COMMENTARY
These three effective policies will help steer our societies onto the sustainable development track:
1. Carbon taxation introduced as fee-and-dividend scheme The smart thing about carbon taxation, or CO2
taxation, is that prices across the board will be
affected proportionally to their individual carbon footprint. As such, carbon taxation is universally applied in a fair and robust manner, and is not prone to special interest lobbyism. Carbon border tax adjustment (CBTA) can be imposed on imported goods from countries without carbon taxation to maintain competitiveness for businesses. A commonly heard argument against implementing a carbon tax—or environmental taxation in general—is that it will hurt low-income families by reducing their disposable income. The opposite is true if carbon taxation is implemented as a simple fee-and-dividend scheme. Championed by the Citizens’ Climate Lobby, in this scheme, the monthly national carbon tax revenue is paid out as a monthly dividend in equal proportions to all citizens. Low-income families will typically experience a net economic gain, as the monthly dividend pay-out will likely be significantly higher than their monthly carbon tax expenses due to the lower consumption and spending power of low-income families. In other words, if applied along the lines of the fee-and-dividend scheme, carbon taxation can gain instant approval and popularity among the low-income segment of the population and become a political win.
2. Economic incentives for energy-efficient solutions and/or renewable energy Cash voucher schemes for energy-efficient products such as air conditioners and refrigerators have been successful in transforming the market for energy-efficient products. At the point of purchase, once consumers are gifted with a cash voucher, they are much more likely to choose the energy-efficient options that qualify them for the voucher. Moreover, the cost of the voucher is paid back many-fold through the energy savings incurred over the lifetime of the energy-efficient product. Case in point, a Malaysian cash voucher programme for energy-efficient refrigerators and air conditioners saw a seven-fold payback from the savings. The same principle applies to providing adequate economic incentives to make people choose electric cars and Green power solutions, such as solar photovoltaics.
3. Firm energy policies with reasonable lead-time It is important to set long-term energy policy goals, so that the industry and investors have time to adjust and thereby avoid expensive investments in energy infrastructure. Such policies with acceptable lead-time would include a ban on new coal-fired power plants, a ban on fossil fuel powered cars and, eventually, a ban on fossil fuel extraction altogether.
11 Mizu Desu/
Shutterstock.com
12
laranik/
Shutterstock.com FUTURARC 71
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