In this interview with Fausto Corvino, we discuss the research and findings of his recently published article in Environmental Politics: ‘Equal per capita carbon dividends and the waste objection’.
Congratulations on your recent publication! What is the key argument or finding you would like people to take from your article?
Thank you! The central point I want to make is that none of the normative arguments usually used to justify recycling carbon revenues in the form of Equal Per Capita Carbon Dividends (ECDs) can be used to justify including the rich in this recycling scheme. By the rich, I mean here the top income decile of carbon taxpayers.
More specifically, proponents of ECDs might want to counter the above claim by relying on three of the main normative arguments usually advanced in favour of recycling carbon revenues in the form of carbon dividends that are equal for all, even the rich. The first argument is that the atmosphere belongs to everyone and therefore there is no reason to exclude anyone from either its use or the revenues generated by a market-based mechanism of access to it. In philosophical terms, the argument for equal ownership of the atmosphere can be based either on the view that all natural resources are owned in common by humanity, and therefore everyone can appropriate them as long as they follow certain rules, or on the view that only some resources, such as global common pool resources, belong equally to everyone.
The second argument is that there is no reason why the rich should be excluded from ECDs, since they are net contributors to them through their carbon taxes, while the poor are net beneficiaries. The third argument is purely consequentialist. The climate crisis is getting worse by the day, and the main victims are overwhelmingly the poor. Any ambitious climate policy, such as an effective carbon price, is more likely to be adopted if the rich do not oppose it. If ECDs are a way of winning the loyalty of the rich to carbon tax reform, then they are also in the interests of the poor.
I argue that none of these arguments should lead us to believe that the rich must now be included in the recycling of carbon revenues on an equal basis with others:
- If the atmosphere is a common good of humanity today, it was a common good also in the past. We only need to look at carbon inequality data from 1990 to the present to see that the richest 10%, both within countries and globally, have incurred a debt for overusing the services of the atmosphere relative to other social groups. This makes it illegitimate today to include them in a uniform carbon revenue recycling mechanism such as ECDs.
- The “rich-pay-for-themselves” argument underestimates the fact that climate change is not an inevitable catastrophe for which no one is to blame, but the product of (at least since the 1990s, fully conscious) human choices for which the rich are primarily responsible and the poor the primary victims. It is therefore at least far-fetched to argue that by paying more in carbon taxes today than they would get back in the form of ECDs, the rich are simultaneously subsidising the poor and paying for their own ECDs.
- Even if the rich received ECDs, they would still lose out from a carbon tax reform; ECDs would only mitigate this loss by a tiny percentage. So it might make sense to direct this money to the lower deciles of carbon tax payers to make them more supportive of carbon tax reform.
So what exactly are Equal Per Capita Carbon Dividends, and what is the waste objection?
Equal Per Capita Carbon Dividends are one of the possible uses of carbon tax revenues. The idea is very simple. The government or local authority that administers the carbon tax redistributes the revenue equally to the people who paid the tax. The reasons why many supporters of the carbon tax are also supporters of ECDs are basically twofold.
On the one hand, a carbon tax could be regressive, imposing a greater economic burden on the poor as a percentage of income than on the rich. ECDs reverse this. In most cases, low-income people are expected to receive more in ECDs than they pay in carbon taxes; middle-income people are expected to receive about the same in ECDs as they pay in carbon taxes, and high-income people are expected to pay more in carbon taxes than they receive in ECDs.
On the other hand, a carbon tax could prevent some people from meeting their basic needs. ECDs avoid this. For example, even if a carbon tax made it more expensive for the poorest to continue heating their homes, and they had no ready green alternative to replace gas or fossil fuel-based electricity, they could use ECDs to defend their carbon consumption. With this in mind, one could argue that everyone would then use ECDs to absorb the cost increase induced by the carbon tax, and the tax would have no effect…
No, proponents of ECDs would reply, because ECDs are fixed for the individual, in the sense that how many ECDs you receive does not depend on how much CO2 you consume, whereas the carbon taxes you pay are a direct function of how much CO2 you choose to emit. A rational individual would therefore choose to replace all carbon consumption that is easily substitutable with green consumption, in order to make the difference between ECDs received and carbon taxes paid as favourable as possible.
The waste objection poses a simple challenge to proponents of ECDs. If ECDs seem like a good idea to us because they make an otherwise regressive carbon tax reform progressive, and because they allow poorer people to defend their subsistence consumption even in the face of an ambitious carbon tax, why “waste” carbon dividends by paying them to the rich as well (in whose pockets ECDs make little difference)?
The arguments that you discuss all have different ideas of what the atmosphere is – where did you identify these arguments? In other words, who are the key actors in this debate?
There are at least two different possible philosophical justifications for why the atmosphere is a common good of humanity and why everyone should be included in carbon revenue recycling mechanisms.
On the one hand, libertarianism, in both its Lockean and left version, claims that all resources are owned in common by humanity, including the atmosphere. The two different forms of libertarianism are then distinguished by the means by which individuals, who are assumed to have full property rights over themselves, can legitimately appropriate these resources. For Lockean libertarians, everyone can do this, provided that certain conditions are met – one of which is the so-called Lockean proviso that “there is enough, and as good left in common for others”.
In the case of the atmospheric commons, one could say that since humans have started emitting more CO2 than can be offset by natural carbon sinks, the absorptive capacity of the atmosphere has become a scarce commodity (unless, of course, it is considered justifiable to let CO2 accumulate in the atmosphere unchecked), and that paying the carbon tax would therefore be a mechanism by which individuals can obtain the consent of other users of the atmospheric commons to their appropriation. For left-libertarians, instead, individuals can unilaterally appropriate natural resources as long as they pay the competitive value of those resources. In the case of the atmosphere, this would be the market value of an emission permit.
On the other hand, it is also possible to adopt what might be called a narrow egalitarian perspective and argue that only some natural resources, such as global common pool resources, belong to humanity as a whole, not least because they are beyond the control of the state. Everyone should have an equal right to access and benefit from these resources. Therefore, if governments decide to regulate access to a common pool resource such as the atmosphere by issuing emission permits (the sum of which must be consistent with a global warming stabilisation target), these permits must be distributed equally to all, save, of course, for subsequent trading. The carbon tax is thus a way for a given government to efficiently manage the fair share of emission permits to be allocated to the entire resident population.
You conclude that there is no effective normative argument that justifies paying carbon dividends to the rich. What are the implications of this conclusion?
The simplest conclusion to draw is that the idea of recycling carbon tax revenues in the form of carbon dividends has both normative and non-normative appeal, and is worth pursuing. But those who have, at least in recent years, incurred a debt for the use of atmospheric services should be excluded from this scheme.
More generally, I would say that carbon dividends, whether more or less equal, have a huge epistemic advantage over all other possible uses of carbon revenues. If they are well explained and communicated, they allow people to understand that most of them (and certainly those in the lower and middle classes) will come out ahead under a carbon tax reform. Of course, as noted above, this is more of an epistemic benefit than a substantive one. If, instead of recycling carbon revenues, the government used the money to increase social spending, it is not out of the question that the poorest could benefit more from this than from carbon dividends.
But these benefits are difficult for individuals to measure, and they also require an act of trust on the part of the people that the government is acting primarily in the interests of worst off. Carbon dividends simplify all this. Anyone can see how much they will receive in carbon dividends in a year, get an idea of the increase in costs caused by a carbon tax, and do the maths. So if it is true that an ambitious carbon tax is essential for a rapid and efficient climate transition, and if it is also true that social opposition to a carbon tax is one of the main obstacles for governments to adopt it, carbon dividends can be the key.
Finally, what does this article mean for future research? What questions are you answering next?
In the article I have proposed Targeted Carbon Dividends (TCDs) as an alternative to Equal Per Capita Carbon Dividends (ECDs) as a method of recycling carbon revenues. TCDs are equal for everyone except the rich. Based on existing data on carbon inequality between different social groups, both in the global population and in most countries, I then discussed a possible version of TCDs that would exclude the top income decile of taxpayers from the recycling of carbon revenues. However, this does not rule out the possibility that by collecting and/or processing further data on specific countries, the same reasons I have suggested here could be used to justify the exclusion of a wider social group. Or even a smaller group. In essence, TCDs certainly lend themselves to being modulated on the basis of different empirical circumstances. My point is that none of the normative reasons usually given for ECDs can make us doubt that some version of TCDs is preferable.
More generally, I believe there are reasons to deviate from the ECDs proposal in order to make carbon dividends better serve their purpose and be fairer. I think there is much research to be done on this, and that political and moral philosophers might have a lot to say about it.
As for me, I am currently working on an individual MSCA research project, funded by Horizon Europe, which aims to answer three research questions. First, whether carbon inequality can justify the adoption of a climate policy mix that targets the emissions of the very rich differently from the emissions of everyone else – for example, by going beyond the idea of a uniform carbon price. Second, which climate policy mix can mitigate the emissions of the rich in a way that is fair to all stakeholders. Third, whether the rich’s contribution to the climate crisis, both as consumers and investors, translates into a special responsibility to remedy it – with implications, for example, for the fair burden-sharing of international climate finance.
Bio: Fausto is a philosopher who works at the intersection of philosophy and public policy. His main research interests are climate justice, intergenerational justice and economic ethics. He recently completed an individual research project at the University of Gothenburg (Financial Ethics Research Group) on the normative issues raised by carbon pricing (of which this article on the waste objection to equal per capita carbon dividends, published in Environmental Politics, is a part). He is currently a Marie Skłodowska-Curie Fellow in Philosophy at the Hoover Chair in Economic and Social Ethics at UCLouvain (Belgium), where he is working on an EU-funded individual research project entitled “Should we prohibit luxury emissions of greenhouse gases, on top of price constraints?” (PROHIBLUX). Previously, he worked as a postdoctoral fellow in philosophy at the University of Gothenburg, at the University of Turin, and at the Sant’Anna School of Advanced Studies (Pisa, Italy). He holds a PhD in Politics, Human Rights and Sustainability from the Sant’Anna School of Advanced Studies, with research in political philosophy.
