That could turn out very well for the economy and the climate

Researchers have calculated that implementing a basic income could double global gross domestic product (GDP) while reducing greenhouse gas emissions.

Much has already been said and written about basic income. Some see it as a promising idea that could combat poverty, while others are concerned that its financial viability is questionable and that it could have negative effects on the labor market. In a new study published in the journal Cell Reports Sustainability, researchers have once again tackled this controversial topic. And the findings show that a basic income may not be such a bad idea after all.

More about basic income
Basic income is an idea in which every citizen or resident of a country receives a fixed amount from the government on a regular basis, on top of their own salary. The main aim of this is to provide everyone (regardless of their social or economic background) with a basic level of financial security. A basic income offers several benefits. It eliminates the complicated system of benefits and benefits, which significantly reduces bureaucracy. Furthermore, basic income could be crucial for the future, especially as more and more people may be left out of the loop due to ongoing technological developments. However, despite the advantages, there are also many opponents. A common argument is that it would make people lazy. Why would you still work if you receive a significant amount from the government every month?

According to a recent analysis, regularly distributing money to all people around the world could be good for the economy and the climate. This could even result in a significant increase in global gross domestic product (GDP). And by financing basic income through taxes on carbon emissions, we can also reduce environmental pollution. “We suggest that if we combine basic income with environmental protection, we will kill two birds with one stone,” said researcher U. Rashid Sumaila.

Fishing subsidies
Sumaila thinks that a basic income can solve many problems. Previously, he actively campaigned for an end to harmful subsidies for fisheries on a global scale. But this has not only brought benefits. People who depend on fishing for their livelihood, for people in developing countries, say they need these subsidies. “A possible solution to this is to give people a basic income,” Sumaila suggests. “That way we can pursue sustainability goals without endangering people’s livelihoods.”

Basic income
Providing a basic income is not cheap. The research team has calculated that it will cost $41 trillion to provide a basic income to the entire world population of 7.7 billion people. If only people living below the poverty line in less developed countries received a basic income, it would cost about $442 billion. But the benefits are significant. If all people on earth were granted a basic income, it could increase global GDP by $163 trillion, which represents about 130 percent of current GDP.

According to the analysis, every dollar invested in implementing basic income could generate as much as $7 in economic impact. Why? When a dollar is spent, the money will circulate through society: some of it will be spent on food or rent, then it will be used by others for their own expenses, and so on. “The dollar will trickle down through society,” says Sumaila. “Our calculations show that the impact each dollar has on the economy will be far greater than its original value.”

The team also explored ways to finance basic income. And they calculated that taxing carbon emitters could raise about $2.3 trillion annually. This would be sufficient to provide a basic income to all people living below the poverty line in less developed countries. Sumaila realizes that introducing carbon taxes can be a challenge. Still, he thinks it’s worth considering. “We are not focused on taxing everyone, but only those who pollute the environment,” he underlines. “They should pay for the damage they caused.”

Other options
The researchers also propose alternative financing options. For example, the basic income could also be paid by taxing plastic pollution. Or the money that is currently intended for harmful subsidies for oil, gas, agriculture and fishing. These approaches can address two important global challenges: reducing environmental damage and combating poverty.

The basic income is not just an idea on paper; it is already being practiced in certain parts of the world. And several practical examples have shown the benefits it can bring. Take Indonesia for example, where villages that receive a basic income experience significantly less deforestation compared to villages without a basic income.

Moreover, Sumaila emphasizes that basic income can also be a proactive program. It can increase the resilience of communities when faced with crises such as pandemics or natural disasters. “During COVID-19, we saw governments worldwide come up with various programs to support people who suddenly lost their income due to the pandemic,” Sumaila notes. “If there had been a basic income then, we wouldn’t have had to act so hastily.”

In short, the study shows how basic income can provide a possible solution to several challenges we are currently facing in the world. But are countries actually open to it? Time will tell.