Economist calls for tax on the unborn to pay for cut greenhouse gases

February 09, 2005

University of Warwick Economist Professor Andrew Oswald is to call for the introduction of innovative Global Warming Bonds that would financially reward companies and individuals that reduce emissions now but which would be paid for by taxes on those yet to be born.

At a policy briefing at the University of Warwick's London Office at 3 Carlton House Terrace at 10.30am on Wednesday 9th of February, Professor Oswald will argue that to save the planet we need a new kind of financial incentive. He will suggest a form of long-dated bond that would be valuable today even though it would not begin paying until around 2045. These bonds would be given out to reward those people and firms who reduce emissions today. Taxes on those yet to be born would fund the bonds - our children's children would thereby pay to solve global warming.

Professor Oswald will say:

"Carbon dioxide emissions now get more attention than ever, but the focus has been on getting lots of countries to attend meetings and sign up to treaties. That is useful but unlikely to make fast headway. What is required is an innovative way to allow unborn babies to vote with their wallets."

"In return for a cooler globe, our offsprings' offspring would pay more tax to the governments of their era. Future generations pass us down their money; in return we pass them up our low temperature. All generations gain. And this would be fair, because those future generations will be richer than we are, and they want us to alter our actions to help them."

"The people who today inhabit the globe receive almost no benefit from cutting back on greenhouse gases. All they get is inconvenience. Unborn voters of the next century do not have the same preferences as us. We like old sports cars and oil-fired central heating. They want us to have small new cars and use solar panels. Global Warming Bonds would provide people with a reason to change how they act."

"I believe that the problem of climate change is best tackled by inventing a new kind of long-dated government bond (a certificate that would pay out cash in the future) and giving those out as incentives to people who today reduce their emissions. Money is a great persuader - we should use financial incentives not complicated restrictions and rules."

"The world's nations would issue a new kind of government bond. These would pay a steady stream of income that would start paying one full generation away from today say around 2045. Firms, nations and individuals that cut back emissions today would be compensated with these bonds. The bonds would also be bought and sold. As they guarantee a future flow of income, they would have immediate value. Recipients would mostly promptly sell up for cash. Many bonds would be purchased by pension funds and organizations interested in long-term returns."

The briefing paper 'Energy and Travel in the Future' is downloadable from Professor Oswald's website:
For further information contact:

Professor Andrew Oswald Professor of Economics, University of Warwick Tel: 44-247-652-3510

If you intend to attend the briefing please call Peter Dunn, Press and Media Relations Manager, University of Warwick on 44-247-652-3708 or mobile/cell phone 44-776-765-5860 email

University of Warwick

Related Climate Change Articles from Brightsurf:

Are climate scientists being too cautious when linking extreme weather to climate change?
Climate science has focused on avoiding false alarms when linking extreme events to climate change.

Mysterious climate change
New research findings underline the crucial role that sea ice throughout the Southern Ocean played for atmospheric CO2 in times of rapid climate change in the past.

Mapping the path of climate change
Predicting a major transition, such as climate change, is extremely difficult, but the probabilistic framework developed by the authors is the first step in identifying the path between a shift in two environmental states.

Small change for climate change: Time to increase research funding to save the world
A new study shows that there is a huge disproportion in the level of funding for social science research into the greatest challenge in combating global warming -- how to get individuals and societies to overcome ingrained human habits to make the changes necessary to mitigate climate change.

Sub-national 'climate clubs' could offer key to combating climate change
'Climate clubs' offering membership for sub-national states, in addition to just countries, could speed up progress towards a globally harmonized climate change policy, which in turn offers a way to achieve stronger climate policies in all countries.

Review of Chinese atmospheric science research over the past 70 years: Climate and climate change
Over the past 70 years since the foundation of the People's Republic of China, Chinese scientists have made great contributions to various fields in the research of atmospheric sciences, which attracted worldwide attention.

A CERN for climate change
In a Perspective article appearing in this week's Proceedings of the National Academy of Sciences, Tim Palmer (Oxford University), and Bjorn Stevens (Max Planck Society), critically reflect on the present state of Earth system modelling.

Fairy-wrens change breeding habits to cope with climate change
Warmer temperatures linked to climate change are having a big impact on the breeding habits of one of Australia's most recognisable bird species, according to researchers at The Australian National University (ANU).

Believing in climate change doesn't mean you are preparing for climate change, study finds
Notre Dame researchers found that although coastal homeowners may perceive a worsening of climate change-related hazards, these attitudes are largely unrelated to a homeowner's expectations of actual home damage.

Older forests resist change -- climate change, that is
Older forests in eastern North America are less vulnerable to climate change than younger forests, particularly for carbon storage, timber production, and biodiversity, new research finds.

Read More: Climate Change News and Climate Change Current Events is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to