 Good afternoon, Howard Wigg, Code Green, Think Tech, Hawaii. My guest Paul Bernstein today has something very, very important to say about perhaps the ultimate solution to climate change, and this is something that I've been thinking about having been in this business forever, and I've often thought people really object to any new tax on carbon. I remember Governor Cayetano tried to impose a five cents a gallon tax many, many years ago. There was immediate pushback, and he withdrew his proposal almost immediately, and I've always asked, why not if you're going to impose a tax on fossil fuels, have a commensurate reduction in income tax? Why are we talking about having an extra tax, especially on low income people who have a hard time making ends meet anyway, now we're imposing something more on them? Well, Paul Halfman and the climate, Citizens Climate Lobby has something very, very similar to propose, so welcome to the program. Mr. Bernstein, excuse me. Well, thank you very much for having me on the show. Greatly appreciate the opportunity to speak about Citizens Climate Lobby, the act that they're pushing the bill that's actually before the U.S. House of Representatives, namely the Energy Intervention and Carbon Dividend Act. Okay, why don't you give us a little bit of background about the organization and what it's all over proposal is? Certainly. So Citizens Climate Lobby has been around for at least a decade, and its primary goal is to push policy that will bring about a reduction in greenhouse gas emissions, specifically carbon dioxide emissions. And the policy that they are pushing is one that just as you described, Howard, puts a price on carbon, which ultimately is a price on fossil fuels, and then takes the revenue from that carbon fee and refunds it back to individual citizens. It's, I'd say, a little bit simpler than what you were describing about refunding through income tax, though that has certainly been proposed as well as other ideas. But this is simpler in that equal shares of this revenue, the carbon fee revenue that the government collects, is given back to individual citizens. So it doesn't matter what rich, poor, what have you, each person gets the same amount or equal shares to all the citizens. Now wouldn't that, it seemed to me that would be favoring the rich and taxing the poor. I suspect that's not how it's structured. Right. So there's actually, I think a lot of people have that misunderstanding, because what people look at is, yes, the poor spend a greater proportion of their income on fossil fuels, on gasoline, what have you, on goods and services than the wealthy people do. The wealthy people are able to invest, save, what have you. But we're not talking about percentage of income, we're talking about this absolute money. So if the government collects $100, and there are 100 people that are putting money, there are 100 citizens, each citizen gets a dollar. So the less well to do, actually in total, are contributing fewer dollars to this, because they're purchasing less gasoline, they're purchasing fewer goods. So they're in the end, they're spending less money effectively on the carbon tax. But since it's equal shares, they actually get a more revenue back. And so the policy actually becomes quite progressive rather than regressive, which is a problem that you were bringing up originally. And I should interject, the word carbon may be a question mark for some people, and we think certainly coal has carbon, we know that oil has carbon, but natural gas, natural gas is clean. No, natural gas has carbon in it also. So you're getting all three of those segments. Correct. Yeah, yeah. Absolutely correct. You know what we've done? Why don't we bring the first slide up, please? Okay, so I'll tell you what, since we've kind of covered the act quickly, why don't we move to the second slide here. And I think for your viewers that they're probably convinced I don't need to go into much of this, but just a little bit of a background on the problem. So I think people are aware that global warming exists today. The scientists, the climate scientists overwhelmingly believe that climate change exists, global warming exists, and that's how you were referring to the main cause, at least within the U.S., and actually globally, but greater share within the U.S., contributing to greenhouse gas emissions that contribute to global warming are from the burning of fossil fuels. So as you said, coal, petroleum products, and natural gas. And as the slide shows, those are mainly human, those are human activities. So we need to, in terms of a policy, we need to address human actions. You know, this reflects the fact that consciousness is indeed rising at long last. Had you created that pie chart 10 years ago, the under-convince would have been much bigger slice, 20 years bigger, 30 years, under-convince probably would have been in the majority. I agree. But it's a combination of the media and the fact that we are all getting impacted by climate change. Yeah, it's real. Right, I think that goes right into the next slide, actually. So if we can just bring the next slide, run through a few of the consequences we're seeing now or how we're being affected. I think every few days we see in the paper something about a record-setting temperature somewhere in the globe, whether it's Australia with 120-degree days in the desert or, you know, warmest day in a winter somewhere. I mean, the U.K., I think now is having the warmest temperatures it's had in quite some time. We're also seeing more extreme weather events, whether that's Hurricane Sandy, Hurricane Katrina, but even in Hawaii, we know that we have a longer hurricane season. And we're also experiencing flooding. We're experiencing fires even in Hawaii, more wildfires. Everybody's heard about the ones in California. And in terms of flooding, the politicians are looking seriously at the fact that Waikiki is very vulnerable to flooding. It used to be rice paddies, and before that it used to be a swampy area. And if it got flooded, that would not be good. So the latest plan I saw was building a four-foot wall on the Makai side of the Alawai Canal. Number one, what is that cost? Number two, what does it do for aesthetics? Right, probably poor for aesthetics. I have a slide later that people are estimating costs in several billions of dollars if we were to have just a one meter rise in sea level. But people are saying that it could be as much as two meters by the end of the century. So four-foot sea wall may be insufficient to deal with such a problem. Two meters, incidentally, would be a shade over six feet. Right, right, sorry. We can just imagine Waikiki Beach six feet more of water. Right, right. Why don't we go to the next slide, see what's going on here. Okay, so the previous slide, just talking about the various issues, as Howard mentioned that the flooding or rising sea levels and severe droughts, what have you, so we have all these environmental consequences or damages that are occurring now and forecasted to be that much worse in the future. So what kind of a climate policy could we enact, or what are the parameters or criteria of a good climate policy? And one is that the policy needs to force or induce great reductions quickly. It also, I would say, given the complexity of the problem, needs to use incentives that support choice. And so it's a policy that doesn't restrict options out there. So it gives consumers and businesses the broadest set of options to reduce their greenhouse gas emissions. And options for Americans are very important. I can't tell you how many people I've said who've said, I don't care, I just don't want the government telling me what to do. So in this case, you give people options. Right, yeah. Makes it much more palatable. Exactly. Maybe we could bring up that slide again. I interrupted there. So also this gets back to one of the original points that you brought up, Howard, about being fair. And so that goes back to having a policy that is not regressive, so not giving undue burden on the less well to do. And also it being sticky or, I'll say, durable that the policy needs to stay in place. We see now that administration to administration, things go back and forth. And climate change is a very serious policy. We need long term dedicated action to reducing greenhouse gas emissions. We can't afford that one administration, the emissions drop and the next one, they go up. And also that in addition just wouldn't be good for the business climate, too. And the last thing or kind of the overall is that the policy needs to be good for the planet, needs to really bring down the overall emissions and it needs to be good for the economy or do have the least negative impacts on the economy, which sort of goes back to free choice or having not restricting options, not being a restrictive policy. And something important that you mentioned there was the stability or durability of the plan. One of the famous lines that a banker will always give you is I'm a banker and I don't like surprises. Well, actually no business likes surprises. They have to plan. Where are we gonna put our money? What new policies will we have? So this would be a very stable type of action, yeah. Right, so if you can go to the next slide and show how the carbon dividend or carbon fee and dividend policy fits in to those and exactly what you're saying by having this carbon fee and having this carbon fee on a set schedule that for a number of years, then as you said, businesses know, right? They can forecast their expenditures. They can figure out what are the investments they wanna undertake because now they know the cost facing them versus a more regulatory policy that is forcing companies or industry to do something but there's no cost on it. So as we said, the policy proposed by Citizens Climate Lobby would be to put this carbon fee on fossil fuels, on the burning of fossil fuels. And speaking in terms of planning, they're gonna know in advance that this is coming down the pike and I've seen it time after time after time you change a law that regulates energy use in some form and boom, behavior changes, what a concept. Oil is cheap, businesses will react accordingly, oil is expensive, business will react accordingly. And in this case, they're gonna be forewarned, they can plan for these things. Right, exactly. And lo and behold, when you reduce your fossil fuel use, you reduce your cost of doing business. Right, right, right. And I'd also say the nice part about this policy is it's a very broad base. In other words, by addressing all the carbon dioxide emissions from the burning of fuels, it's much broader than something like the fuel efficiency standards we have on vehicles or the CAFE standards. So the CAFE standards are just addressing emissions from new vehicles by forcing new vehicles to be more efficient. Whereas if you put a carbon tax, so that translates into raising the price of gasoline, that that's addressing all emissions from driving a fuel. So it's inducing people who have existing vehicles to drive less or maybe carpool, use the bus or simply not take trips. And it also gets people purchasing new vehicles that now I want a more efficient vehicle. And it also properly incentivizes what type of fuel so gives incentives for electric vehicles. Definitely. So on that very cheery note, we need to take a break. Cold green will be back in one minute. Hi, I'm Rusty Komori, host of Beyond the Lines on Think Tech Hawaii. My show is based on my book also titled Beyond the Lines and it's about creating a superior culture of excellence, leadership and finding greatness. I interview guests who are successful in business, sports and life, which is sure to inspire you in finding your greatness. Join me every Monday as we go Beyond the Lines at 11 a.m. Aloha. Hey, Aloha. My name is Andrew Lanning. I'm the host of Security Matters Hawaii airing every Wednesday here on Think Tech Hawaii live from the studios. I'll bring you guests, I'll bring you information about the things in security that matter to keeping you safe, your coworkers safe, your family safe, to keep our community safe. We wanna teach you about those things in our industry that may be a little outside of your experience. So please join me because Security Matters, Aloha. Welcome back to Code Green, Think Tech Hawaii. We're having a conversation with Paul Bernstein talking about, I would say, behavior change. That's something we're always talking about in the energy office. And if you have a fossil fuel price, extra fossil fuel price, people, businesses and individuals are going to change their behavior. Exactly. And one thing we plan for in the energy office is 100% clean energy for electricity by the year 2045. But increasingly, we're talking about 100% clean ground transportation because technology is changing so rapidly that it is technologically feasible now. Right. Yeah, right. But all it takes is a lot of behavior change. Right, right. I'll just interject the vision that I have anyway for clean transportation. We have too many photovoltaics on our roofs in Hawaii and in our fields. Why do I say too many? We make so much electricity in the middle of the day, nice sunny day, that the utility can't absorb it all and it's going to waste. So we're encouraging more and more and more storage, battery storage at the residential level and at the huge commercial level, store that energy, use it at night when we need it and then integrate electric vehicles into this. Electric vehicles can also benefit from that excess energy in the middle of the day or and they can store that energy in their batteries and cooperate with the utility. And if they have extra, they can actually feed it into the utility when they want it. Voila, you're moving very, very close to 100% clean ground transportation. Right, right. And Hawaii is leading the way in this, by the way, as you're probably aware. Yeah, well, as you said, I mean, I think the carbon fee here would greatly help induce that behavior, right? So talking about a national program here, but Hawaii could think of a simple act would be to increase the barrel tax, for example, since most of our fossil energy is coming from crude oil. And trouble with the barrel tax is you're not repaying the citizens. Right, so now you need the other half that back on that slide, we've talked about the, if you will, putting the fee and inducing the behavior, but then to make it fair to the lower income people need to return those revenues. So you're right, the barrel tax, there'd have to be some modification there that would say the revenues from the barrel tax or the revenues corresponding to these increases would be refunded back to citizens. Yeah, yeah. So why don't we go to the next slide here? So just wanna talk about some of the consequences of if we get the policy wrong. So there are two major categories here. One is on the environmental side and one is more on the political or societal side, I would say. So the first, the bottom left-hand figure there gets it exactly what you were talking about Howard earlier of looking at what Waikiki might look like without a seawall in the next 50 years or so that the light blue is basically inundation, you will, that so now the streets are looking somewhat like Venice and that the top figure there is some estimates of what the costs would be to the state if you had a one meter or a little over a three-foot rise in sea level by the end of the century. Can you reset the costs? Since we can't read the slide here. Oh, I'm sorry. So it's about 20 billion but these estimates, my guess is it's only gonna get worse if given the more recent predictions of greater sea level rise. So I think these numbers came out earlier analysis and more recent analysis is predicting higher sea level rises which would then lead to more costs to move infrastructure and- And 20 billion, this is a small state we have here. 20 billion is a nice chunk of a chain. If my calculations are correct, that is about $1,600 per every man, woman and child in Hawaii. Okay, yeah. So if we could resume that slide, there was some interesting human being things going on on the right there. So the consequence on the political or it gets back to basically the fair and sticky or fair and durable here that and gets back to Governor, as you mentioned about Governor Caetano, in France, the Prime Minister implemented or increased the tax on gasoline. It wasn't that sizable of a tax but the revenues were not given back to the citizens and you had mass riots, revolt, well, riots, demonstrations, what have you is you're seeing in the figure that the infamous yellow vest now. And I'm not sure if it's still going on but it was certainly going on for many weeks and basically forced the administration there to rescind the gasoline tax. Whereas again, if you return the revenues back to the people, majority of people will actually see more revenue than what they will pay out and as they change their behavior to reduce their emissions, they're likely to receive even more revenue or that differential between what they pay in and what they receive for the lower income is may actually increase given that up at the high end may be more inelastic or less likely to move since they can afford the higher prices. And this would be especially consequential to the lower income because they tend to live out from the urban core. They have more of a commuting issue here. So number one, they would get money back and number two, I would think they would change their behavior. How can we reduce our gasoline consumption here? Right, so I mean, this should be clear. I don't think this is the only policy that should be implemented, but I think if such a policy were implemented, it would go a long ways to getting at our greenhouse gas emissions. Yeah, again, I've seen it time after time after time. If there are no consequences, people do not change behavior. If there are consequences, people change behavior. I've been in this business forever. I can cite many, many instances. Why don't we look at the next slide? So just going a little bit more in depth here, and let me touch on, we've touched on the carbon fee, we've touched on the carbon dividend. There are two other elements that are important to the current energy innovation and carbon dividend act before the house. One is the border carbon adjustment which protects US businesses, which therefore helps protect US jobs for US citizens. And then there's the issue of limited regulatory adjustment so that we don't get conflicting policies and we can have a more efficient regulatory, effective and efficient regulatory system. I will add with the border carbon adjustment, I think we know that even if the US were to drive its greenhouse gas emissions or carbon emissions to zero, that wouldn't do nearly enough to avoid all the environmental consequences from the rising concentration of greenhouse gases. So the border cost adjustment, what it does is it puts a tax on any imports into the US if the corresponding country from which we import doesn't have a carbon tax policy or some kind of cap and trade policy or somehow is not putting a price or cost on their emissions. So this basically gets rid of an incentive for a US business to relocate to a foreign country and then export the goods back to the US in order to avoid the US carbon tax. So doing this will help incentivize the rest of the world to adopt a carbon tax and reduce their emissions because at the end of the day, that's what we need. We need great reduction in global greenhouse gas emissions, not just reduction in the US. Yeah, the two giants out there, China and India are both pursuing carbon reduction policies. I think that China has more PV photovoltaics in action than we do and they're building more and more PVs like mad and India is taking similar steps now. They don't have the per capita resources that we do but they are very, very aggressively pursuing this. Right, yeah. So as long as that were to take place then the border cost adjustment may be zero with trade with India or trade with China. Very, very important, yeah. So let's take we're nearing the end of our show. I think there's one more good slide here left. Okay, so last let me just wrap it up with the reason why Citizens Climate Lobby likes the policy. So it's effective. It's basically calling if economic analysis have shown if the policy were to go in place that it would bring about a reduction of 40% in carbon emissions by 2030. Good for the people and that revenues go back to the back to the people. Good for the economy and that it's allowing the economy the maximum amount of choices, the maximum amount of freedom to bring about these reductions. It's not imposing restrictions on how reductions can be achieved. In other words, it's allowing the reductions to occur at the least cost, if you will. And a very important piece that goes to the durability is the bipartisanship. The bill, both Republicans and Democrats have signed on to the Energy Innovation and Carbon Dividend Act. So the only way the US is gonna move forward is if we have bipartisan support. Absolutely, we've learned that the hard way. Yes. Okay, on that very cheery note, let's bring up the last slide, because if people want to contact you, here's how to contact you. Well, I'd like to say thank you, Howard, for the opportunity to present the policy. If there's anything important in this world, it is this. Well, thank you very much, Paul Bernstein. I wish you all the best in your considerable efforts and if people want to contact you and have you speak to other groups, I'm sure that you would be amenable to that. Sure, I'd greatly appreciate the opportunity. Thank you so much for giving me the platform. And thank you everyone for attending Think Tech Hawaii, Code Green, see you next time.