Carbon, Climate, and COVID-19 Part 3

A three-part series on causes, effects, resolutions and connections

Part Three

The second part of this three-part series covered how travel, transportation and trade are essential pieces of policy creation to combat negative economic impacts.  The third and final part brings it all together with an analysis of today’s current industrial food system.

Comorbidities: Energy and the Food System

At every stage of production, today’s industrial food system is heavily dependent on cheap fossil fuels for energy and materials. Like the economic system as a whole, it is less resilient and sustainable than it could be. And like the economy, it does not always reliably promote human well-being. Poor diet is now the leading cause of poor health in the United States. Today’s Standard American Diet (SAD) of highly processed “foods” explains why so many people in such a wealthy country suffer from chronic illness. According to the Centers for Disease Control, in 2018 direct health care spending in the U.S. was $3.6 trillion (17.7 percent of GDP), or $11,172 per person. Ninety percent was for people with chronic conditions.

Diabetes and other chronic diseases impose enormous costs on our health care system and on our economy as a whole.  Couple that with the Coronavirus and we are driving our health care system into debt. The Milken Institute calculated that the total U.S. cost in medical costs and lost productivity in 2016 was $526.6 billion for diabetes alone, with almost 27 million cases.  In addition, the total cost of obesity-related diseases was $1.72 trillion, or 9.3 percent of GDP.

The current viral pandemic is putting enormous stress on an already-challenged health care system. Diabetes Type II and other metabolic disorders are important risk factors for COVID-19 morbidity and mortality. It is estimated that only 12% of Americans are metabolically healthy today. Black, Hispanic, and Native Americans suffer from diabetes and other metabolic disorders at higher rates than white Americans.

Resilience: Rent, Wealth, and Power

The extreme inequality of income and wealth in America goes far toward explaining why the economic impact of the pandemic has been more disastrous in the United States than in other developed nations. Before COVID-19 hit the U.S., most American households had no substantial emergency fund and carried loads of debt—student debt, credit card debt, mortgage debt. Even with “Obamacare”, many Americans were (and still are) uninsured or underinsured. The racial wealth and health gap helps to explain the racial disparities in COVID-19 infection rates and death rates.

Private decisions AND public choices are distorted by opportunities to garner unearned incomes from fossil fuel rents. Industry profits can and do finance lobbying and campaign contributions intended to secure preferential legislation to protect and enhance their advantages. If national constitutions would specify that hydrocarbon rents were to be collected in trust for the citizenry, fewer avenues would be available for wasteful, rent-seeking and government corruption. If an international treaty for sharing oil rents had prevented endless oil wars and the terrorism backed by oil regimes, it might have saved thousands of lives and trillions of dollars.

In the happy thought experiment addressed in part two of this series, the Americans of 2020 are healthier and wealthier. They eat real food, they have high-functioning immune systems, and they rarely succumb to COVID-19. A citizens’ dividend financed from hydrocarbon rents has improved citizens’ nutrition, health care, housing, education, and retirement security while protecting the climate and the environment.

Unfortunately, hydrocarbon taxes alone are insufficient to internalize major externalities, to moderate the market power of favored industries, or to prevent the waste of natural resources. Hydrocarbon taxes alone cannot be a sustainable source of substantial public income. To avoid climate catastrophe, hydrocarbon extraction and emissions rates must be driven toward zero and hydrocarbon revenues must wither away. As noted, the principle of justice, suggested by the tax-and-dividend proposal, seems nonsensical if it is applied only to CAC and not to other natural resources.

To ensure a large and continuing citizens’ dividend, broaden the tax base to include more of nature’s gifts—land, water, air, sunlight, living ecosystems, even the electromagnetic spectrum—as well as the added values that the activities of governments and communities bestow on particular land sites.

The world experienced pandemics long before air travel and Big Oil. It is too early to say whether, despite medical advances, the risks and costs of epidemics will rise during the twenty-first century. As we observe future trends, we might ponder a further question that history has yet to answer: How would humanity manage a public health crisis in a world of justice and equality?

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