Op-ed: Carbon tax provides market-based solution to climate change
Imagine receiving a check for $390 each month, deposited directly into your checking account, through no effort of yours except that you had previously voted for visionary members of Congress. Indeed that is what a family of 4 would receive if carbon fee and dividend legislation were to be enacted by the Congress, according to a new study by the highly-respected economic analysis firm REMI (Regional Economic Models, Inc.). The study was commissioned by Citizens' Climate Lobby (CCL).
Last week I joined 7 other CCL volunteers from Utah in Washington, D.C., to ask our federal elected officials to support such a carbon fee and dividend (F&D) policy. We were among 600 other volunteers who together visited over 500 members of Congress or their aides. Our visits were all part of actions by the non-partisan, non-profit Citizens Climate Lobby, a rapidly growing organization of committed volunteers who are creating the political will for a stable climate. We are taking democracy into our own hands and not leaving our future to the paid lobbyists and special interest groups.
The REMI study modeled the effect of a fee and dividend policy. In this plan, a fee would be charged on the carbon-based fuels (coal, oil, and natural gas) at the point they enter the economy (the mine well head, or port of entry) based on the amount of carbon dioxide they produce when burned. The fee would increase by a defined amount yearly for 20 years. The revenues would be distributed to households equally.
The results after 20 years are striking: 2.8 million jobs would be created; the economy would grow by $1.375 trillion more than the economy with no carbon fee; 227,000 lives would be spared due to reduced air pollution; and carbon dioxide emissions would be reduced by 52 percent.
Sound too good to be true? Not really. By returning all revenues to households, consumers would spend their dividend, adding to demand for goods and services. And energy prices actually decrease after the 11th year, as less-expensive energy sources come on line. Americans would enjoy better health as coal-fired power plants and other dirty energy sources are phased out and their toxic fumes eliminated.
This market-based solution contrasts quite markedly to the EPA regulations proposed by President Obama. The EPA regulations pertain only to coal-fired power plants. By contrast, F&D's effects would ripple through the entire economy. Also, the elevated cost of electricity from EPA regulations would affect the poorest citizens most severely. By returning the dividend to households, two thirds of people would receive more in their dividend checks than they would pay for the increased cost of energy and goods, and that would include the poorest among us. Also our proposal would not grow government, thus could appeal to both political parties.
After a long day of lobbying, Rhode Island Sen. Sheldon Whitehouse addressed the CCL volunteers. He suggested that the tipping point that will lead to action and policy on global warming is probably closer than most people think. Many who attended the conference have the same feeling. Our members of Congress and/or their aides listened carefully and responded thoughtfully to our proposal.
There is ample reason for our elected federal officials to support carbon fee and dividend legislation whether or not they are concerned about the threats of global warming. Placing a fee on carbon sources and returning the proceeds to households would create jobs, build the economy, improve public health, and help stabilize the climate.
David Folland is a retired pediatrician and the volunteer co-leader of Citizens Climate Lobby, Salt Lake City Chapter.