Friday, December 28, 2007

The FeeBate Debate

The best way to deal with global warming is a FeeBate policy. This works fast and effectively, is ideology- and budget-neutral and has the least risk of feeding a wasteful bureaucracy.

In essence, a Greenhouse Gases
FeeBate policy will impose a fee on products that cause emissions of greenhouse gases, while the proceeds of these fees will in each case be used to help better alternatives, in the form of rebates.

In many respects, markets are best suited to work out which products and technologies should get support through rebates - the main criteria should be that they are replacements for the item that attracted the fee, that they are safe and that they cause little or no emissions of greenhouse
gases, or - even better - that they are greenhouse gas negative.

The FeeBate policy should be adopted globally, but
executed locally; levels of fees and rebates can be adjusted on an annual basis, depending on how successfully the shift takes place. Fees can be collected on items that are sold locally, or - if necessary - fees can be imposed on imported items.

The FeeBate policy that I propose includes:
  • a fee of 10% on sales of new cars with internal combustion engines, with proceeds used to fund rebates for electric cars
  • a fee of 10% on sales of gasoline, with proceeds used to fund rebates on purchases and installation of facilities that produce renewable energy
  • a fee of 10% on sales of coal, with rebates given when electricity suppliers install facilities that produce electricity from renewable sources
  • a fee of 10% on building and construction work using concrete that contributes to global warming, with proceeds used to fund rebates on buildings that used clean concrete
  • a fee of 10% on sales of fertilizers, with rebates on sales of agrichar, which is produced by means of pyrolysis from various forms of biowaste
  • a fee of 10% on sales of meat, with rebates and vouchers for alternative food (my personal favorite: vegan-organic food served in restaurants in communities without roads)