…to the oil companies.
[ The Note for December 2013 ]
It is estimated that nearly $5 trillion per year is spent to support the fossil fuel industry globally by governments (in the form of subsidies, tax credits and other industry support spending) and through hidden “externalized” costs paid by governments and consumers alike (some from health, some from degradation of vital natural resources, some from political and economic turbulence, disruption and waste). It costs a lot of money to make fossil fuels appear to be a “low-cost” way to make historic profits and provide energy. You are paying that hidden carbon tax every day, as part of the cost of almost everything you do.
In the absence of any better way to generate energy, distributing these costs of upkeep across the entire economy would seem to be an efficiency gain. We all share in the burden of financing an activity that could not otherwise be financed, and so we have energy we would not otherwise have. For a few decades, that logic actually held up. But we are now seeing costs added to our economic fabric that are genuinely unmanageable, even when distributed across the whole of human civilization. We cannot even continue to fund these externalized costs by asking future generations to carry the weight.
The aforementioned $5 trillion global carbon cost calculation does not include the escalating costs of rapidly accelerating global climate destabilization, or the resulting breakdown of ecological systems brought on by the ever-increasing burning of carbon-emitting fuels. We know these costs may outstrip the value of all quantifiable economic activity, but we are only just beginning (through disaster response, insurance portfolio risk assessment and the assimilation of other unplanned costs) to understand just how unaffordable fossil fuel externalities are.
We are not, however, lost. We now have renewable energy technologies that are capable of filling many times our total energy demand, at much lower total cost. With the fossil fuel market rigged to obscure the cost we actually pay for using its products, businesses and individuals are effectively trapped in an outmoded hyper-expensive fuel use model that limits everyone’s freedom to choose a smarter, safer future defined by genuine global thriving.
Internally sustainable industries free up capital for creative collateral solutions and for unattached quality of life improvements, all of which are hindered by wasteful spending on industries well past maturity and which cannot provide improved future efficiencies. We face a choice: keep funding the counterproductive status quo which prevents us from manifesting vital efficiencies OR ask already mature industries to pay their own costs of doing business so transition capital can support smarter solutions. Consumers and industry will both benefit from the resulting flow of funds and ideas.
A steadily escalating revenue-neutral carbon price will liberate enterprise to act boldly, so we can stop paying unmanageable carbon costs and build true sustainable prosperity.