Throughout the 1980s, there were organized student protests at American universities against Apartheid in white-ruled South Africa.
The common goal of such protests was to get the university to remove corporations involved in South Africa’s economy from the university’s financial investments.
The campus anti-apartheid protests were often large and turbulent.
There have been no such widespread and intense protests in the current age of global warming to get universities to divest from fossil fuels.
There have been protests for divestment, and some schools like Harvard have divested from investing in fossil fuels.
Nevertheless, fossil fuels divestment has not captured the attention of the nation the way Apartheid protest did in the 1980s — and the way civil rights did in 2020.
How to explain this relative acquiescence on campus?
There might be numerous reasons, but one reason might be that it is easier to sympathize with people when they are far away.
Historians have noted the similarities of Hollywood stars adopting children in developing countries with Roman aristocrats establishing orphanages in Africa and the Middle East.
Romans at the time slyly observed that the poor of Rome never received that kind of generosity from those who aided foreign orphans.
People can be concerned for those who are far away in either space and time yet remain indifferent toward or afraid of those same kinds of people when they are up close.
For example, homelessness in one’s own town reminds us of our own guilt and culpability, as well as the complexity of the issue and the lack of simple solutions.
But this can be taken even further.
It seems like people are often more concerned for the disadvantaged in distant lands than they are for themselves.
One can become passionately idealistic about injustice abroad with the ease of gasoline being ignited.
In contrast, sustained awareness of the vulnerability of one’s own way of life — and one’s own existence — to a global issue is too horrible to think about.
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There is a remarkable absence of protests against universities’ investments in the fossil fuel industry compared to protest in the past over other things that are largely forgotten (such as student protests for divestment from apartheid-era South Africa).
There are also fewer protests than one would expect against banks that invest in fossil fuels.
JP Morgan Chase is a classic case.
- Chase is the leading bank in terms of financing the fossil fuels industry.
- In 2020, it announced that it would cease to invest in coal companies.
- In 2021, it provided Russia’s Gazprom with $1.1 billion in fossil fuel financing.
- In October of 2021, it announced that it would reach net-zero emissions from its lending and investment portfolios by 2050.
It would seem that JP Morgan Chase launched a 30-year plan in 2020 to gradually move away from fossil fuels and this plan commenced with ending financing for coal.
Skimming through the internet, however, it does not seem that JP Morgan Chase has released their exact timeline for divesting from fossil fuels.
Perhaps JP Morgan Chase is now focused on gradually divesting from the oil industry and will later divest from natural gas investments.
Again, there seems to be relatively little public pressure on universities and banks to divest from fossil fuels.
At the very least, one might expect there would at least be some minimal pressure to get the banks to divulge the timeline of their divestment from fossil fuels.
But even that does not seem to exist.
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JP Morgan Chase has a 30-year timeline to divest from fossil fuels that was launched in 2020.
JP Morgan Chase no longer finances the coal industry.
However, this might not be such an accomplishment because natural gas had begun to underprice coal in 2012.
Can JP Morgan Chase’s plan for divestment from fossil fuels be accelerated and the time frame shortened?
How quickly could America get off fossil fuels?
It has been argued that the US already has everything it needs to decarbonize by 2035.
.https://www.vox.com/energy-and-environment/21349200/climate-change-fossil-fuels-rewiring-america-electrify
Despite the titanic effort it would take to decarbonize, the US doesn’t need any new technologies and it doesn’t require any grand national sacrifice. All it needs, in this view, is a serious commitment to building the necessary machines and creating a regulatory and policy environment that supports their rapid deployment.
In a nutshell, he has shown that it’s possible to eliminate 70 percent to 80 percent of US carbon emissions by 2035 through rapid deployment of existing electrification technologies, with little-to-no carbon capture and sequestration. Doing so would slash US energy demand by around half, save consumers money, and keep the country on a 1.5° pathway without requiring particular behavior changes. Everyone could still have their same cars and houses — they would just need to be electric.
Specifically, it is possible to reduce US emissions 70 percent to 80 percent by 2035 (and to zero by 2050) through rapid electrification, relying on five already well-developed technologies: wind and solar power plants, rooftop solar, electric vehicles, heat pumps, and batteries.
Second, to decarbonize in time, substitution of clean-energy technologies for their fossil-fuel counterparts must ramp up to 100 percent as fast as possible, after a brief period of industrial mobilization. Every time a gas or diesel car is replaced, it must be replaced with an EV; every time an oil or gas furnace is replaced, it must be replaced with a heat pump; every time a coal or gas power plant goes offline, it must be replaced with renewable energy.
This perspective helps to inform a couple of provisional goals:
- American universities must divest from fossil fuels immediately — as a moral imperative based on the unique societal mission of universities.
- All American banks must divest completely from fossil fuels by 2035 based on what seems to be possible even by relying on current technology.
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American universities and banks must divest from fossil fuels.
Could fossil fuels be banned?
According to the internet, there are currently moves to ban:
- advertising and sponsorships by fossil fuels companies;
- fossil fuel use in new buildings;
- new fossil fuel leasing and permitting on public land.
Politically, the first two initiatives might be possible.
But ceasing to develop oil and gas on public lands might backfire politically.
That’s a lot of jobs that would be sacrificed.
Would it be possible to ban imports of fossil fuels?
And in which time frame?
A legislative proposal in California would ban oil from problematic countries.
https://www.10news.com/news/in-depth/in-depth-bill-would-ban-most-foreign-oil-in-california
SAN DIEGO (KGTV) – A new bill in the California Legislature would effectively ban almost all of the foreign oil imported into California.
Senate Bill 1319 would prohibit oil imports “if the source of the oil is a foreign nation with demonstrated human rights abuses… or a foreign nation with environmental standards that are lower than those in California.”
State Sen. Shannon Grove, a Republican from Bakersfield, is the sponsor. She says the bill would help the environment by favoring oil produced in California, which has stricter environmental rules for drilling and oil production.
“What you can do is produce oil under the strictest and most environmental quality regulatory processes to make it safe,” she says.
According to the California Energy Commission, the state imported 56.2% of its oil from foreign countries in 2021. Alaska provided 14.9% of California’s oil. In-state oil accounted for 28.9%. Grove says the state should decrease its dependence on foreign oil to help the environment and the economy.
This might suggest a timeframe for banning foreign fossil fuels from the USA:
- Immediately ban foreign fossil fuels that originate from problematic countries (Russia, Brazil, Saudi Arabia).
- Ban all foreign fossil fuels by 2035.
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A carbon tax is a tax levied on the carbon emissions required to produce goods and services.
https://en.wikipedia.org/wiki/Carbon_tax
Carbon taxes are intended to make visible the “hidden” social costs of carbon emissions, which are otherwise felt only in indirect ways like more severe weather events. In this way, they are designed to reduce carbon dioxide (CO2) emissions by increasing prices of the fossil fuels that emit them when burned. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive.[1] In its simplest form, a carbon tax covers only CO2 emissions; however, it could also cover other greenhouse gases, such as methane or nitrous oxide, by taxing such emissions based on their CO2-equivalent global warming potential.[2] When a hydrocarbon fuel such as coal, petroleum, or natural gas is burned, most or all of its carbon is converted to CO
2.
In a way, a carbon tax is not really a tax but rather a fee that compensates for the “negative externalities” that are imposed on the public by private economic activity.
In fact, pollution is the classic example of a negative externality.
Greenhouse gas emissions cause climate change, which damages the environment and human health. This negative externality can be reduced by taxing carbon content at any point in the product cycle.
It’s been argued that suppressing demand by imposing carbon fees is really the only way to alter behavior to limit carbon emissions.
This is because attempts to lower fuel consumption by increasing efficiency only backfire because increased efficiency lowers prices and thus stimulates consumption.
For example, when highly efficient machinery that burned less coal was installed in British factories, coal consumption did not fall as expected.
https://en.wikipedia.org/wiki/Jevons_paradox
In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) occurs when technological progress or government policy increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use increases its demand, negating reductions in resource use.During the Industrial Revolution, it was believed that highly efficient machines that would use less fuel and so less coal would be consumed.
This is because demand for those goods increased because the price of those goods had fallen thanks to less coal being consumed in their production.
The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency also lowers the relative cost of using a resource, which increases the quantity demanded. This counteracts (to some extent) the reduction in use from improved efficiency. Additionally, improved efficiency increases real incomes and accelerates economic growth, further increasing the demand for resources. The Jevons’ effect occurs when the effect from increased demand predominates, and the improved efficiency results in a faster rate of resource utilization.
Considerable debate exists about the size of the rebound in energy efficiency and the relevance of the Jevons’ effect to energy conservation. Some dismiss the effect, while others worry that it may be self-defeating to pursue sustainability by increasing energy efficiency.[3] Some environmental economists have proposed that efficiency gains be coupled with conservation policies that keep the cost of use the same (or higher) to avoid the Jevons’ effect.[6] Conservation policies that increase cost of use (such as cap and trade or green taxes) can be used to control the rebound effect.
In a very American example, the government imposes fuel standards upon the automotive industry, and this has led to breakthroughs in automobile fuel efficiency.
However, contrary to the intentions of the US government, as American vehicles have become much more fuel efficient, they have become much larger because they are cheaper to operate.
- For example, the average fuel efficiency of a VW Beetle in 1972 was about 22 miles per gallon.
- Fifty years later, the 3.3 liter V-6 Ford F-150 gets 24 mpg on the highway.
Likewise, when people do buy a compact car, they end up burning just as much fuel as they used to because now they drive around more.
Only a rise in the price of fuel can get the public to adopt a lifestyle in which they are cutting back on fuel consumption — the way they did after the oil shocks in 1973 and 1978 (and 2008).
However, raised fuel prices can lead to civil strife.
France is a case in point.
The French government made a push for carbon fees in 2009.
https://en.wikipedia.org/wiki/Carbon_tax#France
In 2009, France detailed a carbon tax with a levy on oil, gas, and coal consumption by households and businesses that was supposed to come into effect on 1 January 2010. The tax would affect households and businesses, which would have raised the cost of a litre of unleaded fuel by about four euro cents (25 US cents per gallon). The total estimated income from the carbon tax would have been between €3–4.5 billion annually, with 55 percent from households and 45 percent from businesses. The tax would not have applied to electricity, which in France comes mostly from nuclear power.
However, from the beginning there was pushback from one segment of the French population.
On 30 December 2009, the bill was blocked by the French Constitutional Council, which said it included too many exceptions. Among those exceptions, certain industries were excluded that would have made the taxes unequal and inefficient. They included exemptions for agriculture, fishing, trucking, and farming. French President Nicolas Sarkozy, although he vowed to “lead the fight to save the human race from global warming”, was forced to back down after mass social protests led to strikes. He wanted support from the rest of the European Union before proceeding.
Carbon fees were finally implemented in France in 2014.
In 2014, a carbon tax was implemented. Prime Minister Jean-Marc Ayrault announced the new Climate Energy Contribution (CEC) on 21 September 2013. The tax would apply at a rate of €7/tonne CO2 in 2014, €14.50 in 2015 and rising to €22 in 2016.[114] As of 2018, the carbon tax was at €44.60/tonne.[115] and was due to increase every year to reach €65.40/tonne in 2020 and €86.20/tonne in 2022.
The planned gradual increase in carbon fees led to violent and prolonged rebellion by a segment of the French population.
After weeks of protests by the “Gilets Jaunes” (yellow vests) against the rise of gas prices, French President Emmanuel Macron announced on 4 December 2018, the tax would not be increased in 2019 as planned.
Journalists and French authorities closely examined the dynamics of the “yellow vest” protests.
The protesters were found to be working-class people who lived in small houses outside the city and commuted to work in their cars.
This is exactly the lifestyle that they want, and they do not want to live in the city in an apartment near their work, nor do they want to commute on mass transit.
Entertainment is dear to them, and once a week they like to eat out or go to the movies or attend a sporting event.
As carbon fees rise slightly, they can still get by, but they cannot afford their modest entertainment and so existence becomes unbearable to them.
They then become agitated and violent and threaten the stability of the French republic.
Carbon fees are therefore absolutely necessary yet politically unacceptable.
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There is one conceptual advantage to insisting that so-called “carbon taxes” are really fees.
It offers a way to make carbon taxes (fees) politically palatable.
A tax has the primary purpose of raising revenue. By contrast, a fee recoups the cost of providing a service from a beneficiary.
- In other words, taxes exist to fund government goods and services, like the military.
- In contrast, fees for negative externalities like pollution reimburse those who are negatively impacted and deter those who are imposing the externalities.
The biggest problem with carbon “taxes” is that they are “regressive” because they have a disproportionate impact on less affluent people.
This is because fuel expenditures (for transportation and home energy) make up a larger percentage of the household budgets of people who are socioeconomically disadvantaged.
The proposal:
Carbon fees would be returned to the American people in the form of a dividend that would be the same amount for all Americans.
For example, if carbon fees brought in $2,000 a year to the government for every American, then the dividend would be worth a flat $2,000.
https://en.wikipedia.org/wiki/Carbon_fee_and_dividend
A carbon fee and dividend or climate income is a system to reduce greenhouse gas emissions and address climate change. The system imposes a carbon tax on the sale of fossil fuels, and then distributes the revenue of this tax over the entire population (equally, on a per-person basis) as a monthly income or regular payment.Designed to maintain or improve economic vitality while speeding the transition to a sustainable energy economy, carbon fee and dividend has been proposed as an alternative to emission reduction mechanisms such as complex regulatory approaches, cap and trade or a straightforward carbon tax. While there is general agreement among scientists and economists on the need for a carbon tax, economists are generally neutral on specific uses for the revenue, though there tends to be more support than opposition for returning the revenue as a dividend to taxpayers.
This refund would not consist of a once-a-year payout after taxes had been filed.
Rather, Americans would receive a monthly deposit in their bank account.
After all, the French “yellow jackets” show how sensitive much of the public can be to being deprived of even a small amount of “beer money” due to carbon taxes.
People need to be reimbursed on a more frequent basis.
The “fair tax” scheme provides a model.
https://en.wikipedia.org/wiki/FairTax#Monthly_tax_rebate
Monthly tax rebate
The rebate is meant to eliminate the taxation of household necessities and make the plan progressive. Households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member. The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a “smartcard” that can be used like a debit card.
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One problem with universal flat carbon-fee dividends is that millions of Americans do not have access to a bank account.
These adults who do not have their own bank accounts are referred to as the unbanked.
The unbanked are described by the Federal Deposit Insurance Corporation (FDIC) as those adults without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another.
https://en.wikipedia.org/wiki/Unbanked
One report found the nationwide rates to be 7.7% unbanked and 17.9% underbanked, with the most unbanked state Mississippi, at 16.4%.
The Federal Reserve estimated there are 55 million unbanked or underbanked adult Americans in 2018, which account for 22 percent of U.S. households.
Places where over 20% of residents have no bank accounts include Miami, Florida; Detroit, Michigan; Laredo, Texas; Newark, New Jersey; Hialeah, Florida; Hidalgo County, Texas; The Bronx; and Cameron County, Texas.
Many counties with fewer than 100,000 residents had even higher rates, including Starr County, Texas, at 32.7%. Some census tracts in Savannah, Georgia; Cleveland, Ohio; Nashville, Tennessee; and Atlanta, Georgia had over 40% unbanked residents.
Some reasons a person might not have a bank account include:
- Lack of access via a nearby bank branch or mobile phone
- Minimum balance fees
- Distrust of the banking system, typically due to lack of transparency regarding fees and deposit timing
- No access to government-issued ID, which is required to open a bank account
Being unbanked is sometimes by choice.
It is an expensive choice.
https://www.investopedia.com/terms/u/unbanked.asp
Why Is Being Unbanked a Problem?
Being unbanked can be undesirable for several reasons. Alternative financial services, such as cash-checking services and payday loans, are much more costly. What’s more, without a bank account, people don’t generate the data they need to establish creditworthiness. As a result, when it comes time to cover an emergency car repair or medical bill, a payday loan may be their only option. These extra costs significantly hurt families who are already struggling to make ends meet.
So why do people not open a bank account?
Understanding the Unbanked
Unbanked people generally pay for things in cash or else purchase money orders or prepaid debit cards. Unbanked people also typically do not have insurance, pensions, or any other type of professional money-related services. They may take advantage of alternative financial services, such as check-cashing and payday lending, if such services are available to them.
Why People Become Unbanked
The main reason for being unbanked, according to the FDIC study, is cost—those who are unbanked can’t meet banks’ minimum requirement balances. Another way of looking at it: Traditional banks don’t provide access to the financial services and products unbanked populations need. For instance, someone living paycheck-to-paycheck with very low or volatile income, may not be able to wait for a paycheck to clear at a bank. So they turn to a check-cashing service, which will provide cash immediately, albeit for a fee.
In neighborhoods that are “bank deserts,” such alternative financial services are also likely more common and open longer hours—in other words, more accessible and convenient than arranging for transportation to and from bank branches during limited banking hours. These high transaction costs (e.g. time/cost to visit bank branches, inconvenient hours), lack of clarity about fees, and alternative products that provided a more compelling value proposition have all been identified as reasons people are unbanked.
Lack of trust in banking institutions can also come into play. Distrust was the second main reason cited in the FDIC study for being unbanked—not surprising given the history of lending discrimination experienced by Blacks and Latinx in the U.S. and the lingering inequities. For instance, predominantly Black and Latinx neighborhoods have been targeted for predatory lending, including subprime mortgages. Recent immigrants who experienced banking crises in their countries of origin may also lack trust in banks.
The “underbanked” are an example of people who have bank accounts but choose to use more expensive methods to transfer money.
Again, they make up almost one-fifth of the American population.
Unbanked vs. underbanked
Underbanked is a related term. It refers to families who have checking or savings accounts but often rely on alternative financial services such as money orders, check-cashing services, and payday loans, as opposed to traditional loans and credit cards, to manage their finances.
In terms of universal flat carbon-fee dividends, the underbanked already do have access to bank accounts where their dividends could be forwarded.
