Buy your own environment bonds

Ecuador has lots of oil sitting beneath its rainforest. It could chop down the forest and become richer almost overnight. But you and your children would have less nice clean air to breath, and the world would lose one of its most diverse ecosystems - and who knows what medications might be found there in the future if it is left unharmed. This poor country would lose about USD 7bn if it does not tap this oil. But if the world contributes just half of these losses then it will be prepared to forego the lost resources. Effectively, a relatively poor country is prepared to subsidise your clean air. Pretty generous, I'd say. 

I bought a 'green bond' some time ago. You can contribute just $5 if you like and, if ever the decision is taken to pump the oil, the government has to give you the money back. The scheme is administered by the United Nations Development Programme (UNDP). The returns are in-kind. You and those around you get cleaner air; you keep the opportunity to visit this part of the world any time in your life; you get to feel good that you are doing something for the world and that you are helping to compensate a poor country for part of its losses (you like to give a little something back :)  ) and occasionally you receive emails giving you updates and reminding you what a fantastic human being you are. And it's one of those emails that prompted me to write this entry.

You can read about the scheme and buy your green bonds HERE. The Yasuni National Park website about the scheme is HERE (in Spanish) and an analysis of the scheme by the World Resources Institute is HERE.

Market forces to combat climate change

David Frum argues that the best way for the (US) government to reduce oil dependence is to 'do nothing'. By 'do nothing' he seems to mean tax dirty energy and reduce income taxes by an equivalent amount*. If consumers really value polluting, they will spend all of their reduced taxation on that, if not, they can maybe use their extra cash to buy a bike and cut down on petrol. Given that 40% of trips in the US are under 2 miles and 90% of these are done by car, this seems possible even with current sprawling suburbs. Although there are issues, some independent-minded folk from Raleigh, North Carolina have been trying to figure out how to make Americans walk more (a short, fun video). I think that higher taxes on fuel are a practical and moral obligation.

Unfortunately, maybe your kid will learn that climate change is a big hoax in school. And Newt Gingrich seems to think that a free-market supporting American government should intervene to guarantee cheap petrol (HT:JK). The flip side is that taxes would have to rise to pay for the increased subsidies and there will be more floods, droughts, forest fires across America as a result of the increased pollution. It doesn't seem like such a fantastic deal.


* In the sense that this means no net change in the burden on the taxpayer, this is 'doing nothing'. But I think he undersells himself in that changing behavioural incentives to minimise negative externalities is a difficult and important part of governing a country.

West should pay for climate change

A Malawi study reveal the cost of adaptation to climate change.

“The cost of adapting a integrated farming system in a village in Nepal could be US$20,000 per year, that of a rain-fed maize system in a district of Malawi’s US$55 million, and protecting the entire livestock sector of Tanzania could cost up to US$280 million — with all costs likely to treble by 2030."

Developing countries have to pay the price for western pollution but convincing people in the west that we have to pay for this is difficult. The Daily Mail for example, seems to feel that it is both a waste of taxpayer money and a way to manipulate African governments. I think that it is a good use of taxpayer money to pay developing country governments to be greener. The economic costs of climate change are high and it makes sense for wealthier countries to foot the bill. You can make your own personal contribution so that the Ecuadorian government does not rip up the rain forest to pump oil HERE.  As for manipulating African governments. Well, maybe. In the same way as I am manipulating potential smokers by taxing cigarettes. Or manipulating manufacturers by choosing what I buy. I think I can live with that.