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Pitch

Cheap natural gas and Allam Cycle give US businesses an immediate edge, should the US adopt carbon tariffs as part of a carbon dividend.


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Summary

What an American President (or candidate) could say, "Carbon tariffs will make America great again.  Its so much easier to win a carbon tariff war, because the other countries cannot complain.  If they complain, their climate change preaching appears hypocritical.  Plus, they would have to admit that American has the best workers, engineers, and scientists.

Sure, we'll need a carbon dividend as big as out carbon tariffs.  But Americans and American business gain huge historic advantages over other countries because:

1) The carbon dividend money stays in the US building new American businesses.

2) The US has cheap abundant natural gas for low-carbon electricity and oil energy independence.  Both keep carbon dividend money circulating in the American economy.

3) The US has the best workers, engineers, and scientists.  One example - Fracking was invented and developed in the US and is what gives us cheap abundant natural gas and oil energy independence.  Second example - The US (with Japan) is leading the race to make electricity (from natural gas) with the Allam Cycle.  The emissions from Allam Cycle electricity are clean water and liquid CO2.  Liquid CO2 is relatively easily sequestered."


Is this proposal for a practice or a project?

Practice


What actions do you propose?

Get American politicians seriously talking the advantages of carbon tariffs and carbon dividends from both sides of the aisle.  Republicans might emphasize defense by asking DTRA-DTRIAC to evaluate the opportunity for the U.S. to counter Weapons of Mass Destruction and Improvised Threat Networks with a MAGIC (Make America Great Innovating with Carbon) tariff?

A carbon tariff is derived from a carbon dividend or tax. Carbon dividend income is a fee collected on fossil fuels as they are mined, exit the well, or are imported. The carbon tariff is proportional to the carbon footprint of the product as manufactured or produced in the country of origin. Chinese goods would have a large carbon footprint because most of their electricity is from coal.

Countries in the Paris Climate Agreement briefly considered carbon tariffs to punish the U.S. for leaving the Agreement[1]. They will be paralyzed to object even as U.S. businesses gain an immediate and substantial advantage from both the tariff and the dividend. This because U.S. natural gas and oil is cheap relative to their cost in most countries. As demand for fossil fuel drops, the same American Ingenuity that created cheap gas and oil with fracking will find ways to make cheap renewable energy. You might want to involve the Department of Energy’s Advanced Research Projects Agency-Energy to confirm U.S. technology advantages.

The U.S. trade deficit is about $800 billion/year. A carbon tariff could be set up to collect 20% or $160 billion/yr. (The deficit with China alone is $400 billion.) Meanwhile, the U.S. carbon dividend reduces fossil fuel consumption in the U.S. so that the U.S. can export carbon-pre-paid oil, gas, maybe even coal. The oil funding of ITNs dries up. Might not even need sanctions on Iran to kill their WMD efforts.

You’ll want to game questions for the MAGIC tariff: Will oil exporting nations destabilize with the sudden loss of income? More adversely to the U.S. than climate change migrations? What happens in North Korea if China and Russia are hurting for cash? Will Russia and China pull back as the oil and gas reserves in the Ukraine, Siberia, under the Arctic Ocean, and under the South China Sea become worth less?

Will the MAGIC tariff wars be such a boost for the U.S. economy that the 2018 tax rules collect enough to pay down the national debt? Keeping the dividend and tariff simple will help. Try a model where government overhead is less than 0.00001%. That might involve using existing fossil fuel company accounting and income tax to collect the income. Then return 99.99999% of the income back to corporations and individuals proportional to the income tax they have paid.

 

[1] https://www.belfercenter.org/publication/us-withdrawal-paris-agreement-economic-implications-carbon-tariff-conflicts “Key remaining parties to the Agreement such as Europe and China might call for carbon tariffs on US imports as a sanctioning instrument to coerce US compliance. … carbon tariffs do not constitute a credible threat for the US. A (carbon) tariff war … China, in particular, should prefer US defection to a (carbon) tariff war.”

(Note: The simple act of Congress or White House talking positively or negatively (but seriously) about US unilateral carbon tariffs makes fossil fuel reserves worth less.)


Who will take these actions?

1) People concerned with climate change who recognize how to make win-win deals by seeking to satisfy the needs of the "other side".  First, listen to the musical play “Hamilton” and watch the movie “Lincoln.” Then create a “room where it happens” to make win-win compromises.

Historic example - A couple centuries ago and again in the hit play “Hamilton”, President Washington told Hamilton to “work it out” with Jefferson. They and a few others met in a private “room where it happens” and made a win-win deal. The deal involved completely unrelated goals. The fledgling United States of America got the Finance system Hamilton championed and our capitol in what became Washington, D.C. as the South wanted.

2) American politicians messaging to their base.

3) Ideally, other world leaders will need to complain bitterly, particularly the ones with the most to lose: Russia, China, Iran.  Our friends will also be screwed, but they won't want to admit their workers and businesses are not up to the challenge.  


Where will these actions be taken?

The first actions are in the US House, Senate, and White House.  Then injected into the 2020 elections.

Reactions will happen throughout the world.

 


In addition, specify the country or countries where these actions will be taken.

United States


Country 2

No country selected


Country 3

No country selected


Country 4

No country selected


Country 5

No country selected


Impact/Benefits


What impact will these actions have on greenhouse gas emissions and/or adapting to climate change?

The world will get to zero fossil fuel use as early as 2040.

CO2 emissions increased in 2018.  This is because world leaders are reluctant to put their country's businesses at a disadvantage or impose hardships on its people.  Witness the riots in Paris by the "yellow shirts."  Everyone talks.  Very few actually "walk the talk."

The US is well positioned to start a global war on climate change.  With the US as the "bad guy", other world leaders can motivate their citizens to tolerate similar carbon dividends and carbon tariffs.  Everyone will have to "walk the talk". 


What are other key benefits?


Costs/Challenges


What are the proposal’s projected costs?

The US makes out with perhaps a US$trillion/year for a few years.

Other countries lose perhaps a US$trillion/yr to the US for a few years.

Eventually things level out.


Timeline

Immediate (in 2019) fossil fuels in the ground become worth less.  Investors will start staying away from fossil energy projects.  Might even stop the huge coal power plant being built in south east Bangladesh.

Short term - Its like a war.  People and governments throw money to give their businesses an edge.  Meanwhile, zero money is going into fossil fuel infrastructure.


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