have an urgent crisis that gets worse every year. We lack: foundations who want to support this the way they support (what I consider to be) inferior ideas, we lack a glitzy or viral spokesperson, and we lack the type of support from the environmental justice community and even the “mainstream” environmental community that would put dividends ahead of “let’s subsidize solar panels” and “carrots not sticks” (the mindset that the Inflation Reduction Act with carrots will be successful, but carbon pricing, as a stick, is doomed so don’t even try). Ask not what is politically viable, ask what you can do to make it so.
- ADEQUACY: To what extent might this funding stream fully support/cover the cost of a basic income? In other words, how adequate is this funding stream?
MH: Measured against the goal of a subsistence level basic income (say, $12,000 per adult and $6,000 per child annually, or $30,000 for a family of 3), carbon dividends are inadequate. The average annual revenue per person over the first ten years would be between $700 and $2400 (for a family of 3, $2100 to $7200 annually).
However, when combined with revenue from other resources, it is possible to support a combined dividend at about half the subsistence level, and for a family of 3, that would be around $18,000/year. So, if all such resources could be harnessed for dividends, a combined resource dividend would be a robust source of funding, and could complement a guaranteed income from income or wealth taxes in such a way as to achieve a full basic income.
MS: Here are a few links to learn more about common wealth dividends, as my colleague and fellow Feasta Board member Brent Ranalli calls them. He and I were on a virtual panel at the BIG Conference in 2022 discussing these ideas.
Feasta has been promoting land-value taxation and other ways to make use of overlooked common pool resources.
And I have a website Commons Share that looks at capping and sharing water, road use, air travel, and even carbon-intensive foods.
- FEASIBILITY: How challenging is implementation? What are the barriers to successfully carrying out this funding initiative?
MH: This could be done at the state level, as in Alaska. So it is not the sort of policy that needs to wait for a national consensus. There is already carbon pricing, for example New England’s Regional Greenhouse Gas Initiative, and in Canada carbon pricing has been combined with dividends. The policy is straightforward, and only requires legislation. The universality of the dividend makes its distribution relatively easy.
MS: I agree with MH. But let’s consider the possibility that maybe it will not be linear from local to state to national to international. Maybe someone somewhere unexpected will have a breakthrough. At the international level, the UNFCCC is dysfunctional, but there is a group of countries called the Beyond Oil and Gas Alliance (BOGA), led by Denmark and Costa Rica. Feasta has a paper about how we can leverage BOGA to make it like the beginning of a Global Climate Trust that would administer an international Cap & Share program. We also put together some scenarios where Global North and Global South countries join in pairs or groups to allow for a global average dividend throughout the ramp up. At a more local level, in California, ratepayers receive the California Climate Credit on your utility bill. No one knows about it, but it came about using Cap & Trade funds from AB32.
- EQUITY: How does this revenue source measure up to standards of equity?
MH: Without the dividend, carbon (and other resource) taxation and pricing would be inequitable. However using the revenue for dividends renders the policy strongly progressive.
One might object that the policy would be more equitable if it were to use all the revenue as income rebates to, say, the poorest quintile. But such targeted redistribution would seriously weaken the political viability of the policy, and make its implementation more complicated. The Alaska PFD seriously reduces inequality and poverty in Alaska. But had the policy been designed to target the revenue to the poor, it never would have been instituted.
MS: Here is a link to a great paper by Professor Jim Boyce of Mass Amherst, Brent Ranalli, and Michael Ash. In their paper, they discuss major elements of a just and effective climate mitigation policy: 1) Mandating emissions reductions on a schedule. Explicitly protecting vulnerable communities against co-pollutants; 2) Setting ambitious carbon-reduction targets, and issuing dividends; 3) Close loopholes. We need to get better at messaging and solidarity, and get more people from the affected communities to help the frontlines by being on the “frontlines” of carbon dividends.
- SUSTAINABILITY: To what extent can this funding stream be depended upon to continue into the future? How reliable is this source of funding to support a long-term UBI/GI program?
MH: Carbon dividends can be depended upon to continue for a decade or more into the future and dividends will rise regularly with the rising price on carbon emissions. However, as carbon is priced out of the market and replaced by renewable energy, revenue, and dividends, will decline. A long-term UBI/GI program based on resource taxation will need to phase in pricing on other sorts of resources. But if the carbon dividend policy is popular, it can pave the way toward such a transition to a permanent citizens’ dividend.
MS: I can’t wait to have the “problem” that we have solved climate change and now our carbon dividends are decreasing. It means my kids will have a livable planet, upon which to develop new sources for a UBI. There are lots of other resources we can go to, some examples of which are mentioned at commons-share.org.
Featured image: Photo by Annie Spratt on Unsplash
