The economy: costs & benefits

Cash-back and re-investments cover temporarely rising cost

The climate tax on fossil fuel will initially increase global energy costs during the transition period. Certain goods and srvices will become more expensive. However –

  • Global energy bill will not be higher than what we already know
    Due to exploration, geopolitical and market influences, energy cost fluctuations are frequent. The proposed climate tax does not increase the global energy bill above what we have seen in 2008, 2013, and the 1980s – cost developments that the global economy can easily absorb.
  • Short term increase, long-term profits
    The cost for energy will be significantely lower then today after the transition to a renewable energy infrastructure
  • You will receive 7’000 $ !!
    Giving the tax revenues back to the people will increase the purchasing power of low-income brackets, maintain the purchase power of the middle class, and not affect the purchasing power of the high-income brackets.
  • Investments generate jobs and growth:
    In addition, the large investments in renewable energy infrastructure generated through the climate tax generated jobs and secondary investments.

During the transition

  • Limited cost increase
    Global energy costs will not rise above levels seen recently induced by high oil spot prices
  • Cash-back maintains purchase power
    The cash-back ensures that the purchasing power of lower income brackets is not negatively affected
  • Innovation
    The higher cost of fossil energy and the investments acts as trigger for innovation
  • New jobs
    The investments in renewable energy infrastructure will more than compensate for lost jobs in the fossil industry
  • Positive net impact
    Positive net impact on the economy after Year 3 of tax introduction and thereafter

After the transition

  • Lower energy bill
    Global energy cost will be at 4% of World GDP, as compared to 8% in 2018.
  • No more geopolitical risks
    The World will finally be free of the unpredictable fluctuations of the global oil spot price.
  • Zero GHG emissions
    After 15 years, all fossil fuels will be replaces, drastically reducing a catastophic climate derailment

A global climate tax, through the cash-back to people and the re-investment, does not only avert catastophic climate change, but also acts as economic stimulus.

Cost impact of the climate tax

Accumulated climate tax cash-back per person
Cost impacts of selected goods and services under the proposed climate tax. Fossil fuels and agricultural products’ cost will increase, but the increase is comparable modest. COnsidering the cash-back each individual receives, cost increases can easily be absorbed

The global energy bill

Accumulated climate tax cash-back per person
The global energy bill is increasing as a consequence of the climate tax on GHGs. However, the total does not increase beyond levels sen only recently in 2008 and 2013 (an the 1980s) – increases that the global economy was easily able to absorb. And this is before we take into account the economic stimulus in form of cash-back and the large invstments in renewable energy infrastructure. After the transition period, the global energy bill will be significantly lower than today thanks to the cost advantage of renewables and the higher eficiency of electric vs. combustion engines.

The climate tax dividend

The climate tax dividend: yearly cash-back per person
50% of the climate tax revenues are redistributed to individuals, in cash. Each individual receives an average of U$ 7’000 over the transition period of 15 years, or between 400 and 600 U$ per year. The cash-back is re-distributed on the national level – depending on the CO2 intensity of a country, the cash-back is higher or lower. If you are a US citizen, you will receive more than U$ 2’00’ per year, or 23’000 in total

Positive net impact on the economy

The climate tax dividend: yearly cash-back per person
The initial additional costs are compensated for by cash-back to individuals and investements in the renewable energy infrastructure. The net impact of the tax is neutral in the first two years, and increasingly positive in year 3 and thereafter. In addition, the cash.back and massive investments trigger innovation, growth, and generatete jobs.

Tax-adjsuted oil price

Oil price adjusted for climate tax
the price of oil will rise to U$ 180 (assumed a stable base price, and no major violent conflict in the oil rich regions). What might seem a lot at first sight is not that much considering the cash-back and the rapid replacement of fossil energy with cheap renewable energy. The oil price will not surpass price last seen in as 2012 before 2030

Quick links

Downloads

Short explained:

Download the teaser

 

Interested in the details?

Download the global climate tax evaluation report – “Changing Climate Change”
Download the Executive Summary of the Report