Questions and issues of extreme complexity and consequence now abound. Consider our
response to climate change alone and the need to transition our energy system off fossil fuels:
• How can we mobilize the staggering $44 trillion of new investment in energy
infrastructure and energy efficiency that the International Energy Agency estimates will
be necessary by 2050 to replace the current energy system?127 (To put that number in
context, the market value of all global public companies combined is $60 trillion.)
• How can we eliminate the burning of fossil fuels by mid-century?
• What about our ability to absorb the economic write-off of $20 trillion in stranded
assets128 representing the majority of proved fossil fuel reserves that must be left in the
ground or not burned, and which if extracted would blow us through the 2 degree Celsius
warming threshold that scientists agree is the likely tipping point to truly permanent
catastrophic consequences?
• What about the fact that three quarters of those fossil fuel reserves are owned not by
public companies, but by nation states like Saudi Arabia, Iraq, Iran, Venezuela, and Russia,
whose economies, public budgets, and social cohesion are currently highly dependent
upon the continued extraction and sale of fossil fuels?
• How are we going to negotiate a deal with OPEC countries (or Putin) that restricts their
ability to sell their oil? Same question for Exxon and Shell. And who could enforce such
an agreement?
If we do not address these issues, we destroy life on the planet as we know it. Yet, if we do not
address them properly, we could easily collapse the economy upon which we also depend.
This is the “Big Choice,” challenge, and dilemma facing our generation.129 Consequently, it
would be foolhardy to suggest that the choices we must make and the solutions we undertake
will be anything but immensely difficult.
• Technological solutions not yet imagined will certainly play a role, but counting on
unknowns is not prudent.
• Various studies point to the job creation and investment potential of the energy transition,
but the scale and complexity of the required shift, both economically and politically, is
unprecedented.
• As of this writing, there is still not even an open and honest discussion about the
unprecedented geopolitical challenge stranded assets represents as detailed above, coming
at a time of rising barbarism in the Middle East and the seeming breakdown of the post-
Cold War world order.
While a comprehensive policy formulation for transforming our energy system away from
fossil fuels and for the much broader and unprecedented transition to Regenerative Capitalism
is beyond the scope of this paper, we can say that the emergence of a Regenerative Economy
will be accelerated by polices that include:
• Leveling the playing field by removing subsidies for activities that hinder the emergence
of regenerative economies. Top priority should be the elimination of subsidies to the fossil
fuel industry and to fossil-fuel- and chemical-intensive industrial agriculture. Developing
aggressive new subsidies to catalyze the shift we desire, just as subsidizes have been used
to subsidize most systemic changes in our economy. Tax credits and feed-in tariffs, for
example, could help catalyze the $44 trillion of investment capital flow required for the
transition to the post-carbon economy.
• Restructuring the tax code to help business incorporate social and environmental costs
and benefits into their decision-making. This can be most directly achieved by relieving
the tax burden from “goods” like empowering productive work, while increasing taxes
on “bads,” such as market activity that is generating negative “externalities” (costs like
pollution that are passed on to somebody other than the business that created them).
Such reforms would include income tax relief for the working class, transaction taxes
on excessive financial speculation, and a steep and rising carbon tax and other Pigovian
taxes.130 Such tax reform can be designed as a tax shift, not a tax hike, and can be revenue
neutral, thus transcending the political bickering of left versus right.
• Proactively using the power of the public purse to catalyze the shift in demand to
renewable energy. The U.S. government is the largest single energy consumer in the world.
Its energy demand must lead the transition.
Questions and issues of extreme complexity and consequence now abound. Consider ourresponse to climate change alone and the need to transition our energy system off fossil fuels:• How can we mobilize the staggering $44 trillion of new investment in energyinfrastructure and energy efficiency that the International Energy Agency estimates willbe necessary by 2050 to replace the current energy system?127 (To put that number incontext, the market value of all global public companies combined is $60 trillion.)• How can we eliminate the burning of fossil fuels by mid-century?• What about our ability to absorb the economic write-off of $20 trillion in strandedassets128 representing the majority of proved fossil fuel reserves that must be left in theground or not burned, and which if extracted would blow us through the 2 degree Celsiuswarming threshold that scientists agree is the likely tipping point to truly permanentcatastrophic consequences?• What about the fact that three quarters of those fossil fuel reserves are owned not bypublic companies, but by nation states like Saudi Arabia, Iraq, Iran, Venezuela, and Russia,whose economies, public budgets, and social cohesion are currently highly dependentupon the continued extraction and sale of fossil fuels?• How are we going to negotiate a deal with OPEC countries (or Putin) that restricts theirability to sell their oil? Same question for Exxon and Shell. And who could enforce suchan agreement?If we do not address these issues, we destroy life on the planet as we know it. Yet, if we do notaddress them properly, we could easily collapse the economy upon which we also depend.This is the “Big Choice,” challenge, and dilemma facing our generation.129 Consequently, itwould be foolhardy to suggest that the choices we must make and the solutions we undertakewill be anything but immensely difficult.• Technological solutions not yet imagined will certainly play a role, but counting onunknowns is not prudent.• Various studies point to the job creation and investment potential of the energy transition,but the scale and complexity of the required shift, both economically and politically, isunprecedented.• As of this writing, there is still not even an open and honest discussion about theunprecedented geopolitical challenge stranded assets represents as detailed above, comingat a time of rising barbarism in the Middle East and the seeming breakdown of the post-Cold War world order.While a comprehensive policy formulation for transforming our energy system away fromfossil fuels and for the much broader and unprecedented transition to Regenerative Capitalismis beyond the scope of this paper, we can say that the emergence of a Regenerative Economywill be accelerated by polices that include:• Leveling the playing field by removing subsidies for activities that hinder the emergenceof regenerative economies. Top priority should be the elimination of subsidies to the fossil
fuel industry and to fossil-fuel- and chemical-intensive industrial agriculture. Developing
aggressive new subsidies to catalyze the shift we desire, just as subsidizes have been used
to subsidize most systemic changes in our economy. Tax credits and feed-in tariffs, for
example, could help catalyze the $44 trillion of investment capital flow required for the
transition to the post-carbon economy.
• Restructuring the tax code to help business incorporate social and environmental costs
and benefits into their decision-making. This can be most directly achieved by relieving
the tax burden from “goods” like empowering productive work, while increasing taxes
on “bads,” such as market activity that is generating negative “externalities” (costs like
pollution that are passed on to somebody other than the business that created them).
Such reforms would include income tax relief for the working class, transaction taxes
on excessive financial speculation, and a steep and rising carbon tax and other Pigovian
taxes.130 Such tax reform can be designed as a tax shift, not a tax hike, and can be revenue
neutral, thus transcending the political bickering of left versus right.
• Proactively using the power of the public purse to catalyze the shift in demand to
renewable energy. The U.S. government is the largest single energy consumer in the world.
Its energy demand must lead the transition.
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