Problems with Bernie’s Climate Plan
Why Yang’s Plan is Better & Four Proposals to Fix Bernie’s Plan
Comparing Bernie and Yang on Climate Policy
Bernie’s climate plan is deficient in three respects and, consequently, is guaranteed to fail. Firstly, he has abandoned carbon pricing, which was a central part of his platform in 2016. Secondly, he has vowed to ban all nuclear energy (including thorium). Thirdly, he has sworn off any reliance on carbon capture or geoengineering. These three deficiencies make Bernie’s plan not just imperfect but destined for failure. It will be impossible to meet our energy needs under his plan without reliance on nuclear and it will be impossible to meet the emissions reduction goals he has set without carbon pricing and carbon capture.
This essay is going to be a bit longwinded and full of wonky details, but it is necessary to understand climate policy a little bit in order to understand why Yang’s plan is so much better than Bernie’s. If you are a climate change skeptic, check out my four-part series of articles on The Ecological Crisis & Its Solution, where I explain the science in a simple and easy-to-verify way.
Emissions & Carbon Pricing
The problem of climate change demands a political solution and one that is certainly not laissez faire. This is why conservatives and right-libertarians — people who advocate laissez-faire capitalism — reflexively reject the claims of climate science. The problems posed by climate change, as well as the other ecological crises that mankind has caused, simply cannot be dealt with in an individualistic manner. You cannot convince all the individuals and all the corporations in the world to stop polluting. In order to stop climate change and turn back the clock a bit, it will be necessary for social action to be taken. It will be necessary to alter our social relations and our economic relations!
Murray Bookchin, the father of social ecology, asserts that in order to have an ecologically sound economy, we need to fundamentally alter our social and economic relations — we need to change the way consumption is done in the marketplace, thereby altering the way that production is done. Bookchin also asserts that this alteration of our social and economic relations cannot be done simply through a moral/ethical or religious awakening. He is correct when he asserts that a political change must precede the economic change. It will take a change in the political realm in order to alter our social and economic arrangements. Unfortunately, Bookchin naively believed that an anarchistic approach could solve our climate problems. In reality, government policies have actually been extremely effective at reducing pollution. If we want to solve our climate problems, we will need to encourage strong governments to implement sound policy.
There is no laissez-faire mechanism in place to penalize companies that pollute the air — the free market would allow corporations to render the planet uninhabitable due to air pollution. There is this myth of the rational consumer, which supposes that consumers make decisions on a completely rational basis, but consumers often act on incomplete knowledge or in their own private best interest instead of acting in everyone’s best interest. Sometimes the private best interest of consumers does not align with the best interest of society as a whole. I have heard both libertarians and distributists assert that people can vote with their dollars, and thereby alter the nature of the market. If you don’t like the practices of this company, you can simply purchase from that company instead. In a competitive marketplace, there is some truth to this. However, most people don’t have sufficient knowledge to make accurate judgments.
I imagine that there are quite a few people like myself who would prefer to purchase products from the companies that are the most ethical. However, there are two factors standing in the way: (1) it is impossible to ascertain the relevant information in regards to every purchase, and (2) it would be much more expensive to buy from the most ethical company most of the time. This is basically a failure of the market to bring about socially optimal results. The cost of pollution is a negative externality on all of society — that social cost is not reflected in the price. People tend to purchase the cheapest product of an acceptable quality. The cost of pollution is simply not reflected anywhere in the final product: the product is neither more expensive nor of a lesser quality.
Suppose that two companies produce widgets. Company X produces them with energy obtained by burning coal, thereby producing a lot of SO2, NOx, and CO2, which produces acid rain that damages nearby crops, kills fish in nearby lakes, and contributes to global warming. The cost of the pollution falls on the farmers and fishermen in the area, as well as on the greater community. Company Y, on the other hand, has a more ethical approach. They produce widgets with clean and renewable energy. However, the clean energy is more expensive than coal, so it costs Company Y more to produce their widgets. Both companies produce products of comparable quality, but Company X sells them for 5% cheaper, even though their production process is more harmful to everyone. Consequently, the average consumer will end up buying their widgets from Company X rather than from Company Y, even though this is an irrational choice. By purchasing from Company X, making that decision on the basis of price and quality without considering externalities, consumers are actually enabling and encouraging the destruction of the environment.
Every single product that you purchase generates some sort of externality. It is impossible for the consumer, being a fallible and limited human being, to obtain and comprehend all the information necessary in order to make a rational decision in all cases. Even when the consumer does know about negative externalities, the consumer still tends to make their final purchasing decision on the basis of price and perceived quality alone. The way to remedy this failure of the market is quite simple. The community that bears the cost of the negative externality ought to charge the company a fee for generating the negative externality. In the scenario I mentioned above, I firmly believe that Company X ought to be charged a fee for polluting so that it costs them more to produce in a manner that is socially harmful. If this is done, then Company X will have to sell their widgets at a higher price, which allows the consumer to see the actual full cost of production in the final price. The price increase may be 10%, but that increase merely represents the cost of production that had previously been socialized and born by the community. The consumer will now look at the price and see that the eco-friendly alternative offered by Company Y is actually 5% cheaper. Thus, the average consumer will now prefer the product that does not generate negative externalities in the form of acid raid, poisoned crops, dead fish, and global warming. An approach like this, which taxes corporations by charging a fee for certain emissions, is a type of Pigouvian tax. A Pigouvian tax is “a tax on any market activity that generates negative externalities (costs not included in the market price).”(Wikipedia).
Emission pricing can be done in various ways. The simple tax approach discussed in the last paragraph does work, but there are some other options as well. Cap and trade or emissions trading is analogous to an emission tax — the end result is similar, even though the form of the policy differs. Cap and trade is essentially a Pigouvian tax on emissions that is reframed as a tradable permit scheme. The end result is largely the same — the one policy just taxes the polluter before they pollute, whereas the other one taxes them after the fact. Cap and trade, however, has the added benefit that it makes it easier to meet your emissions reduction goals since you just set the cap and don’t sell additional permits beyond that, whereas a conventional emissions tax relies on guesswork to determine what price needs to be put on the emission in question in order to get the optimal amount of emissions produced.
In the late 80s and early 90s, we had two big ecological catastrophes facing us, both related to harmful emissions. The first was the problem of acid rain caused by SO2 and NOx emissions, which I mentioned above. The second was the proliferation of products containing CFCs. CFCs or chlorofluorocarbons used to be widely used as refrigerants and propellants. They are what used to be used as a propellant to force the hairspray out of the bottle when the button is pushed. CFCs turned out to be extremely dangerous because they float up into the atmosphere and turn into chlorine in the ozone layer, breaking down ozone (O3) into oxygen. Ozone blocks UVB radiation from the sun, protecting life on Earth from harmful radiation. One of the negative effects of ozone depletion would be an increase in the rates of skin cancer.
“CFC molecules are made up of chlorine, fluorine and carbon atoms and are extremely stable. This extreme stability allows CFC’s to slowly make their way into the stratosphere (most molecules decompose before they can cross into the stratosphere from the troposphere). This prolonged life in the atmosphere allows them to reach great altitudes where photons are more energetic. When the CFC’s come into contact with these high energy photons, their individual components are freed from the whole…. Chlorine is able to destroy so much of the ozone because it acts as a catalyst. Chlorine initiates the breakdown of ozone and combines with a freed oxygen to create two oxygen molecules. After each reaction, chlorine begins the destructive cycle again with another ozone molecule. One chlorine atom can thereby destroy thousands of ozone molecules. Because ozone molecules are being broken down they are unable to absorb any ultraviolet light so we experience more intense UV radiation at the earths surface.”(Depletion of the Ozone Layer)
In 1990, President George H. W. Bush signed into law a set of amendments to the Clean Air Act. These amendments did several things, the most important of which was phasing out CFCs and establishing cap and trade for certain emissions linked to acid rain, such as SO2 and NOx. These laws virtually eliminated the acid rain problem in America. The 1990 amendments to the Clean Air Act phased out CFCs, and CFCs were finally banned in the United States in 1996. As a result of banning CFCs, the hole in the ozone layer has started to fix itself. As of 2017, the hole in the ozone layer is the smallest it has been since 1988. The cap and trade policy went into effect in 1995. In five years, SO2 emissions decreased by 40%. As a result of cap and trade, acid rain has been greatly reduced and is no longer regarded as a newsworthy crisis. The establishment of the Environmental Protection Agency and legislation such as the Clean Air Act has greatly improved air quality, reduced smog, and helped slow mankind’s destruction of the natural world.
I still consider myself to be somewhat of a libertarian, which is why I am attracted to both cap and trade and the fee-and-dividend approach to emissions taxes. Cap and trade is a market-based approach, making it much preferable to a central-planning approach. Although this approach does entail intervention in the marketplace, it still allows market processes to determine the most cost-effective ways of bringing about the desired change.
“The great advantage of cap and trade systems is that they’re market based, allowing the private sector to determine the most cost-effective ways to cut emissions. They work exactly the way they sound. An emissions cap is set for the area covered by the program, typically as an allowed weight of output. These caps are often set to ratchet down over time to meet emissions reduction goals. Then permits are allocated to the emitters…. If a company has more permits than it needs for its level of emissions, it can sell the excess. And if a company needs more permits, it can buy them. Because companies have a choice between cutting emissions and needing additional permits, the price of the permits will converge on the marginal cost of making those cuts; and that should mean the cost of the overall emissions reduction is the lowest it can be.”(Cap and trade system in 60 seconds)
My libertarian leanings also make me skeptical of handing more money over to the government, which is why I like the fee-and-dividend approach. With a fee and dividend approach, the revenue from emissions taxes do not go to funding more or bigger government. Instead, the revenue from the tax would go into a permanent fund and be divided up equally among all the citizens. Each year, every person in the country would receive a check or deposit for their share of the revenue generated by emissions taxes. This would be like the permanent fund in Alaska, where part of the oil revenue goes to fund a dividend to Alaskan residents.
I would like to see a combination of the cap and trade and fee-and-dividend approaches. I envision this working something like this: Every year the government sells a certain number of tradable permits and allows companies to transfer those permits by sale, but all the revenue from the original sale of the permits goes into a permanent fund for a citizen’s dividend. This approach would be libertarian insofar as it is a market-based solution and does not increase government revenue.
Sorry for the massive detour into wonky policy details there, but I needed to establish that carbon pricing (e.g. carbon tax, cap and trade, and such) is a policy proven to be effective at keeping emissions in check. Bernie’s climate policy is deficient insofar as it neglects carbon pricing. Carbon pricing was a major part of his 2016 platform but he has removed any explicit mention of it from his 2020 platform and has not mentioned it in public since beginning his 2020 campaign. Bernie seems to have been influenced by other Democratic lawmakers, like Jay Inslee and Hillary Clinton, who ended up rejecting the carbon pricing approach due to opposition from big oil. The problem is that the only alternative to carbon pricing is more authoritarian command-and-control policies, which the United States has been bad at historically. There is a need for command-and-control policies. That is, after all, how we dealt with the CFC problem, but to deal with carbon emissions in a command-and-control manner in an economy attempting to transition from fossil fuels to green alternatives would require Marxist-Leninist style central planning, which is neither feasible nor desirable. Unfortunately, the wording of Sanders’ plan seems to suggest that he does plan to have the EPA regulate carbon dioxide and methane in a command-and-control manner as it does with CFCs. This will be a much more difficult way to regulate carbon and will likely be ineffective.
Yang’s climate policy is superior to Bernie’s insofar as his plan not only includes carbon pricing but specifically includes carbon fee-and-dividend. Yang recognizes that the cost of decarbonization is going to hit poor and middle-class people the hardest, so he proposes a fee-and-dividend approach in order to make the transition easier. Sustainable energy sources and electric cars are going to be more expensive, so the revenue generated by the carbon tax that pushes us towards those more expensive alternatives needs to be given directly to the people who will need to purchase those products.
Nuclear Energy & Thorium
Bernie, like most people who aren’t well-educated on the subject, knows about Chernobyl and Fukushima but has probably never heard of thorium. He’s unaware that modern nuclear technology is nothing like the stuff they had back in the 80s. Even the older nuclear facilities in American can’t possibly meltdown like Chernobyl. They aren’t the same kind of nuclear power plants! But there’s also newer nuclear tech available that is much safer, has zero possibility of catastrophic failure, produces less waste, and is more effective. Yet, Bernie’s climate plan proposes to outright ban nuclear altogether!
Bernie plans to stop the building of new nuclear plants and shut down the existing ones. Such a policy guarantees that our energy needs cannot be met without relying heavily on fossil fuels. It is simply impossible to meet the energy needs of the United States with just wind, solar, hydro, and geothermal energy. Furthermore, the transition away from reliance on fossil fuels will require us to turn to electric vehicles. In order to build the infrastructure needed to phase-out vehicles that utilize internal combustion engines and burn fossil fuels, it will be necessary to upgrade our power grid and produce more electricity than we have produced in the past.
Thorium-based nuclear energy is the only feasible and clean means of producing enough energy to meet our needs during the transition. We do not currently have any other technology available that is capable of doing so. We need to invest massively in thorium in order to perfect clean nuclear technology, upgrade our power grid, and create the infrastructure to eliminate gas and diesel-burning vehicles.
The absurd thing is that Bernie’s plan does in fact propose to do away with conventional vehicles and “invest in nationwide electric vehicle charging infrastructure.” His plan also notes that “many of our homes still use dirty oil, propane, and fracked natural gas for heating and cooling” and proposes to “bring all non-electric uses of energy onto the electric grid.” (Cf. Bernie’s Climate Plan) It simply isn’t feasible to expand the use of electricity that much while cutting reliance on both fossil fuel and nuclear. Sanders’ plan to rely entirely on wind, solar, hydro, and geothermal is unrealistic. Every country that has tried to decarbonize by relying on those methods has failed and every country that successfully decarbonized did so by relying heavily on nuclear energy. (Cf. Michael Shellenburger, We Don’t Need Solar And Wind To Save The Climate — And It’s A Good Thing, Too)
Andrew Yang’s climate plan is realistic and takes these things into consideration. The following is found in Yang’s climate plan:
“With modern reactors, safety is drastically increased, and nuclear waste is drastically decreased. After the completion of the Manhattan Project, America explored the option of using thorium as a potential source for civilian nuclear power. In the 1960s, the United States experimented with a thorium reactor to generate power, but the project was shelved in the 1970s. All the while, research into nuclear fusion devices continued in labs throughout the US.
Why did we go with uranium instead of thorium? Uranium is used in nuclear weapons; thorium isn’t. Yet another benefit to using thorium as a power source!
Thorium reactors have a few key advantages over traditional uranium reactors:
One ton of thorium could potentially produce roughly 200 times more energy than one ton of uranium and 3.5 million times more energy than one ton of coal.
There is roughly 3 times more thorium on Earth than uranium, and we are already mining it as a byproduct of other rare-earth element mining. Right now, we’re literally just burying it back in the ground.
Thorium mining is substantially safer than uranium mining — thorium’s primary ore, monazite, is retrievable from open pits which receives greater ventilation than the underground shafts from which uranium is mined, decreasing miners’ exposure to radon.
Thorium reactors produce less waste than uranium reactors. Thorium waste remains radioactive for several hundred years instead of several thousand years.
Thorium-based molten salt reactors are safer than earlier-generation nuclear reactors, and the potential for a catastrophic event is negligible, due to the design of the reactor and the fact that thorium is not, by itself, fissile.
Nuclear isn’t a perfect solution, but it’s a solid solution for now, and a technology we should invest in as a stopgap for any shortfalls we have in our renewable energy sources as we move to a future powered by renewable energy.”(Yang’s Climate Policy)
Geoengineering, Carbon Capture, and Sequestration
Bernie’s plan asserts, “To get to our goal of 100 percent sustainable energy, we will not rely on any false solutions like nuclear, geoengineering, carbon capture and sequestration…”(Bernie’s Climate Policy) But carbon capture is a thing! It’s not a fake solution. It is possible to capture CO2 from the air and put it back into the ground. We’ve already failed to reduce our emissions to the extent we needed to have reduced them by now. If we want to keep global warming in-check, we’re going to have to rely on things like carbon pricing to reduce our emissions and carbon capture to undo some of the damage we’ve already done.
I will grant Bernie Sanders that solar geoengineering does fall more into the “false solutions” category, unlike nuclear and carbon capture. Solar geoengineering is not a good solution to the climate crisis. However, it is worth researching so that the technology can be made available in case future generations have to use it — i.e. it should be explored in case the other options fail. It should be a last resort option, but it should not be taken off the table entirely. At this point, we still have time to deal with the climate crisis using less drastic measures.
Yang’s climate plan proposes large government investment in carbon capture technology. And, with regard to the more radical geoengineering options, Yang’s plan proposes that we do research into it in case we ever have no other option:
“These techniques don’t work as a replacement to moving to renewable energy…. However, we should investigate geoengineering in case we can’t change our behaviors fast enough to ward off the worst of climate change. We also don’t fully understand our planet and climate, and we could hit a tipping point that would warrant more immediate and extreme action on a faster timeline.”(Yang’s Climate Policy)
Is Bernie’s Plan Affordable?
Actually, yes. The estimated cost is $16.3 trillion over a 15 year period. That makes the cost less than $1.09 trillion per year. With a GDP of well over $21 trillion, a program of this size is totally affordable and it could be paid for without a significant tax increase for the poor and middle class. A 5% land value tax would cover the cost with well over a trillion dollars to spare. Alternatively, the revenue could be raised with a 10% value-added tax (which would be less than half the standard VAT in European countries). So, Bernie’s climate plan is entirely affordable and could easily be paid for either with a single tax or with some combination of multiple smaller taxes. It is also worth keeping in mind that the full cost does not even have to be raised. As I’ve explained elsewhere, the purpose of taxation is to check inflation rather than to fund government spending, so the government seldom needs to generate enough revenue to pay for the full cost of its spending.
Recommendations to Fix Bernie’s Plan
I have already noted the biggest deficiencies in Bernie Sanders’ climate plan. I would like to make this criticism more constructive by offering four proposed modifications that would make his plan better. I’m fine with the bulk of his spending proposals and with his ideas about modernizing the electrical grid, switching to electric vehicles, etc. (Spoiler alert: these four changes would make Bernie’s plan look a lot more like Andrew Yang’s platform.)
#1: Add carbon pricing to the plan
As I’ve already mentioned, carbon pricing is a proven policy. It is absolutely essential to any sound climate plan. My recommendation would be a cap and trade plus dividend approach. Cap and trade would essentially be a carbon tax reworked as a tradable permits scheme. Whatever the goal for maximum emissions is for the year, the government issues permits only for that much. Companies then buy their permits from the government. If one company ends up with more permits than they need, they can sell their remaining permit to another company that has less than it needs. The government could also charge a 10% tax on the transfer of permits. The revenue from the permits and the transfer fees could be divided up evenly and distributed out to citizens as a dividend. This dividend would make the transition somewhat easier on the poor and middle class.
#2: Add carbon capture to the plan
Additionally, we should invest $50 billion dollars in carbon capture projects. We should invest in existing carbon capture technology and in research towards improving carbon capture techniques. Carbon pricing will only allow us to reduce our emissions and, hopefully, reach zero emissions within the timeframe set by the climate plan. However, carbon capture allows us to remove carbon pollution from the air and could potentially allow us to reach a negative rate of carbon emission. We need to recognize that other countries may fail to reduce emissions as much as we need them to, so it may be on us to make up the difference by pursuing a negative emission rate policy.
#3: Add thorium nuclear to the plan
We should invest $50 billion in thorium-based nuclear technology. Nuclear energy is the only energy source that is reliable and is guaranteed to meet our energy needs during the transition.
#4: Add a funding component to the plan
I would propose the following plan to fund the program. Impose a 5% land-based income tax — this would be a modified land value tax imposed on income from land. This modified land value tax (LVT) is preferable to a conventional LVT for two reasons: (1) ordinary LVT is a direct tax and would require apportionment, which would render the LVT entirely useless, whereas the 16th Amendment allows Congress to “ lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States,” and (2) land-based income tax would not be collected from ordinary homeowners unless/until they derive income from that ownership — you would only pay the tax if/when you rent the property out or sell it. Since the land-based income tax represents no tax increase for normal homeowners, it would receive less pushback than a conventional LVT would. Furthermore, it could be imposed without requiring a Constitutional Amendment. A conventional 5% LVT would produce $2.17 trillion in revenue each year. Assuming that 90% of the revenue from residential property is lost by switching to land-based income tax, our modified version would still produce $1 trillion per year in revenue with a 5% tax rate. Then we should impose a 10% value-added tax (VAT), which would produce $1.12 trillion per year in revenue. Then we should impose a 70% top marginal income tax rate on incomes of $10 million per year or more. (For those who don’t know how marginal tax rates work, the 70% rate would not apply to the first $10 million dollars but only to income after that amount is reached— this means that the tax increase on an income of $10,000,001 would be just $0.70 per year.) This would generate $70 billion per year in revenue. That comes to a total of $2.19 trillion per year in revenue. If you subtract the cost of Bernie’s plan ($1.09 trillion) and the cost of my additional spending ($100 billion), you are left with an excess of $1 trillion in revenue. That’s enough revenue left over to give the bottom 50% of the population a cash transfer (subsidy) of $5,000 per year. This isn’t how I would propose distributing the excess money, but is just to give you an idea of how much is left. The best way to distribute the money would be via a Negative Income Tax (NIT) that guarantees everyone a minimum income. This minimum income guarantee via NIT would render the 10% VAT progressive and lessen the tax burden on the poor and middle class — this would be analogous to Yang’s VAT+UBI approach and would be progressive for the same reasons, as I’ve explained elsewhere.
With the four changes proposed above, Bernie’s platform would begin to resemble Andrew Yang’s. Andrew Yang’s platform is the basis for my critique of Bernie’s plan. However, the land-based income tax proposal is my own and the 70% top marginal income tax rate idea is borrowed from Alexandria Ocasio-Cortez. The lack of any land value tax proposal and the lack of any proposal for an extremely high top marginal tax rate are deficiencies in Yang’s platform that I hope will be corrected before he launches his 2024 campaign. Nevertheless, even with these deficiencies, Yang’s platform is infinitely better than Bernie’s.
