An elegantly modest proposal.
First, from the Rolling Stone article everyone is reading:
We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We’d have to keep 80 percent of those reserves locked away underground to avoid that fate. Before we knew those numbers, our fate had been likely. Now, barring some massive intervention, it seems certain.
Yes, this coal and gas and oil is still technically in the soil. But it’s already economically aboveground—it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide—those reserves are their primary asset, the holding that gives their companies their value. It’s why they’ve worked so hard these past years to figure out how to unlock the oil in Canada’s tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets. The numbers aren’t exact, of course, but that carbon bubble makes the housing bubble look small by comparison. It won’t necessarily burst—we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet—but now that we know the numbers, it looks like you can’t have both. Do the math: 2,795 is five times 565. That’s how the story ends.
Next, from a Guardian article on James Henry’s study, The Price of Offshore Revisited:
Despite the professed determination of the G20 group of leading economies to tackle tax secrecy, investors in scores of countries—including the US and the UK—are still able to hide some or all of their assets from the taxman.
“This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and—most importantly—to have very significant negative impacts on the domestic tax bases of ‘source’ countries,” Henry says.
Using the BIS’s measure of “offshore deposits”—cash held outside the depositor’s home country—and scaling it up according to the proportion of their portfolio large investors usually hold in cash, he estimates that between $21tn (£13tn) and $32tn (£20tn) in financial assets has been hidden from the world’s tax authorities.
The math is ineluctable, isn’t it. —Desperate times call for those most basic of government functions.
(Hell, considering how many of the super-rich doubtless depend on the value of the carbon on the books, it’s not even redistribution, per se: penalize Peter to pay Peter to keep Peter from roasting, drowning, starving Paul…)
