Carbon Fee and Dividend Policy by Citizens' Climate
Pitch
A revenue-neutral carbon fee-and-dividend system (CF&D), steadily rising price on carbon (fossil fuels), dividend returned to the people.
Description
Summary
It is a fee based on the amount of carbon in a fossil fuel. Fossil fuels such as oil, gas and coal contain carbon. When burned they release the potent green house gas, carbon dioxide (CO2), into the atmosphere. The fee is based on the tons of carbon dioxide the fuel would generate, and it would be collected at the earliest point of entry into the economy — well, mine or port. The fee would start out low — $15 per ton — and gradually increase $10 each year.
Is this proposal for a practice or a project?
Practice
What actions do you propose?
Carbon Fee and Dividend legislation puts a fee on the amount of carbon dioxide in fossil fuels. This fee is assessed at the source of the fuel: at the mine, well, or port of entry. The fee starts out low and increases annually in a predictable manner until we reach a safe level of emissions. The fee is collected exclusively at the first point of sale, and 100 percent of the revenues are reimbursed directly to all American households, shielding them from the financial impact of the transition to a clean energy economy. Because the fee (and the price of fossil fuel) goes up predictably over time, it sends a clear price signal to begin using fossil fuels more efficiently or replace them with low emissions energy. That price signal motivates investment to move into low emissions technologies, as the true cost of fossil fuels is brought back onto the balance sheets of those who sell them. The rising cost of fossil fuels increases the demand for low emissions products, making them even less expensive as they reach mass production. This clear and easy-to-understand price signal (increasing fossil fuel costs and decreasing green technology costs) drive the transition to a green economy. This transition will reduce greenhouse gas emissions, stabilizing our climate and the health of our oceans.
Who will take these actions?
Upon enactment, impose a carbon fee on all fossil fuels and other greenhouse gases at the point where they first enter the economy. The fee shall be collected by the Treasury Department. The fee on that date shall be $15 per ton of CO2 equivalent emissions and result in equal charges for each ton of CO2 equivalent emissions potential in each type of fuel or greenhouse gas. The Department of Energy shall propose and promulgate regulations setting forth CO2 equivalent fees for other greenhouse gases including at a minimum methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons (HFCs), perfluorocarbons, and nitrogen trifluoride. The Treasury shall also collect the fees imposed upon the other greenhouse gases. All fees are to be placed in the Carbon Fees Trust Fund and be rebated to American households as outlined below.
Where will these actions be taken?
A global CF&D adapted by all nations would would be fair and have the most impact
In addition, specify the country or countries where these actions will be taken.
No country selected
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Country 5
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Impact/Benefits
What impact will these actions have on greenhouse gas emissions and/or adapting to climate change?
A study from REMI shows that carbon fee-and-dividend will reduce CO2 emissions 52% below 1990 levels in 20 years and that recycling the revenue creates an economic stimulus that adds 2.8 million jobs to the economy.
A structured rising price on greenhouse gas emissions will focus business planning on optimizing investment priorities to thrive in a carbon-constrained world.
Additionally, Carbon Fee and Dividend is projected to prevent over 230,000 premature deaths over 20 years from improved air quality.
What are other key benefits?
Carbon Fee and Dividend does not increase the size of government, require new bureaucracies or directly increase government revenues. The dividend increases real disposable income, protects personal spending decisions and will recruit widespread, sustained engagement.
Finally, Carbon Fee and Dividend is elegant in its simplicity, transparent in its accessibility to public scrutiny and clear in its signals and benefits.
Costs/Challenges
What are the proposal’s projected costs?
100% of the net fees from the carbon fee are held in a Carbon Fees Trust fund and returned directly to households as a monthly dividend.
About two-thirds of households will break even or receive more than they would pay in higher prices. This feature will inject billions into the economy, protect family budgets, free households to make independent choices about their energy usage, spur innovation and build aggregate demand for low-carbon products at the consumer level.
Timeline
A study from REMI shows that carbon fee-and-dividend will reduce CO2 emissions 52% below 1990 levels in 20 years and that recycling the revenue creates an economic stimulus that adds 2.8 million jobs to the economy.
About the author(s)
https://citizensclimatelobby.org
By:
Citizens' Climate
