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Summary

This text is about green basic income (basic income that is funded by environmental taxes and fees). Because with taxes and basic income, it may be possible to tackle poverty, climate change, animal suffering, health problems and premature death and also fund basic income. Since there are global challenges that are probably too great to solve with individual interventions, a systemic approach is probably needed. A good example is the Millennium Goals that is estimated to have saved at least 21 million lives and put over 471 million people out of extreme poverty. There are good examples of why basic income, environmental taxes and health taxes are effective interventions to reduce suffering and mortality. Alcohol, tobacco, unhealthy food and air pollution account for 29,4 million deaths and 828 million DALY annually, which makes health taxes an effective complement to green basic income. New research shows that green basic income is possible, and there are examples of countries where environmental taxes, basic income or health taxes have worked. In the future, we could see if any organizations or countries would be interested in promoting green basic income.

There will be an online event where I talk about this the 25th of August 5:30 PM CEST: https://www.facebook.com/share/SJeduKZw8Kr7PHRZ/ 

Link to the event: https://meet.google.com/tza-sump-yrw 

Table of content

  • Why I am writing about green basic income
  • Why implement green basic income?
  • Funding green basic income
  • Example of green cash transfers
  • Health taxes and effective altruism organizations
  • Meat taxes
  • Conditional basic income
  • Criticism of basic income
  • If not green basic income, what systemic change can be done?
  • What would be the next steps?
  • Acknowledgements

Why I am writing about green basic income

As a lecturer in public health, I talk about global challenges and present solutions to them. I talk about organizations that are promoted by GiveWell, innovations to mitigate climate change, innovations in technology and medicine. But still, there are great challenges in the world that probably would need a systemic approach to be solved:

  • Around 700 million people live in extreme poverty (less than 2,15 dollars per day) and almost half of the world population earn less than 6,85 dollars per day, and over half of the world population don’t benefit from social protection (United Nations, 2024).
  • If we reach a 2°C rise in global temperature 99 % of the coral reefs will be wiped out, we are heading towards a 3.2°C increase if we just continue with our already implemented policies to reduce climate change (Lee et al., 2023).
  • Over 2 billion hectares of land are already deforested or destroyed (Ritchie & Roser, 2024). 1 000 000 species are at risk for extinction, over 80 % of all wastewater is discharged untreated into the environment and 4,4 billion people don’t have access to clean drinking water (United Nations, 2019; Greenwood et al., 2024).

A good example of systemic work that has succeeded is the United Nations Millennium Goals. The acceleration of development because of the UN Millennium Goals between 2000 and 2015 is estimated to have saved 21 to 30 million lives. The acceleration of development led to at least 74 million more children finishing primary school and 471-610 million more people were living above the extreme poverty line. But water, sanitation and undernourishment didn’t show positive results (McArthur and Rasmussen, 2018).

There are many problems in the world that need to be addressed. According to Gabirel and McElwee (2019), systemic change can endure over many lifetimes and that systemic change is necessary for tackling some large problems in the world, e.g. climate change. For example, a research report by Founders Pledge (2020) shows that for 10 USD, one tonne of CO2 can be averted. The greenhouse gas emissions from the United States totalled 6 343 million metric tons of carbon dioxide equivalents in 2022, according to EPA. A systemic approach may be able to make a larger impact for that money, and I think that green basic income may be the best way to tackle multiple problems.

Why implement green basic income?

Basic income is one of the most promising and well-studied interventions. Over 300 studies show that cash transfers / basic income is an effective intervention (GiveDirectly, 2020; GiveDirectly, 2023; Giving What We Can, 2024; GiveWell, 2024). The studies have shown that basic income / cash transfers improves people's life in areas like monetary poverty, health and nutrition, food security, well-being, employment, education, savings, investment, production, childhood growth, child health, malnutrition, stunting, infant mortality, educational outcomes, wealth, consumption, assets (Das & Sethi, 2023; GiveDirectly, 2020; GiveDirectly, 2024). It can also reduce depression, anxiety, HIV incidence, intimate partner violence, transactional sex, suicide, and physical and sexual violence against children (Machado et al., 2024; Wollborg et al., 2023; Wong & Forget, 2023). GiveDirectly is a basic income programme that is testing different forms of basic income (lump sum, monthly sum for a short time and monthly sum for 12 years), they are also doing research on spillover effects that affects other people than the people who get cash transfers (GiveDirectly, 2019). GiveDirectly argues that their intervention is the only one that is scalable and can reach one billion people living in poverty (GiveDirectly, 2022). For each dollar GiveDirectly gets, it multiplies to 2.6 dollars to the local community. The GiveDirectly households increased their consumption with 23 % and their investments with 58 % (Innovations for Poverty Action, 2015).

The Basic Income Grant Project, that was conducted in Namibia, where 930 inhabitants received 12.6 USD a month for two years, showed the following (Haarmann et al., 2009; Perkiö, 2014):

                          Baseline                                                     12 months into the programme

People below the food poverty line: 76 %People below the food poverty line: 37 %
Underweight children: 42 %Underweight children: 10 %
Drop-out from school: 40 %Drop-out from school: 0 %
Number of crimes reported to local police: 85Number of crimes reported to local police: 54
Illegal hunting and trespassing: 20Illegal hunting and trespassing: 1

Funding green basic income

Sumaila et al. (2024) estimates that a global 50-100 USD carbon tax per ton could give between 1.05 and 3.15 trillion dollars in revenues. Agriculture and fishery subsidies are estimated to be 540 billion USD, and 90 % of these subsidies are harmful (Sumaila et al., 2024). According to Sumaila et al. (2024), the estimated cost for a global basic income would be 41,567 billion (or 33 % of GDP). But a basic income covering all people in countries with a low Human Development Index, the cost would be 442 billion, which is 0.35 % of global GDP. For every dollar invested in implementing basic income, it generates 4-7 USD depending on if it is directed towards people below the poverty line in low HDI countries or the entire population. A basic income could increase GDP with 1 trillion dollars (0.82 % of GDP) if it is directed towards people living below the poverty line in low HDI countries or 48.6 trillion dollars (38.6 % of GDP) if it is directed towards the global population. The economic impact could be amplified so basic could boost global GDP to 163.4 trillion dollars (or129.8 % of GDP) (Sumaila et al. 2024). 

According to the IMF (Black et al., 2023), the fossil fuel sector received 7 trillion USD in subsidies in 2022. There are also other kinds of taxes that are good for the environment and are able to fund the green basic income. There are good examples of taxes, charges and fees that are already implemented according to the “polluter pays principle” in the book “Ensuring that polluters pay - Taxes charges and fees” by the European Commission. It is also possible to tax deforestation (Tonnes of wood) x (Default value of external damage per tonne wood) - (The deduction for showing of sustainability certificate), aviation-fuels, shipping-fuels, firearms or use Tobin tax (foreign-exchange transactions), financial transaction taxes, green land value tax (charge on the land plus a charge on the house minus a discount related to efficiency of the building's energy usage), consumption tax (calculated on the basis of personal income minus savings to restrain consumption) or robot tax (Abbott & Bogenschneider, 2018; Barbier, 2012; Wilkinson & Pickett, 2024; World Bank Group, 2022).

Example of green cash transfers

In 1987, 40 % of Costa Rica was covered by rainforests. In 2022, 60 % was covered by rainforests. Costa Rica has a programme that is called “Payments for Environmental Services Programme”. The programme is funded by water charge, fuel taxes, carbon credits and collaboration with the private and public sector. Landowners get cash transfers for reforestation, agroforestry, forest protection and sustainable forest management for periods of 5 or 10 years. Costa Rica is the only tropical country that has reversed deforestation (United Nations Climate Change, 2023; World Bank Group, 2022).

In Canada, they have a fuel charge of 80 $ per tonne of gasoline and an output-based pricing system for emissions from industries. The Canada Carbon Rebate gives 90 % of this money back to individuals while the rest goes to small- and medium-enterprises, farmers and Indigenous governments. A family of four can get $ 1 800 annually through the carbon rebate, a single adult could get 900 $ (more if the person lives in a rural area).  Without their carbon pricing systems, Canada would have approximately 19 million tonnes of more emissions. The Swiss CO2 Levy is imposed on all thermal fossil fuels (142 USD per tonne) and then the 1.42 billion USD it generates is redistributed to the population and it is also going to innovation, renewable heating energy and energy efficient renovations of buildings.

Health taxes and effective altruism organizations

Some Effective Altruism organizations are focusing on reducing meat consumption, alcohol consumption, sodium consumption and tobacco use because they are effective ways to promote health and reduce suffering for humans (and animals). Charity Entrepreneurship have suggested charities that try to reduce alcohol, tobacco and sodium consumption (Charity Entrepreneurship, 2020, 2022 & 2024). Alcohol and tobacco taxation seemed to be especially promising interventions, with a 50 % alcohol excise tax rate in a notional average sub-Saharan African country could give a cost-benefit ratio of 115:1 (Charity Entrepreneurship, 2020, 2022). As raising taxes for tobacco, alcohol and sodium seem to be cost-effective strategies for reducing mortality and health problems. Why not combine them and also use other health taxes?

Studies (Afshin et al., 2019; Global burden of disease collaborators, 2020; Shield et al., 2020) show that alcohol, tobacco, unhealthy food and air pollution account for 29,4 million deaths and 828 million DALY annually. Here are some examples of areas where the damage can be reduced by health taxes:

Unhealthy diet: 11 million deaths and 255 million DALY.

Tobacco: 8,7 million deaths and 229 million DALY.

Alcohol: 3 million deaths and 131 million DALY.

Sodium: 3 million deaths and 70 million DALY.

Red meat: 896 000 deaths and 23,9 million DALY.

Sweet beverages: 180 000 deaths.

Air pollution: 6,7 million deaths and 213 million DALY.

Ambient particulate matter pollution: 4 million deaths and 122 million DALY.

The Sin Tax Reform in the Philippines in 2012 raised the revenues from cigarette and alcohol products from 0.5 % of GDP to 1.4 % of GDP and reduced smoking from 23 % to 18 % (Uribe et al., 2022). The government used the Sin Tax Reform to fund health insurance coverage for the bottom 40 % of the population. The National Health Insurance Program covered 5.2 million poor / near-poor families before the reform and covered 15.3 million people in 2015 (Kaiser et al., 2016). More examples of successful health taxes can be found in the article by Ghebreyesus and Clark (2023) with examples of reductions of alcohol consumption in Russia by almost 50 % between 2003 and 2016.

There are good resources about how to implement health taxes, e.g. the WHO book “Health taxes: Policy & practice”.

Meat taxes

Taillie et al. (2023) made an RCT in the US about red meat consumption, taxes and warning labels. The group that got 30 % higher taxes for red meat had a 13 % (34 % instead of 39 % in the control group) lower consumption of red meat. According to the Global burden of disease study by Murray et al. (2019) red meat consumption is not just an environmental problem, or problem for animal suffering but also a health problem accountable for 896 000 deaths and 23,9 million DALY worldwide. New studies also show that food that is good for combating climate change also is good for human health (Bui et al., 2024).

Conditional basic income

Conditional basic income programmes are also effective. For example, New Incentives are giving conditional cash transfers for vaccinating infants in Nigeria, and they are one of the top charities at the moment (GiveWell, 2024). Bolsa Familia has given cash transfers to more than 13 million families who commit themselves to keep their children in school and to take them to health checks regularly. Bolsa Familia has been running for 25 years, reached 45 million people, increased the schooling with 0.8 years for beneficiaries and increased labor income (Laguinge et al., 2024; World Bank Group, 2010). Conditional basic income programmes have reduced HIV, tuberculosis, leprosy, transactional sex and also increased the number of children taking deworming pills (Ahmed et al., 2022; Guimarães et al., 2023). Water sanitation, housing standards, hygiene and diet also had improvements (Ahmed et al., 2022).

Criticism of basic income

  • It is unrealistic: A report from UNICEF (2019) shows that the Targeted Subsidies Reform Act, that is an universal basic income project in Iran, did work quite well (but had some flaws). 73 million Iranians got cash benefits equivalent to 45 USD per month. The transfers amounted for around 6.5 % of GDP (or 40 billion dollars) and about 29 % of the median household income (UNICEF, 2019). Even if the programme didn’t work perfectly or was evaluated properly, it shows that it is possible to implement an universal basic income programme at country level for a minimal administrative cost.
  • It is hard to evaluate and see the cost-effectiveness, is it effective enough?: Because there are basic income projects that are nationwide and have mixed success rate, it is important to look at what works and the mechanisms behind successful basic income projects.
  • It is not neglected: Basic income projects have a lot of funding, but they also need proper implementation and evaluation at a large scale to see if they work. A study by Cardone (2021) shows that 56 % of Europeans are positive about basic income.
  • It gives money to the rich and it is too political: A criticism of universal basic income is that the rich get money as well and that they don’t need money. Depending on how you frame basic income, they may not be net beneficiaries or get anything at all. E.g. if it is leaning towards negative income tax (which means that people who earn below a level of money get money from the state, while people who earn above that level of money pays money to the state). So, depending on how you frame basic income, it can be politically “left leaning” or “right leaning”. An example of left leaning basic income is Safety Income by Park et al. (2024). It is a model that is based on 50 % of the gap to the median income. For example, if the annual median income is $ 60 000 and a household has $ 30 000 in income, they get $15 000. If they have $ 0, they get $ 30 000 and so on. The Safety Income keeps almost all welfare benefits and also reduces inequality. The poorest households also get 11 times as much money as universal basic income households because of the distribution of money.
  • People will not work: Many basic income experiments have shown that basic income doesn’t decrease the willingness to work (GiveDirectly, 2020). Automation and AI will probably affect the labor market and may create a massive job loss. Different resources say that up to 300 to 800 million jobs will be lost to AI and automation, and others say that quite few jobs will be affected. In the worst case scenario, basic income and robot taxation would probably be a good way to go.

If not green basic income, what systemic change can be done?

  • It is possible to use universal basic services instead of universal basic income, since it can be cheaper. Universal basic services covers basic necessities, such as digital access, childcare, housing, basic transport services and social care.
  • There are many types of basic income models, so if one doesn’t work, another might: https://en.wikipedia.org/wiki/List_of_basic_income_models
  • I also think that national income, by Thomas Piketty, would be a good global measurement instead of GDP. For example: “If you take 100 billion euros of oil from oil reserves underground or you take 100 billion euros in fish from the ocean, you have 100 billion euros of GDP, but you have zero euros of national income. And if in addition when you burn oil or gas you create global warming and you reduce the durability of life on earth, then if you put a price on the negative impact of these emissions you should have negative national income instead of positive GDP.”
  • Social impact bonds: Social impact bonds are contracts that are based on outcomes. For example, if a municipality wants to try a prevention programme that reduces drug addiction, a corporation can fund this prevention programme. In this example, they give 100 000 dollars to this programme. When the programme is finished, they get money back based on the outcome. If the reduction of drug addicts is ten, they get 100 000 dollars. If the reduction is 12 or more, they get 120 000 dollars. If the reduction is 6 or less, the corporation gets 60 000 dollars back.
  • Creative funding of charities: A good example is Founders Pledge, which enables corporations to commit / pledge to donate at least 2 % of their profit from selling their entire business. The business owner signs the pledge and a few years later when it is time to sell the business, at least 2 % of the profit goes to effective charities. They have received over 1900 pledges, worth over 10 billion dollars, and they have 1,1 billion dollars in fulfilled commitments. Spreading this idea to organizations like the United Nations would probably generate much money because many people would be able to collect pledges and collaborate with many corporations. For example, over 48 000 corporations are participants in the UN Global Compact, which would make it easy to collect pledges. Even if the money probably wouldn’t go to as effective causes as Founders Pledge, it could create change at a higher level.
  • There are research articles (Kenter et al., 2024; Sachs et al., 2019; Sumaila et al. 2024) with good ideas about systemic change for a sustainable future. The article by Kenter et al. also includes a list of organizations working on systemic change.

What would be the next steps?

There will be an online event where I talk about this the 25th of August 5:30 PM CEST: https://www.facebook.com/share/SJeduKZw8Kr7PHRZ/ 

Link to the event: https://meet.google.com/tza-sump-yrw 

The second half of the event will be dedicated to discussions for those who are interested.

The next steps after that could be:

  1. See if organizations that are promoting basic income would like advice about basic income and taxation. E.g. Basic Income Earth Network or UNESCO Inclusive Policy Lab.
  2. Help organizations or nations that are interested in these kinds of questions based on basic income maps or the study about attitudes towards basic income by Cardone (2021), where over 80 % of the population in Lithuania is positive about basic income. An OECD report (2023) shows that basic income is a good way to go when raising carbon prices in Lithuania. An alternative would be to start a green basic income pilot project on a small scale.
  3. See if organizations interested in systemic change or sustainability are interested in similar solutions: E.g. Finance for environmental and social systemic change at Cambridge UniversityUnited Nations Environment ProgrammeCenter for Financial InclusionNew Economics FoundationBloomberg PhilanthropiesClimate Social Science NetworkRoosevelt InstituteClimate StrategiesUNDP Climate PromiseEarth System Governance ProjectSocioeconomic Systems and Earth SystemsTransformations CommunityGreenDeal-NET or The Elders. Some of the authors of the green basic income article by Sumaila et al. (2024) are connected to organizations that advocate for systemic change. E.g. Resilience AllianceEarth Resilience and Sustainability Initiativethe International Society for Ecological EconomicsGlobal Economic Dynamics and the BiosphereThe Beijer Institute of Ecological Economics.
  4. Compete in competitions that focus on sustainability or apply for funding. E.g. Champions of the Earth or UpLink Innovation Challenge or Global Innovation Fund.
  5. Go to conferences like the World Economic Forum Sustainable Development Impact Forum or the 2024 Forum on 'Re-imagining Earth System Governance in an Era of Polycrisis online.
  6. See if green basic income + health taxes can be a part of the Global Tax Program, the Health Tax Workstream or the Environmental Tax Workstream by the World Bank Group.

Acknowledgements

Thanks to Ysaline Bourgine, Göran Hådén, Joel McGuire, Niklas Holmgren and my girlfriend Emilie Magnusson for the support with different versions of the text and for the support (all people agreed to be mentioned here).

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A special thanks to Niklas Holmgren and Joel McGuire for the support and comments on the first draft!

By the way... Here is the list of main references if it is easier to look here:

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