Setting labor-related taxes to zero, while taxing non-renewable resources, will incentivize commodity and service price increases, aligning them with their extraction costs. —
No 2743 Posted by fw, June 20, 2021—
“We have tried everything: political decisions, climate change conferences (COP 26 due in 2021), emissions rights trading, or taxing carbon, yet carbon emissions keep rising year after year, and carbon concentration in the earth’s atmosphere are ticking up like clockwork. Nothing suggests that this will change in the near future, despite all the renewed promises by governments worldwide. Yet the reason for this inertia is simple: the price we pay for fossil fuels, and most other non-renewable resources, is far too low, because we don’t pay for their creation which took hundreds of millions of years, but only for their extraction. To make matters worse, more than 90% of all taxes are paid on labor in most countries, which discourages employment and forces automation into every part of the economy. This mix-up, a by-product of the industrial revolution, leads to pollution, greenhouse gas emissions, waste production and the unnecessary use of automation, which damages our ecosystems and at the same time deprives future generations of their right to access those scarce resources. By going back to taxes on the use of non-renewable resources, the UnTax project wants to set this right, fixing almost everything that is broken about our way we deal with natural resources.” —Nate Hagens, https://www.untax.org/
The above excerpt is from Hagens’ UnTax.org website, NOT from today’s sixth Intervention and Wild Idea piece, which is reposted below. – But the theme and thesis are identical.
As an “About” reminder, Nate Hagens is a brilliant systems synthesist and well-known speaker on the big-picture issues facing human society. Before becoming a professor of an Honors seminar at the University of Minnesota, Nate was President of Sanctuary Asset Management and a Vice President at the investment firms Salomon Brothers and Lehman Brothers. He has a Masters Degree in Finance with Honors from the University of Chicago and a PhD in Natural Resources from the University of Vermont.
To recap, in the closing segment of his long video talk, Nate Hagens advances 12 “Interventions”, categories, along with a “Wild Idea” for each category.
In today’s repost, Hagens presents INCENTIVE as his sixth of 12 Interventions, along with his sixth Wild Idea: “UnTax all labor-related taxes; Tax all non-renewable resources.”
Below is my transcript of Hagens’ sixth Intervention and accompanying Wild Idea, which I have titled: “INCENTIVE: Sixth Intervention and (Wild Idea)”. As usual, I include in this repost an embedded video of Hagens’ almost 3-hour talk, packaged in 33 myths, which features a synopsis of key ideas from his past written works and videos. And at the bottom of the repost is a list of Hagens’ 33 myths, plus two others – Introduction and Interventions.
For those who would prefer to watch the embedded video on You Tube, click on the following linked title.
TRANSCRIPT of “INCENTIVE: Sixth Intervention and (Wild Idea)” (a short 2-minutes long, starting at the 2:33:56mark, ending at 2:36:06 )
INCENTIVE [Sixth Intervention and (Wild Idea)]
Right now global society is functioning as an energy-hungry mindless superorganism. Our goal of coordinating behavior towards profits is biological. But the vast majority of the profits are enabled by mining stored minerals and materials that are finite.
We can’t really change our behavior en mass unless we change our incentives. Said bluntly, we are vastly underpaying for the magic which is supporting our lifestyles and populations. And this is leading to depletion, pollution and waste.
At the same time, 95% of our current taxes are on human labor, not on the fossil armies doing most of the work.
A wild idea, which we’re working on, is to change the incentives on the prices of things to be more aligned with their real cost.
Implementing a tax on non-renewable resources, including fossil fuels, but also water from fossil aquifers, copper, neodymium, sand, and anything non-renewable on human time scales. This tax would be on the order of 50 to 90% and set roughly to the renewable, recyclable equivalent for that resource or service.
This would make things much more expensive, so would be countered by a removal of all taxes on human labor. The net effect for government revenue would probably be a wash*. We’re researching that now. [“a wash” — as a verb means: An activity, action, or enterprise that yields neither marked gain nor marked loss.”]
But human labor would be more competitive and it would encourage both conservation and innovation aligned with more likely futures. This simple idea would do more for climate change in the environment than any action of the last 50 years.
Quite simply, we are paying too little for the most precious input to our future and not paying anything for its waste and impact. This can change with a change in prices.
Bonus idea: I just described disincentives for bad behavior. We also need real incentives for good behavior.
2:36:06 — End of Sixth Intervention and Wild Idea
LIST OF THE 33 MYTHS (plus opening introduction and closing Interventions (and Wild Ideas)
Nate notes that the myths themselves are listed in reverse numerical order from #33 down to #1, while the time markers are in chronological order from beginning to end, which facilitates their quick and easy location on the video. The myths can be watched in any order, but the order they’re in made the most sense to Hagens. To go directly to the beginning of any numbered myth or to the opening Introduction and closing Interventions and Wild Ideas, just click on the linked time stamp.
Time stamps: 0:04 — Introduction 2:20 — Myth #33: The Experts Have ALL the Answers 4:16 — Myth #32: Humans Are Separate From Nature 6:45 — Myth #31: Humans Are Mostly Selfish 12:17 — Myth #30: More Is Better 18:12 — Myth #29: “Someday I’ll Have enough” 21:18 — Myth #28: We Care About the Future 23:38 — Myth #27: Everyone Has Their Own Truth 26:37 — Myth #26: Truth Matters 29:31 — Myth #25: Energy Is Merely a Commodity 34:28 — Myth #24: The American Dream is Based on Hard Work and Cleverness 36:05 — Myth #23: Oil: The USA Will Be the Next Saudi Arabia 41:46 — Myth #22: We Can Always Get More Resources if We Have More Money 44:42 — Myth #21: Renewables Can Power THIS Civilization 50:55 — Myth #20: In the future we wont need oil due to Peak Demand!! 55:01 — Myth #19: We Can Achieve Net Zero!! (by 2050 or any date) 59:54 — Myth #18: As Earth runs out of resources, We’ll Colonize Outer Space!! 1:02:26 — Myth #17: Growth Is Forever 1:05:04 — Myth #16: GDP Is the Right Goal for Society 1:10:56 — Myth #15: Overpopulation Is the Main Driver 1:15:21 — Myth #14: Technology Will Solve It 1:21:16 — Myth #13: The Environment Is Part of the Economy 1:24:04 — Myth #12: The Natural World Is Ours 1:27:03 — Myth #11: Climate Change Is the Core Problem 1:32:44 — Myth #10: Billionaires and Politicians Are in Charge 1:38:56 — Myth #9: Financial Markets Give Us the Right Signals for the Future 1:43:22 — Myth #8: Stimulus Is Permanent 1:48:37 — Myth #7: We Need to Crash the System to Get a Fresh Start 1:52:43 — Myth #6: The Use of Nuclear Weapons Is Unthinkable 1:57:03 — Myth #5: Fossil Fuel Companies Are at Fault 2:03:01 — Myth #4: Capitalism Is to Blame 2:07:54 — Myth #3: Humans Are Bad 2:11:37 — Myth #2: We Face a Shortage of Energy 2:14:17 — Myth #1: We Are Doomed 2:19:56 — Interventions (and Wild Ideas)
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