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Concentration of CO2 in the Atmosphere

The Many Co-Benefits of a Good Climate Solution

John Gage

The cheapest and quickest way to reduce climate pollution is to put a price on it and let efficient market forces unleash the investment, innovation, and transition to clean energy required. We can protect household budgets during the transition, protect US businesses from free-polluting foreign competition, and strongly encourage all other countries to follow our lead, with a simple three-part solution:

  1. Carbon Fee: Charge fossil fuel producers and importers a carbon fee based on the climate pollution generated from their products, starting at $15 per ton of CO2e and increasing it by $10 more each year;
  2. Dividend: Return all the money collected back to all households each month equally – one share per adult and a half-share per child – to recoup each of us for damages from the pollution; and
  3. Border Carbon Adjustments: Put a corresponding carbon fee on energy-intensive imports from countries that don’t match our carbon price and remove the fee from our exports to keep the US globally competitive.

The Energy Innovation and Carbon Dividend Act of 2019 (HR 763) does all that, and the effects are powerful.

Fossil fuel producers will pass their steadily increasing costs down to businesses, incentivizing them to invest in, develop, and use non-polluting energy solutions. Businesses will pass their temporarily higher energy costs down to consumers, and compete to reduce those costs. Consumers cannot pass down their higher costs, but their purchasing power is protected by the dividend. Producers and consumers will make more fully-informed choices and clean energy options will rapidly become less expensive than polluting ones through economies of scale.

Independent studies from Columbia University, Regional Economic Modeling Inc., and the US Treasury have identified many benefits from this climate solution:

It’s Effective: Carbon emissions will be reduced by 40% by 2030 and 90% by 2050. This will hold warming below 2˚C this century when other countries follow our lead.

It’s Bipartisan: Over seventy members of Congress – from both parties – are cosponsors.

It’s Good for People: Two-thirds of all households will break even or receive more in their dividend than they spend due to higher prices from the fee. See how you’ll do here: energyinnovationact.org/carbon-dividend-calculator/.

It Cleans the Air and Water: Sulfur dioxide and mercury emissions from the power sector will decline by more than 95 percent and emissions of oxides of nitrogen decline by about 75 percent by 2030 relative to a current policy scenario. This will yield significant health benefits.

It Helps the Poor: The lowest 10% of households by income will get an average of 9% more income by year five simply because they have smaller-than-average carbon footprints. This benefit is available to everyone simply based on their carbon footprint.

It Creates Jobs: 2.1 million new jobs (net) will be created in ten years from the extra spending enabled by low-income households.

It Protects Businesses: The border carbon adjustment will protect US businesses and jobs by putting the cost of pollution into the price of imports and taking it out of exports in trade with countries that haven’t yet matched our carbon price.

It Has Global Reach: Forty-six other countries are already using or implementing carbon pricing to reduce their carbon emissions, but most of their prices are too low according to US, IMF, and World Bank economists. The border carbon adjustment provision will strongly incentivize all other countries to match our carbon price, driving global emissions down as required for our safety.

We have an opportunity to reap the economic and job benefits of leading the next big global transition, rapidly reduce pollution, and make great strides towards ensuring a safe climate for our children and life on Earth. To do so, we must unleash the full power of an efficient energy market by putting a sufficient price on climate pollution. This will supercharge the green economy.

The Energy Innovation Act solution has sound science and economics behind it and offers many co-benefits, but Congress cannot do this without our help. Status quo-profiting businesses and politicians supported by them have actively worked against effective policy changes for decades. They got the benefits; we got the pollution and are paying for it. If we want change, we must create the political will for it ourselves. By speaking up together for our common interests we can make our democracy work for all of us. Please learn more about it and add your support now. Citizens can write Congress: cclusa.org/energy-innovation-act/. Businesses, organizations, and elected leaders can endorse the bill: energyinnovationact.org/endorse/. Thank you!

John Gage is Citizen’s Climate Lobby’s New Hampshire State Coordinator

 

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