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Executive summary

Carbon Dioxide emission reduction can be achieved without any punitive measures using the powers of the market and consumer incentive. I call it the GREEN LEVEL RATING system.

Companies who choose to take advantage of this process would agree to public monitoring of their facilities and relevant records. They would then choose to do all or some of the following: purchase CO2-offset credits, buy CO2 sequestration machinery, switch to non-CO2 emitting systems or machinery, install properly calibrated CO2 emission measuring equipment to use in the reduction of their own emissions. The public monitors would check all equipment and / or relevant records and verify the efforts. The company would then earn a GREEN LEVEL RATING in accordance with their efforts. This rating could be advertised to consumers, and would give consumers a rewards-style cashback dividend in accordance with the GREEN LEVEL RATING of the company (higher level, more cashback). These rewards would be paid out by the government in actual cash, not tax credits.

Team

The team is me, Jason Bennett. I'd also like to thank user ItsAConspiracy on Reddit for encouraging me to submit this proposal.

What: Actions and impacts

First the nation's government would have to approve monitoring organizations that claim to have no vested interest in the profits of CO2 emitting companies. It would be best that the organizations have the opposite interest (Sierra Club, for instance). It would be best if the ruling party approved an organizaiton, the minority party approved an organization, and the public approved an organization. All three organizations (or more) would participate in the monitoring process, either at random or collaboratively. I will reiterate this point many times: the government SHOULD NOT be the primary monitor of companies, as the government has vested interest in the profit of CO2-emitting companies due to the way campaign finance functions in many countries.

Second the companies who choose to participate in this process would need to purchase CO2-offset credits, CO2-sequestration machinery, non-CO2-producing machinery or systems, and / or CO2 emission measuring equipment to use in the reduction of their own CO2 emissions.

Third the monitoring organizations would need to examine at random intervals the equipment and relevant records of the companies choosing to participate in the process, verying that their equipment is calibrated correctly and that they are indeed making the efforts they claim to be making.

Once the monitoring organizations have verified that the companies have made a legitimate effort to reduce CO2 emissions worldwide, the government grants the company a GREEN LEVEL RATING of 1 through 10, (yellowish green through bright green), with 1 being some effort, and 10 being exceptional effort.

Consumers who purchase oil, coal, energy, etc. from a GREEN LEVEL RATED company will earn instant reward-style cashback on their purchase, either in the form of savings "at the pump" or in actual money mailed to them by the government, wirelessly delivered into their bank account, or given in the form of savings via collaboration with credit card companies. It is important that this saving NOT take the form of tax credits, as the saving needs to be instantaneous to have psychological value.

The rewards will scale exponentially in relation to the GREEN LEVEL RATING, with 10 being 100 times better than level 1. The goal is to have 8, 9, and 10 be standard ratings.

 

Why: Rationale for the proposal

The way to solve the CO2 emissions problem is to create positive feedback loops between government, companies, and consumers. Government has the ability to put money into these loops and provide incentive at low administrative cost.

Consumers who participate in the purchase of products from GREEN LEVEL RATED companies will see real savings instantly, NOT at tax time (which would delay the positive response far too long). This instant cashback reward-model has been tested with credit card companies and is extremely viable. They will also, should they care, experience a moral reward as participate in a valuable service for the environment. Some consumers care about this, some only care about their bank statement-- this process doesn't care what they care about and rewards both types equally.

Companies who participate will see higher brand loyalty among their customers as well as increased purchase of their product since it has been made more competitive. The more "green" they make their facilities, the better their bottom line. Profits would outstrip costs IF they correctly market their commitment and allow their customers to understand the incentive. This is an important point, as it places the onus on the companies to take advantage of the process and use their ingenuity instead of just receiving their government credits.

Governments who are friendly to business and help them generate greater profits based on their GREEN LEVEL RATING instead of their previous cost-saving measures will see greater campaign finance contributions and more public support for their policies.

The reason this plan will work whereas other incentive programs will fail is that it works at the consumer level instead of giving the incentives directly to business in the form of tax credits, carbon credits, etc. Putting the feedback loop into a system that operates via a recognized brand (the GREEN LEVEL RATING) that generates instant cashback, moral "cashback", and company loyalty at the consumer level will guarantee its success.

How: Feasibility of proposal

This proposal is feasible because it can scale to any size company, will encourage competition between companies that produce CO2 AND between companies that produce CO2 reducing equipment, and is not linked to any particular industry. It is also not limited to energy products, and could be applied to companies who want to be competitive in the sale of food, plastics, or any raw materials that depend on fossil fuels for production or transport.

The main difficulties will be administrative. The process of approving monitoring organizations will have to be transparent so that consumers know they can trust the GREEN LEVEL RATING as an accurate measure. Allowing the EPA or the CDC to monitor companies is nearly worthless in America, for instance, because most Americans know that these organizations are headed by whomever can deliver the largest profits via government subsidies or lax regulation, thereby guaranteeing the largest campaign contributions.

There will be government and industry efforts to game the system by approving organizations who have hidden vested interests in the profits of the companies. The only way to beat them at their game is to have at least three approved organizations-- one chosen by the ruling party, one chosen by the minority, and one chosen by the public via an offline or online voting system. These three approved organizations must then agree within a certain level of tolerance that the data from each company is correct. I can not emphasize enough that government CAN NOT assume oversight of this monitoring process, but can only approve monitoring organizations.

Once the monitoring organizations are approved, the second major obstacle will be government partnering with credit card companies and banks to seamlessly deliver instant cashback to consumers "at the pump". This should not be too hard, though, as the electronic infrastructure is already in place to make it quick and gratifying. It is imperative that this step not be replaced with any form of tax credit. The reward needs to be instantaneous or nearly so (within a day). Otherwise it is psychologically worthless to consumers and, ergo, the companies whose products they consume.

Costs for these services would be covered by higher income taxes for large corporations. With higher taxes across the board, companies who achieve very high GREEN LEVEL RATINGS would see profits far above the higher cut they receive through tax increase, whereas companies that choose not to would simply pay higher taxes and could seek to expand their business based on prior models.

Vision of the future under this proposal

Our current economic feedback loop on energy works thusly: companies who produce the cheapest energy have the highest profits allowing them to buy the most seats in government to ensure lax restrictions so that everybody gets rich, customers get cheap energy, and the environment gets screwed.

Efforts to change this model via punitive measures fail because it is too strong a feedback loop. There is simply no incentive to change it, no matter the moral failing of the system and its eventualy economic cost to future generations.

The process I have devised uses government to spark a different, equally viable feedback loop. By incentivizing the purchase of GREEN LEVEL RATED products for consumers, government delivers greater profits to companies by making their products more competitive. By approving monitoring organizations without vested interest, government creates a trusted brand in the GREEN LEVEL RATING system. In the long run, this will deliver greater profits to companies who use the GREEN LEVEL RATING system to their advantage, and they can, in turn, finance the campaigns of elected officials who will seek to deliver even greater profits (higher cashback incentives, etc.) Consumers save money, green companies get rich, dirty companies putter on or fail, politicians get their campaigns financed, and all running on the incentive for clean air, which occurs organically as companies compete for consumer purchases.