Imagine a world where everyone has enough income to live comfortably while also addressing the urgent issue of climate change. A recent study conducted by a team from the University of British Columbia suggests that this could be a reality through the implementation of a universal basic income (UBI) scheme funded by taxing carbon emissions. UBI proposes a regular payment to every individual without any means testing, which could potentially replace other forms of welfare, leading to increased happiness and improved living standards. Economist Ussif Rashid Sumaila explains, “Environmental damage and poverty both pose huge risks to society. By requiring major polluters to pay for cleaning up their messes, we can address both issues simultaneously.”
The research estimates that it would cost US$41 trillion to provide a basic income to all 7.7 billion people worldwide or US$442 billion to only help the 9.9 million individuals below the poverty line in developing countries. Despite the high cost, the researchers predict that implementing UBI could generate significant economic growth, with a boost in global GDP of US$163 trillion or 130 percent. According to the study, every dollar spent on UBI could result in up to seven dollars in economic impact as the money is circulated back into the economy through spending on essential goods and services.
In addition to economic benefits, UBI could also have positive environmental impacts by incentivizing more eco-friendly policies through the carbon tax. This approach would encourage companies to adopt greener practices, ultimately leading to a more sustainable future. Furthermore, UBI could enhance social resilience by providing a safety net for individuals during crises such as natural disasters or pandemics. Sumaila emphasizes the importance of taking proactive measures during challenging times to safeguard livelihoods and communities.
Despite the promising prospects of UBI, several hurdles must be overcome for its successful implementation. Political will and consensus are crucial, along with concerns about potential disincentives for work and innovation. Additionally, financing UBI remains a significant challenge, requiring a diverse array of strategies to fund the program effectively. The authors of the study suggest exploring various funding sources to lower the barrier imposed by implementation costs and ensure the long-term sustainability of UBI.
The concept of universal basic income presents an innovative solution to address poverty and climate change simultaneously. By redistributing wealth through a carbon tax-funded UBI scheme, society can achieve improved living standards, economic prosperity, environmental sustainability, and enhanced social resilience. While challenges exist in implementing UBI, the potential benefits far outweigh the obstacles, making it a compelling strategy worth further exploration and consideration.
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