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How Leviticus can save the world

How Leviticus can save the world

If Oscar Wilde was right and a cynic is someone who knows the price of everything and the value of nothing, we might be living through the most cynical age in history.

Once limited to those aesthetes disappointed that ‘the people’ would rather read a Penny Dreadful than sit through all 15 hours of Der Ring des Nibelungen, the complaint that we confuse price and value is now ubiquitous. ‘If people aren’t getting any happier as they go on getting richer,’ Jonathan Porritt, Chairman of the Sustainable Development Commissions has written, ‘why do we continue to trash the planet and turn people into consumptive zombies in pursuit of economic growth?’ Today, it is hard to move without elbowing someone in their ennui.

But this particular charge of cynicism is truer – literally truer – than we sometimes realise.

‘Climate change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen.’ So wrote Sir Nicholas Stern in his report on The Economics of Climate Change last autumn. The market failure that so shocked him was the way in which the true value of the energy we consume has never been fully reflected in its price.

We have a reasonably good idea what that price is. The Office for National Statistics tells us that, for example, the average house spends around £600 a year on gas and electricity, that domestic energy prices increased by 11 per cent in real terms in 2005 but that over the last 15 years they have fallen by nearly 20 per cent. If most of us don’t have such figures at our fingertips it is because, as the ONS also reminds us, the average household spends less than 3 per cent of its annual expenditure on gas and electricity.

And therein lies the problem. Not only does such a comparatively low price fail to reflect the true value of energy to us (a value we understand only during a power cut or when the boiler explodes) but it fails to reflect its true value to everyone. The energy we pay for costs the planet somewhat more than our quarterly bill suggests.

As with domestic energy, so with the fuel that allows us to travel and consume at the rate we do. What we pay for our holiday flights, our tank full of 4-star, or our air freighted, out-of-season green beans rarely reflects what those items actually cost. Their true value – in carbon emitted, heat trapped, climate changed and lives lost – is not captured in the figure that flashes up before us at the pump or checkout, exorbitant as that may seem at the time. Somewhere something or someone is picking up the tab. Price and value don’t add up.

How should we respond to this? The traditional answer is tax: inflate the price of a good or service so that it reflects, in theory, its true worth. Climate change, however, seems to be breeding a consensus that what we need is not more tax but new markets. Rather than trying to calculate the actual cost to the planet of each tonne of greenhouse gas we emit (an impossibly difficult task for such a complex system), we need, so the argument goes, to calculate how much greenhouse gas we can safely emit (a ‘cap’) and then create a mechanism by means of which these emissions can be traded. Cap, supply, and demand will, between them, assign a price to each tonne, emitters will be forced to pay out or change their behaviour, the playing field will be tilted in favour of efficiency and low emissions, and the planet saved. In theory.

Such ‘cap and trade’ schemes underlie many of the most talked-about responses to climate change, from the existing EU Emissions Trading Scheme to the more ambitious idea of global Contraction and Convergence. What is less talked about, indeed what has not even been noticed is the way that chapter 25 of the book of Leviticus prefigures all such schemes.

Leviticus 25 is known today, if at all, through the work of Jubilee 2000, latterly the Jubilee Debt Campaign. Its long-standing battle to cancel the massive, international debts that impoverish many low-income countries has inspired admiration across the political spectrum.  It has also helped transform the popular understanding of the Jubilee from bunting, flags, street-parties and latent monarchism to something closer to the biblical reality.

‘Leviticus Chapter 25 is a passage that makes Das Kapital look tame,’ wrote Will Hutton in the Observer in October 1999. ‘It is no longer Morris, Keynes and Beveridge who inspire and change the world - it's Leviticus.’ That such a widely respected commentator should see fit to praise Leviticus in public, a book not normally lauded in modern Britain, is testimony to the astonishing impact of Jubilee 2000.

Impressive as its work has been, however, the campaign has unwittingly given the impression that the Jubilee of Leviticus 25 was essentially about cancelling debts. In reality, although debt cancellation was central, it was embedded in a comprehensive social system that made the Jubilee ultimately about more than simply wiping the slate clean. Three elements of this system stand out as relevant.

First, the people of Israel did not own the land in which they lived. Oppressed, enslaved, escaped and now finally about to enter the land they had been promised, they are told by their redeemer, ‘the land must not be sold permanently, because the land is mine and you are but aliens and my tenants.’ They were leaseholders not freeholders. After all they had been through, they could be excused for feeling a little deflated.

Second, the land was distributed equitably. The long (and, to us, irredeemably tedious) chapters in the books of Numbers and Joshua that record in meticulous detail the division of the land between the Israelites ‘according to their clans’ are, in reality, crucial to any understanding of why Israel was to be a light to the nations. Unlike contemporary peoples in which a small group of landlords owned and rented the land to a nation of dirt-poor tenant-farmers, Israel was to distribute land to every clan, according to its size and need, securing that distribution through the subsequent cancellation of debts at the Jubilee.Third, in between Jubilees, land could be traded freely. People could, as it were, sell their inheritance, depending on their circumstances, safe in the knowledge that every 50 years debts were cancelled and the land returned to original owners. In reality, what they were trading was not land but usufruct, ‘the legal right to use and derive profit from property that belongs to another person, as long as the property is not damaged.’

Put into modern terminology, the Jubilee achieved (or was intended to achieve) a great many things. It protected civil society by securing the long-term cohesion of extended family groups. It maintained a free market but averted the problems of economic and social polarisation so often associated with free markets. And, crucially, it guaranteed everyone equal access to natural (and thereby financial) capital. It sought, in other words, to combine environmental ethics, equality of opportunity, a stakeholder economy, and a healthy level of social capital.

This was ambitious (to put it mildly). There is little evidence that the Jubilee was ever implemented and still less that the people even tried to live up to its high expectations. Similarly, even after the successes of the Jubilee Debt Campaign, we are liable to dismiss the full vision of Leviticus 25 as utopian or unrealistic. It tries to achieve too much and, in any case, we have no foundational land distribution documents on which to base any modern attempt to imitate it.

Yet, environmental cap and trade schemes offer the perfect opportunity to see that vision become a reality, albeit with more limited ambitions. Take Domestic Tradeable Quotas or DTQs as an example. This, more popularly known as Carbon Cards, Credits or Units, is a national cap and trade scheme, aimed reducing individuals’ direct carbon emissions. It allocates every adult ‘emissions rights’ or ‘carbon units’, on a recurrent, free and equal per capita basis. People surrender units whenever purchasing fuel, gas or electricity. Those who emit at a below-allocation level can sell their surplus units onto a carbon market, thereby making a profit, whereas those who emit at above allocation levels require additional units that they must buy on the market.

DTQs have all the advantages of the market, with few of its disadvantages. The system allows individuals to spend their carbon allowance as they choose, but places increasingly severe restrictions on profligacy. It creates an incentive for competent, careful and efficient behaviour. The recurrent allocation prevents long-term energy or fuel impoverishment or polarisation.  Not least, the gradual reduction of the carbon cap by an independent Carbon Policy Committee reduces national carbon emissions without derailing the economy in the process.

In all this, DTQs directly imitate the principles behind Leviticus 25. People are granted a fair share of common natural capital, in this case the atmosphere rather than the land. As with Leviticus 25, they do not (indeed cannot) own that natural capital but they can use or trade it as suits them. Profligacy will cost but never permanently impoverish them. In the long term, and in spite of what they do with it, the reallocation of carbon units effectively cancels all debts. Capital is returned to them for the next cycle.

Cap and trade schemes are all the rage. DTQs is currently being studies by a number of bodies and is the subject of a private member’s bill. The EU ETS has recently been expanded to include aviation. Contraction and convergence is widely seen as the most just long-term response to climate change. Cap and trade schemes are even being explored as a possible response to wider social problems.

Wherever they lead us, the parallel currencies set up through such schemes reveal a promising way of bridging the gap between price and value. No less remarkably they put the book of Leviticus politically centre stage, albeit heavily disguised. Perhaps Will Hutton was guilty not of hyperbole but of understatement when he wrote in the Observer in 1999. Leviticus may not only inspire and change the world. It may save it.

This article first appeared in The Difference Magazine.

Posted 15 August 2011

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