REMI Study Shows Carbon Fee & Dividend Grows Economy

Regional Economic Models, Inc. (REMI), one of the most respected economic modeling firms in the world, has produced a new study, using proven and reliable models, which shows that a steadily rising carbon fee returning 100% of revenues to households would create millions of new jobs, expand GDP and save hundreds of thousands of lives. In the first 10 years alone, the plan would generate 2.1 million net new jobs, across the entire US economy.

jobs-national

It is commonly thought that putting any kind of price on carbon emissions would cause costs to rise unbearably and the economy to slow disruptively. REMI’s new study The Economic, Climate, Fiscal, Power and Demographic Impact of a National Fee-and-Dividend Carbon Tax [pdf] shows that the manner in which the price is applied is what matters, and that getting it right can relieve and even reverse grave inefficiencies in our current market dynamic.

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Earth Day Comment: We are Living the Transition

We are now living in the beginning of a period of global transition. Over the next two decades we will be rebuilding the infrastructure of our civilization. We could choose to replace existing infrastructure with something similar, but slightly newer and more expensive… or we could choose to build the economy of the future. There’s no question about which is a better investment.

As we come to grips with the mounting costs of inefficient outdated technologies, we are beginning to see the unprecedented economic incentive for moving swiftly to redesign the built environment that we inhabit. The amount of energy trapped in hydrocarbon molecules deep underground is minuscule in comparison to the amount of solar energy that lands on the surface of the Earth and the resulting kinetic energy that moves around our planet all day, every day.

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Renewable Energy is Not an Ideological Issue

There is nothing ideological about the issue of renewable energy resources. Proponents tend to care about the health of the natural environment, which motivates their wish to see renewables replace high-polluting fuel sources like oil and coal, but the technologies, the fact of their economic viability and their usefulness for society at large, are not in any way a matter of ideology.

Neither is there anything ideological about the allegiance of some to carbon-based fuels. The considerations are entirely practical on all sides, and we need to remember this as we try to find consensus on how to move forward, responsibly, as a civilization, in terms of our relationship to energy and the environment.

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New Development of Carbon Fuels May Be Drag on Economy

high-risk, low-yield hydrocarbon fuels not fit to compete over long term

Opportunity cost is a serious, long-term stress on economies hampered by rampant governmental corruption, or by severe productive resource deficits—in consumer capital, infrastructure, or long-term reliable energy flows. With the ongoing boom in development of shale gas drilling and tar sands oil recovery, there is now massive investment, into the tens of billions of dollars of public and private money, in high-risk, low-yield ways of extracting carbon-based fuels, with the explicit purpose of extending old-fashioned combustible fuel technologies beyond what would otherwise be economically viable.

Massive new investment is flowing to these resources, because existing incentives and the influence of entrenched interests make it more efficient for major investors to pour money into these resources. They are not attracting investment by being inherently more economical than other options. In fact, as a direct result of dedicating such massive investment to new, untested and riskier schemes for carbon fuel extraction—including ultra deepwater drilling—the most efficient means of investment in future energy technologies are being choked off.

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Fossil Energy: Hidden Costs Threaten America’s Future

As civilization evolves, and science advances, and democracy effects positive change in favor of human dignity and freedom, one paradigm replaces another, and we become better at managing the problems that threaten to destabilize the human environment. There was a time when authority could use command and control to maintain order, for a time, but in our democratic and informational age, that paradigm is as primitive and unworkable as it is unjust, and our problems demand subtler, more values-infused solutions.

As the subtitle of a recent Economist report on closed industries in Italy says it, “Cartels that make life cushy for insiders exact a heavy toll on everyone else”. There is no real way around this: to profit from doing business well and providing excellent quality of manufacture and service is one thing; to pad one’s profits by coordinating market strategies with close competitors that join with one to form an exclusive cartel, boxing out the influence of stakeholders is quite another.

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Big Oil Needs to Adjust to Non-fuel Long-term Business Model

The converging crises of carbon-induced climate destabilization and unsustainable transport-related costs and land-use are pushing global society toward a moment of major change, in which “fuel” as we know it will be less a matter of resourced-fuel combustion and more a matter of renewable clean electric power storage and delivery. The petroleum industry needs to adjust its business model to operate in a world where burning its prime resource is not the goal.

Until now, and even in the midst of the current ongoing energy debate, we are accustomed to viewing the onset of renewable energy sources and the interests of petroleum companies as diametrically opposed and politically incompatible. That idea is now easily seen as what it is: an ideological assumption based on a world-view informed by too few facts and too little understanding of complex interrelationships among resources, natural systems, and economic activity.

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Big Oil Needs to Adjust to Non-fuel Long-term Business Model

The converging crises of carbon-induced climate destabilization and unsustainable transport-related costs and land-use are pushing global society toward a moment of major change, in which “fuel” as we know it will be less a matter of resourced-fuel combustion and more a matter of renewable clean electric power storage and delivery. The petroleum industry needs to adjust its business model to operate in a world where burning its prime resource is not the goal.

Until now, and even in the midst of the current ongoing energy debate, we are accustomed to viewing the onset of renewable energy sources and the interests of petroleum companies as diametrically opposed and politically incompatible. That idea is now easily seen as what it is: an ideological assumption based on a world-view informed by too few facts and too little understanding of complex interrelationships among resources, natural systems, and economic activity. 

Continue reading “Big Oil Needs to Adjust to Non-fuel Long-term Business Model”