I think I see a potential policy here for Obama. He introduces some form of one off super tax on the wealthy, or a new top rate of tax for multi-millionaires. But as with everything in America we need to market it properly. I suggest the name Providing Appropriate Tax Requirements In Our Time or Patriot Tax for short. This would put the cat among the pigeons. Those right wingers who love to drape themselves in the US flag would suddenly face the accusation of being unpatriotic by dodging tax (either through legal loopholes or by using more illicit techniques). “Why does Bachmann hate America so much?” or “why are the Koch brothers so un-patriotic?” would be comments the left wingers could say and still keep a straight face. Fox News won’t know what to do!

More importantly it would combat what to me is a serious problem with many of the world’s super-rich who seem to think that its okay to cheat on you’re taxes if you’re rich enough or you’re crazy right wing politics disagree with said taxes (even in situations where you’re job or business is dependant on high levels of government spending). This policy would hammer home the point that there is never any excuse for such behaviour.

Take my example. I oppose council tax. For those not from UK shores this is a tax that is calculated based on the value of the house you live in (whether renting or the owner). The bands are very wide and thus someone living in a 1 bedroom apartment in Camden Town can wind up paying the same tax as his super rich neighbour in a 5 bed penthouse in Notting Hill. Meanwhile, Billionaire Phil “Tax-less” Green pays no council tax (nor income tax), as he flies in every week from Monty Carlo and stays in a plush London hotel. Or how about if you bought a house many years ago in a working class suburb and retired? Now just because you’re neighbours are all yuppies and the house price has gone up since then you’re living on cat food just to pay off the council tax. It’s basically a horribly unfair tax, the tax equivalent of driving down the street randomly shooting up the place with a scatter gun. A local income tax to me would seem much fairer as this would link ones ability to pay to the amount one pays in tax. But do I pay council tax, despite my objections to it? Yes, I do, reluctantly, so reluctantly in fact that I just realised forgot to pay it yesterday so will have to run down to the post office! Either way, objecting to a tax is no excuse for not paying it (unless you genuinely can’t afford to pay it or they’ve overcharged you, which is a common occurrence with the council tax!) as you merely shift the tax burden onto your fellow citizens. If you disagree with a tax, vote for parties who pledge to change it…of course I did that, they got into power and are still squabbling, go figure! And of course the rich frequently do this, buying up politicians get them to repeal taxes but not the services of the state that it supplies to them.

Of course as I pointed out in a prior post, we cannot simply tax the rich and that will solve everything. But certainly it will go along way to solving the financial problems of several states. An increase in general taxation in many countries (the US particularly) is inevitable as are some spending cuts. In the US the military budget and excessive farm subsidies plus the various corporate welfare and other elements of political pork would be my first targets for the axe.

But certainly the rich need to realise that the gravy train they are rolling along in is about to reach the end of the line, and they are going to have to pay their own way from now on. And the rich have every incentive to support these policies. As I also pointed out in a prior post the rich have the most to loose if major trading nations start filing for bankruptcy. Some of those debts that will be defaulted on are owed to them, or owed to the bank or hedge fund which all their money/gold/shares are tied up in. So supporting higher taxes, as Buffett and Bettencourt propose, isn’t entirely an altruistic move. Also, by agreeing to a modest tax hike now they are heading off the possiblity of a much more severe one in the future.

Either way we all need to accept, that none of us like paying taxes, but it’s a necessity, as its sort of nice to have police, firemen, emergency services (like those all important hurricane warnings going out now stateside), roads, libraries, schools, parks, sports grounds, art galleries, hospitals and public transport – amongst many other things! We have to pay for those services some way, and if we don’t pay for them via taxes then we pay for private companies to supply the same service. And the experience here in Britain is that those private services usually cost more and supply a poorer quality of service (see my comments on British Railway privatisation).

There are but two certainties in life – Death and Taxes. And scientists are working on the first of these!

Sachs introduces with “the four directions” which are his logical answers to scarcity. Then his talk is divided in nine points; some skipped, others expanded. Focussing on growth, the efficiency paradox, green investments, sufficiency and commons here are a selection of quotes and notes.

Introduction: The four directions

“Let us speak about the success of Copenhagen [laughter from the crowd] everybody who is right in his mind, in the world, knows that we are entering a new historic age. Everybody who is clear in his mind knows that, let’s call it universal encompassing environmental scarcity is to be with us for the 21st century.”

“There are four possible reactions. [...] the first logical answer is, well, keep out people who might add to the aspirations; so it is a logical answer to go for exclusion. [...] Second logical answer when scarcity is looming [...] expansion is a logical response [nuclear power, genetic technology, capture and storage of CO2, geoengineering]. Third, [...] get better in the way we use things; so efficiency is another logical answer. [...] Fourth, [...] revise the aspirations.”

Growth

(11-17 minutes)

“Growth [...] it is a very young phenomenon. Of course for many thousand, two thousand years certainly, humanity has lived without steady economic growth. More so, classical economists – Adam Smith, Malthus, [?] – still do not really have the idea about steady accelerating growth. Yes, there was the idea around that you might increase prospect [...] at some point it will kind of level out, it’s not going to be, if you want, a human condition.”

“The idea of permanent economic growth is an offspring of the fossil age.”

Before second world war governments did not see economic growth as their main objective. Growth philosophy a product of the post-war effort to curb unemployment, thus only 40-50 years old.

Efficiency paradox

(22-28 minutes)

Efficiency paradox: Efficiency leads to consumption.

“The direct rebound effect is that once you can do something more efficiently you do more of the same thing. […] The indirect rebound effect is even more important: […] Where does the money go? […] Whereever you look it is very likely that there will be new energy and material demand associated with it.”

For example, I bought a bike about a week ago. I use it to transport myself to and from work so it already did about 100 kilometers. That’s a couple of kilos of CO2 saved right there. However, it is the stated policy of the Danish government to sell unused carbon quotas. The money they use on tax cuts for the rich and for companies. Thus, my green investment and biking effort is funding luxury yachts, stock market speculation and I don’t know what else.

“The precautionary principle [...] requires we begin research, debate, social experiments about how to live well with less or no economic growth.”

Green investments

(33-37 minutes)

“Investments today shape the economy of tomorrow.”

“There is a common ground [...] between green economy and degrowth. We need green investments because we need a different infrastructure. [Even if it comes with short term growth.] In the mid to long term a real green new deal has to incorporate a perspective of degrowth.”

Sufficiency and the commons

(37-51 minutes)

“Cars are built for intermediate performance levels.”

Effort is wasted in designing for top speed etc.

“The more unequal a society is the less happy people are.”

Unhappiness has environmental consequences as well as growth incentives, therefore promoting equitability creates sustainability.

“If we’d had to pay for Wikipedia, we wouldn’t have it.”

In an interview with the Guardian last week Al Gore talked about the climate negotiations in Copenhagen this year, the European carbon market, climate change deniers, smart grids and nuclear energy.

The most surprising comment from Gore was about nuclear energy and its role in fighting climate change. According to Gore nuclear energy is not the answer to our problems because it’s dirty, too expensive, unsafe and that it poses a threat to world peace.

“I’m not a reflexive opponent of nuclear. I used to be enthusiastic about it, but I’m now sceptical about it. There’s a few reasons. Let’s assume for the moment that we will solve the problem of long-term storage of radioactive waste. Let’s assume also that we’ll figure out how to standardise their design as [each plant] is currently unique and that enhances the risk of operator accidents. Let’s assume we can solve the terrorism threat to nuclear reactors. That still leaves a couple of very difficult problems.

First and foremost, economics. The nuclear industry cannot give any reliable cost estimate for how much it will take to build a nuclear plant. When a utility is confronted with the absence of any advances for how much the construction cost is going to be, then that’s a problem. Because the economics of nuclear only work at scale. You’ve got to have a 1,000 megawatt plant for it to be efficient and competitive. In the current environment, if you run a large utility that sells electricity you’ve got a certain amount of money to allocate in your budget. If you’re looking at the trends towards more conservation and the rapid introduction of renewables, it’s hard for you to project what your demand is going to be with as much precision as when the world was more predictable. As a result, you are less inclined to take all of your money and place one big bet on something that matures 12-15 years from now at an uncertain cost. That what’s called a “lumpy investment” and they want smaller increments that give them smaller flexibility. In the US, there hasn’t been a new order for a new reactor in 36 years.

Yes, there is [more appetite for nuclear power now]. And because of the carbon crisis there will be more nuclear plants built and some of those being retired will be replaced by others. I think it will play a somewhat larger role, but it will not be the main option chosen.

Whatever countries such as the US and the UK do, it will have a demonstration effect for the rest of the world. As the world comes to grips with how to solve the climate crisis, we in the US and the UK have a leadership role. If we told the rest of the world that nuclear is the answer [they would follow]. For the eight years that I spent in the White House every nuclear weapons proliferation problem we dealt with was connected to a reactor programme. People have said for years that there are now completely different [nuclear] technologies. OK, but if you have a team of scientists that can build a reactor, and you’re a dictator, you can make them work at night to build a nuclear weapon. That’s what’s happened in North Korea and Iran. And in Libya before they gave it up. So the idea of, say, Chad, Burma, and Sudan having lots of nuclear reactors is insane and it’s not going to happen.”

And Greenpeace was of course happy by Gore’s comment. Martin Lloyd, from the Greenpeace blog Making Waves, said that:

“It’s always nice when people agree with you. We’ve maintained that nuclear power is a dangerous distraction to the real solutions to the climate crisis for a long time now. It’s dirty, it’s unsafe, it’s a threat to world peace and it is terribly, terribly expensive.”

“Now, Al Gore, who’s sometimes been on the other side of this argument has come round to our position. Because, as he notes, even if you assume problems with safety and waste can be overcome, it just doesn’t make sense economically.”