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Personal Carbon Allowances: Enviros’ Unified Theory of Control

William L. Kovacs

March 2023

Personal Carbon Allowances: Enviros’ Unified Theory of Control

For decades environmental think tanks have been developing a theory called Personal Carbon Allowances (“PCA”). It is a unified Marxist style theory that seeks to use government to control the asserted destructive impacts of capitalism, such as climate change, poverty, and the lack of Diversity, Equity, and Inclusion (“DEI”). A recent report in Nature Sustainability writes, “A PCA scheme would entail all adults receiving an equal, tradable, carbon allowance that reduces over time in line with national targets.” Individuals not needing their carbon allowances could sell them to those willing to pay for a more carbon intense lifestyle.

The goal of a PCA is to develop “a just and equitable transition to a net-zero society,” in which the social norm is low-carbon behavior. PCAs would encompass economy-wide emissions. PCAs’ endpoint is to redistribute wealth by making low-income households winners and high-income households losers.

The environmental community never believed PCA would be publicly accepted until the Covid pandemic. Environmentalists realized during the pandemic, the public accepted individual restrictions for the sake of public health, something unthinkable only one year before.

Big business, banking, academia, and the super-rich (“the Woke Coalition” or “TWC”) realized that if they supported the environmental and social movements, those groups would support their efforts to rob the proverbial bank; the federal government.

Environmentalists’ and the TWC persuaded the federal government to authorize $370 billion in subsidies for green technologies and dramatically stymie the nation’s fossil fuels industry. These activities are in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in subsidies for green technology since 2004.

While the TWC members joyously swim in government benefits, they do not grasp the environmentalists’ end game is to reorder society by redistributing all wealth to make everyone equal. This equitable correction of wealth inequality will be administered to create a deliberate imbalance in favor of marginalized groups.

PCA is not Marxism which is about changing the ownership of the means of production. PCA is about eliminating the means of production. Moreover, their direct quotes contained in The Left’s Little Red Book on Forming a New Green Republic advocate for the massive reduction of the human race.

Phase I limit human behavior.

The Climate and Community Project at the University of California, Davis, issued a study describing how to achieve nirvana. It proposes reducing the use of cars, even in the suburbs, by forcing high-density urban living on all people. Transportation would be bicycling, walking, and building mass transportation everywhere. Almost everyone would live in a small apartment in a “livable neighborhood.” This plan would force the displacement of millions of rural Americans. Let’s call this “brilliant” idea “The Great Resettlement,” a softer label than a “21c. Trail of Tears.”

Phase II create a trading market

PCA will redistribute trillions of dollars through the buying and selling of allowances. Environmentalists understand success rests upon redistributing the wealth of the top 10% of society that generates one-half of all greenhouse gas emissions. While the environmentalists believe the wealthy must pay for the greenhouse gases that destroy the environment, TWC plays along for the generous government subsidies.

How the trading system might be structured.

The literature on PCAs describes many approaches. The final trading system will depend on. The U.S. generates 5 billion tons of CO2 annually, or 15.5 tons per person. On average, the bottom 50% of the income level emits 10.4 tons, the middle 40% emits 21.8 tons, and the top 10% emits 68.8 tons. The CO2 emissions of the wealthiest 1% could be in thousands of tons, depending on lifestyle.

Using these averages, the lower-income 50% of the U.S. population (61 million people) would each have 4.1 allowances to sell and still maintain their standard of living. Persons in the middle class, 40% of the population, would need to purchase 6.3 allowances to maintain their lifestyles. The top 10% of the wealthy would need to buy an additional 55.3 tons of allowances to maintain their lifestyles. In PCA, it appears there would not be sufficient allowances to provide the middle class and the wealthy all the allowances sought. CO2 reductions would begin even before the government wretches down the individual allocations.

In 2023 the U.S. poverty level is set at $14,680 for an individual. To achieve several goals, CO2 reduction, eliminating poverty, and fostering DEI, an initial allowance price of $4,000 per ton would lift tens of millions above the poverty level by selling their extra allowances to the middle and upper classes. Each poor person would receive approximately $16,400 from the sale of their 4.1 extra allowances.

The average middle-class person would have to purchase 6.3 allowances, a $25,200 purchase, to maintain status quo living. On average, a person in the top 10% would have to purchase $213,200 of additional allowances. The super-wealthy might need to buy thousands of allowances to keep their private jets, mansions, and global lifestyles. At $4,000 an allowance, the cost would be $ 4 million per year for 1000 allowances. A Bill Gates lifestyle is incalculable.

If the 1,760,941 individuals in the top 1% purchased, on average, 1000 allowances, they would be contributing $176 billion a year to eliminate poverty, foster equity, and dramatically reduce CO2 levels. The cost of the pollution allowances is a mere drop in the top 1%’s  $45.9 trillion proverbial wealth bucket.

As PCA reduces the economic activity that produces CO2, the government will have less revenue available for subsidies to TWC. Fewer subsidies for TWC will create an existential crisis concerning their survival. The environmentalists will be pleased with the economic decline since there would be fewer products produced and less CO2.  As TWC loses more of its customer base, its wealth and influence will proportionally diminish.

Paraphrasing Fyodor Dostoevsky, I sense vaguely that the TWC is going to pay dearly for supporting the environmental and social movements.

William L. Kovacs is the author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and, The Left’s Little Red Book on Forming a New Green Republic. He is a former senior vice president at the U.S. Chamber of Commerce for Environment, Technology & Regulatory Affairs.