I have never responded to a blog so forgive me if what I do here is outside the blog box, but I just want to paste in why and how I think we should combine the best in the Upstream approach (in this case Cap and Dividend) and he best in the TEQ approach, starting with the former and then bringing in the latter 3 years later.

[A quick note: The reason for starting with an upstream approach like Cap and Dividend is best explained by contrasting the (succesful) attempt to bring in congestion charges in London, with the (unsuccesful) attempt in Edinburgh:

In Edinburgh they tried to bring in a comprehensive scheme with an outer ring and an inner ring. Doubtless it was perfect from a transport point of view but it was too complex and was rejected. In London Ken Livingston started with a simple small area covered, and then once that had proved successful expanded to cover a much larger area. Similarly, a perfect scheme (TEQs) would be great, but one that is politically attractive and ecologically responsive, and can be developed further, makes more sense. to bring in first]

‘Cap and Dividend’ is based on the fact that the atmosphere is a global commons which we all equally rely on. It gives each person the right to the same proportion of overall emissions which are reduced year on year, so reducing our collective emissions to a level which can be absorbed by the biomass. In this system the vast majority of the population are immediately better off and only those who can afford it (the heavy emitters) are penalised for disproportionately polluting the global commons. In this system, those bringing carbon into the economy (those very few companies importing or producing coal/ oil/ gas/ cement etc) take part in an annual auction to buy the right to bring carbon into the economy.

The extra price they have then paid is

(i) passed on to manufacturers and other users of the fossil fuel they bring into the economy, which leads to higher prices for all those using those products, services, modes of transportation etc which have carbon embedded in them; but the cash generated from the auction of these carbon emission permits is

(ii) passed on to the population at large (directly into their bank or post office accounts) so that people can deal with the increase in prices. This means that (a) those using more than their fair share of carbon are penalised because all such prices will have risen, while those using less (the great majority) will benefit with extra cash in their pocket, and (b) producers will be immediately encouraged to develop non-carbon based products/ services/ modes of transport, etc., and avoid producing high carbon ones.

After a 3 year settling in period, ‘Cap and Dividend’ (www.capanddividend.org) would then be supplemented by people using Carbon Cards (similar to credit cards) to monitor their purchase of CO2 embedded goods and services (This is drawn from the ‘Tradable Energy Quota’ system – http://www.teqs.net/). Those purchasing more carbon than their fair share would now not only be paying for it through the price of the goods purchased, but would also receive proportionately less cash from the carbon auction dividend. Those purchasing vastly more carbon would start paying into that dividend fund themselves (at an exponentially increasing rate). Meanwhile the great majority (those who bring in less CO2 than their fair share) would receive this extra cash from those bringing in more. As the rapid rise in the cost of high-carbon options takes effect there would be a rapid development and shift to low-carbon ones. As the amount allowed into the economy is reduced year on year, our collective emissions are reduced to a level which can be absorbed by the biomass.

Sorry for the length!

Justin

Hmmm, I suspect you both may be. We’d better try damming the flow upstream, downstream and anywhere else. Let’s not say this is better than that but let’s try everything at once and hope some of it works.