Practice our laser talks:

Learn to speak about climate change like an expert.

PAIR AND SHARE: Practice the laser talks with a partner over coffee.
MIRROR WORK: Rehearse them in front of a mirror.
PICK AND CHOOSE: Practice the laser talks that interest you the most – you don’t have to learn all of them.  If you are new to Citizens’ Climate International learn the carbon pricing ones first and try to internalize two to three laser talks a month. By six months time you will have absorbed the key laser talks.

Note that the laser talks are not meant for people to present as monologues. The real purpose of the laser talks is to facilitate a discussion on climate change with our political representatives, the media, and the public.

 What is carbon pricing?

Carbon pricing refers to policies that make it more expensive to pollute—ideally making polluters pay more to do business in such a way, without creating economic difficulties for everyone else.

A carbon price, or price for pollution, can be applied at various points, as fuel moves through the economy:

• upstream (on the raw material—coal, oil, or gas);
• midstream (on refined and processed fuels and other products);
• downstream (where fuels generate emissions).

Applying the price upstream is the most direct way to ensure the cost of polluting is paid by those doing business with polluting fuels. They may “pass through” that cost to other businesses and to consumers. To avoid pass through costs falling on households, small businesses, and community economies, revenues from a carbon tax can be returned to those affected, or to everyone.

Carbon pricing policy options include:

• Carbon tax—a direct tax on pollution, which can be upstream, midstream, or downstream.
• Climate income—a carbon fee paid as far upstream as possible, with all revenues returned to households in regular checks or bank deposits.
• Emissions trading—usually including a limit on the overall amount of pollution, with polluting businesses allowed to trade pollution permits, to facilitate their transition to clean energy systems. An emissions trading system, or ETS, is usually assessed midstream—on power companies, for instance.
• Border adjustment—a carbon price assessed at the border, to ensure goods and services originating in countries that don’t price pollution aren’t artificially cheaper than goods and services that pay the costs of pollution.

There are variations on each of these, and it is possible to have a carbon price that uses more than one of these options. It is also possible to use regulations to impose costs without a direct carbon price; this is less economically efficient and tends to mean pass-through costs are higher. In the absence of carbon pricing policy, we still pay for pollution; a study published in June 2022 found that inaction to curb climate change would cost the world $178 trillion over the next 50 years.

It is worth noting: a carbon tax is different from a fuel tax or gas tax. A fuel tax is often used to create a pool of public funds that can help to sustain infrastructure related to the vehicles using the fuel. Revenues may be devoted to maintaining highways, or subsidizing mass transit to reduce congestion. A critical difference is that a fuel tax is not intended to phase out the use of that fuel, whereas a carbon tax aims to reduce overall use of the fuel and eventually to phase it out entirely.

Because climate change is imposing devastating costs on people, economies, and nations, it will be increasingly important to enact policies that make polluters pay the full costs of their business activity. Nations can work together in bilateral or multilateral cooperative arrangements to participate in shared emissions trading systems or to align carbon taxes and other policies, to increase the economic efficiency of their energy transitions.

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Carbon Pricing Around the world 

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Carbon Fee and Dividend a.k.a. Climate Income

Carbon Fee and Dividend is a carbon price that is revenue-neutral (meaning that the revenues do not go to government coffers). It is also known as Climate Income. It functions as follows:

1. A fee is placed on carbon-based fuels at the source (well, mine, or port of entry).
2. This fee increases steadily each year so that clean energy is cheaper than fossil fuels within a decade.
3. All the money collected is returned to Canadians on an equitable basis.
4. Under this plan, most Canadian households would break even or receive more in their dividend than they would pay for the increased cost of energy, thereby protecting the poor and middle class.
5. A predictably increasing carbon price will send a clear market signal, which will unleash entrepreneurs and investors in the new clean-energy economy.
6. Border carbon adjustments are eventually enacted in partnership with climate-friendly nations to protect vulnerable domestic industries while incentivizing other countries to price carbon.

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Carbon Border Adjustment Mechanisms (CBAM)

Our Carbon Fee and Dividend policy has a provision built in to protect trade competitiveness: a “Carbon Border Adjustment Mechanism” (CBAM) imposed on carbon-intensive trade-exposed goods  that cross our border in either direction. Products imported from a country that does not bear a carbon price equivalent to ours will have to pay a surcharge to make up the difference. Conversely, a domestic-made product exported to such a country will get a refund for the carbon fee associated with its carbon footprint.

This CBAM prevents domestic manufacturers from being put at a competitive disadvantage in global markets because of the fee. It will also remove the incentive for them to relocate overseas to avoid the carbon fee. In addition, it will encourage foreign countries to adopt their own carbon fee, so they would get the money instead of us. Carbon Fee and Dividend’s CBAM is designed to comply with international trade law.

Note that the CBAM applies only to carbon-intensive products, not fuels. As well, considerations of common but differentiated responsibilites must be at the core of all CBAM design and intrinsic carbon pricing.

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Canada’s Greenhouse Gas Pollution Pricing Act

In June 2018, the Greenhouse Gas Pollution Pricing Act achieved Royal Assent and became law of the land in Canada. All provinces and territories must have a carbon pricing policy of at least $20 per tonne by January 1, 2019, raising $10 per tonne each year until 2022, with the flexibility to have their own carbon pricing systems which are equally stringent as the federal Backstop Carbon Pricing system. In 2021, the federal government updated its policy on recognizing the stringency of provincial carbon pricing systems and the price will rise incrementally to $170 tonne by 2030. In jurisdictions that do not have equivalent carbon pricing policies, the Federal Backstop Carbon Pricing system will apply.

There are two elements of the federal carbon pricing policy:

1. THE FUEL CHARGE: A charge on fossil fuels that is generally payable by fuel producers or distributors, with rates for each fuel that are equivalent to $10 per tonne of carbon dioxide equivalent (CO2e) in 2018, rising by $10 per year to $170 per tonne CO2e in 2030. The carbon fee for the federal backstop policy is revenue-neutral. Between 2019 and 2021 the revenue was recycled back to the citizens in their income taxes under line 449 “climate action incentive“. Starting in 2022, in provinces where the federal backstop Fuel Charge applies (currently, Alberta, Saskatchewan, Manitoba, and Ontario), will include quarterly payments at the beginning of each quarter.  To give the Canada Revenue Agency sufficient time to develop the new system, payments started in July 2022 with a “double-up” payment. Thereafter, payments will be quarterly. Of note, 80% of households come out ahead, a finding confirmed by the Parliamentary Budget Office and Clean Prosperity.
   Update: In July 2023, the Climate Action Incentive cheques will be coming to Nova Scotia too. This was announced in late August 2022 when Premier Houston’s climate plan was rejected. In November, it was also announced for Prince Edward Island, Newfoundland, and Labrador too.
2. OUTPUT-BASED CARBON PRICING: For businesses and industries that qualify, are enrolled in an Output-Based Carbon Pricing System. They pay a carbon price based on their emissions’ intensity relative to the best in the class of their industry, and surplus credits are traded. This component of the act protects emissions-intensive trade-exposed industries from trade pressures and carbon leakage. However, it does not send a strong enough signal to transform Canada’s energy systems to carbon decarbonize in alignment with the realities of the climate emergency we face. This assertion is supported by research by Clean Prosperity and the Parliamentary Budget Office. CCL recommends that the carbon price should be economy-wide and thus the Output-Based Pricing System should be temporary, and ultimately replaced with Border Carbon Adjustments.

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Klimabonus

Question: What is Austria’s Klimabonus ?

Answer: In autumn 2021, the Austrian Government introduced an “eco-social tax reform” with a goal to achieve NetZero by 2040. The main tool of this package is a national carbon fee applied on fossil fuels. The national scheme does not replace energy taxes, it’s in addition. It prices emissions outside the pre-existing EU-ETS by covering transport and buildings which accounts for a further 40% of GHG emissions.

The Carbon pricing structure follows the logic of the EU Energy Taxation Directive (ETD), an “upstream” tax on production and importation. Products include: petrol, diesel, heating oil, coal, and natural gas, but the list could be expanded. Electricity is not subject to the policy because power plants above 20 MW of thermal output are covered by the existing EU-ETS.

Initially, it will follow the following price path: €30 in 2022; €35 in 2023; €45 in 2024; and €55 in 2025. In 2026 it will align with the EU wide policy. This might become a market with allowances, like the EU-ETS, or it may be allowed to continue as it meets acceptable criteria. This will likely be defined in 2025.

The Income (Dividend) is called “Klimabonus”. Austria has a great website for public explanation that directly promotes the financial benefit of choosing “climate friendly behaviour”. It is paid to all residents in Austria and rebates 100% of the carbon tax. In 2022, this is an equal payment of €500 per adult and €250 per child, and included a 2022 anti-inflation payment of €250. In 2023, regional access to public transport will be factored in. The bonus will increase as the carbon tax revenue increases.

There are some compensations for industry covering: Agriculture and forestry. Sectors exposed to carbon leakage can get partial refunds; especially energy intensive industries identified in the EU as “at risk”. Also, particular “hardship” cases can be made.

There are a set of related policy and tax changes to help with the transition that include:

• Lowering of labour taxes.
• Reduced burden on families with children.
• Reducing Corporate Income Tax in 2024.
• Reduced Tax for ecological measures for Corporations from 2023
• Home heating and insulation tax benefits.
• Home produced electricity tax benefits.
• All public transport in Austria with a single KlimaTicket.

The Austrian Klimabonus (Climate Income) is a model policy for other EU Member States to copy under the EU Green Deal (Fit for 55 legislation).

More info on the Klimabonus

Question:  Is there any extra info on the Klimabonus system?

Answer: The Austrian government made it clear that every euro taken from the national ETS will be given back to the citizens through the Klimabonus. This makes sure that the increase in price by national ETS is sustainable for the population.

The Klimabonus is given to all citizens resident in Austria. Adults receive a full part, while children under 18 receive a half-part. The Klimabonus is distributed yearly, through bank transfer or physical cheque for those who don’t have a bank.

People living in rural areas use their car more and have a bigger house to heat up. To compensate for this reality, the Klimabonus will be varied to take account of geographical criterias. Two criterias are taken into account: the urban density (how far do I have to travel to go to the supermarket or the children’s school) and access to public transport (e.g. train or bus availability). The increase in the Klimabonus goes from +33%, +66% to +100%. A family living in a rural area can have up to twice the basic amount.

The Klimabonus was distributed for the first time in 2022. Exceptionally, the amount of the Klimabonus was brought up at 250€, and was complemented by a 250€ anti-inflation payment. Starting 2023, the amount of the Klimabonus depends mechanically on what has been paid through the national price increase. The estimates are around 100€ per adult per year. In 2023, an urban family of four is expected to receive 300€, and the same family in the countryside up to 600€. As the carbon price will progressively rise, the annual amount of Klimabonus will rise mechanically.

The Klimabonus is a smart way to make the national Carbon Price sustainable. Recycling the money throughout the Klimabonus guarantees the transparency and the sustainability of the system. Moreover, the Klimabonus is increased for people living in rural areas, which makes the measure more fair.

Laser Talk: Why We Support the Bridgetown Initiative

We all know the importance of balancing the books. Thus, it is not an exagerration to think that our global economy is on the verge of collapse. Dividends are being paid out, but at the expense of people and planet.  Our financial operating system is out of date.  We’ve ignored the notifications for so long that inequality and climate catastrophe are affecting our daily lives.  We need to invest to heal inequalities, restore health to the planet and build resilience to future crises.

Barbadoes Prime Minister Mia Mottley’s Bridgetown Initiative would address immediate fiscal concerns and increase vulnerable countries’ resilience to shocks. It is gaining support and beginning to work.

Many of the Bridgetown initiatives require no financial transfers from developed country taxpayers. They are based on the concept that if ideas change minds, then the global economic system will change for the greater good:

• Developed countries can exercise influence to push the World Bank and other multilateral development banks (MDBs) to better leverage their balance sheets. Recommendations from a G20 expert group could leverage an additional $1 trillion for climate and development finance.
• US and European leaders can deliver promises of emergency liquidity using $100 billion of Special Drawing Rights, through the International Monetary Fund and MDBs creating fiscal space in developing countries, quickly, and without harmful conditions.
• Create a Loss and Damage funding mechanism will support climate equity at the UN climate conferences. Political support for the UNSG proposal to tax windfall profits from oil and gas exports could be an important first step.
• Innovative funding mechanisms could unlock additional political capital for a paradigm shift in resource mobilization. A Global Climate Mitigation Trust, borrowing on capital markets, backed by $500bn of Special Drawing Rights, donor guarantees, or similar instruments is another proposal.
• Heightened recognition of the nexus of climate and development stimulates new ways to engage the private sector. Innovative instruments (debt for equity swaps, state-contingent debt instruments, regional guarantee platforms) provide financing options for recipient countries, including the use of instruments that incentivize private finance, and could stimulate increased South-South investments.

February 2023 Laser Talks: Bretton Woods Reforms  and Integrity Matters

Bretton Woods Reforms

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Integrity Matters

For the curious-minded:

• Want to dive deeper and learn about authentic, explicit and implicit carbon pricing as well as the intricacies of Article 6.8 of the Paris Agreement  – then peruse this handbook made in the summer of 2022. 
• CCL USA has a Laser Talks Directory listed under six categories: Climate Science, Impacts, Policy Design, Technology, Politics, and International. Go here for more information.
  
• CCL Canada has a webpage dedicated for Canadian Laser Talks.
• CCL Europe is building their own regional specific ones here.