The barriers to a carbon fee and dividend policy (Letters)

We are working hard to change the government’s mind on carbon fee and dividend, writes Catherine Dawson. The climate crisis cannot be solved within a continuing market economy, says Frank Jackson

In his article (There’s a simple way to green the economy – and it involves cash prizes for all, 5 January), Henry D Jacoby gives a brilliant analysis of the benefits of a carbon fee and dividend (or climate income) carbon-pricing policy and why there are some psychological barriers to its wider adoption. Citizens’ Climate Lobby is an international grassroots environmental group which has been encouraging politicians to consider adopting carbon fee and dividend (CF&D) since 2007.

CF&D has been adopted in Canada and Switzerland – although the latter does not currently tax fuel for energy while it moves towards the development of more renewable energy systems. Canadians could have replaced its implementer, Justin Trudeau, last year and ditched the policy. They didn’t.

Our government acknowledged the merits of the tax in its recent carbon-pricing report, but there is a psychological barrier, as Jacoby points out: the Treasury doesn’t like hypothecated taxes or dividends. We at Citizens’ Climate Lobby UK are working hard to change their mind. Do take a look at our website and consider supporting us.
Catherine Dawson
Citizens’ Climate Lobby UK

Henry D Jacoby makes a good case for a carbon tax as a powerful tool in weaning our economies off fossil energy. But that implies that the oil will still flow in order to be taxed – and when, as it must, the flow finally stops, the tax also stops. The flaw in his argument is the implicit assumption that the climate crisis can be solved within a continuing market economy, by simply changing more rapidly (but not totally) to renewable energy. If this existential threat to our species (and the rest of the biosphere) is to be defeated, we cannot continue in a system where “most personal and business decisions are driven by price”. Indeed, I dispute that statement even in today’s society.

I further dispute that no one really likes paying taxes. As a pensioner, my income is well below the median. Yet I happily accept that out of it, I make my contribution to all the collective things that make life much more than mere existence, for all my fellow citizens as well as myself. I am sure I am not alone in this. Of course, specific items of expenditure, such as nuclear weapons, are a different matter, but that does not affect the principle.
Frank Jackson
Harlow, Essex

Note: The letters are a re-post of the original posted on The Guardian website.