Funding Lump Sum Payments With Carbon

With the United States now a signatory to the Paris Climate Agreement, and needing to make a rapid course correction to avert further climate woe, one action stands out. I encourage level-headed citizens to look beyond the misconceptions and political posturing to consider the merits of a carbon fee and dividend program. Its time has come.



A hallmark of the proposed Energy Innovation and Carbon Dividend Act is that, rather than being a prescriptive law that dictates how you use energy, the plan incentivizes sustainable practices and pays for itself without large federal bureaucracy. And it’s super-transparent.

Here’s how the program would work. Once the carbon comes out of the ground, a gradually rising fee is assessed at the first point of sale, with the fee amount based on the carbon content of the respective products (mostly coal, oil, and natural gas). The collected fees go into a Carbon Dividend Trust Fund.

Next comes the financial windfall. At the end of each month, the money collected as fees is then returned to American households as dividend checks, with each U.S. citizen receiving an equal share (1/2 payment for children under 18, limit two child payments per family).

During the pandemic we’ve seen how people value monthly lump sum payments. This one is self-funded!


So households aren’t hit with a new expense, the fund will advance the first month’s anticipated carbon dividend, to be recouped over three years from ensuing dividend payments.


The fee imposed at the source may be passed down, but the dividend pays it back to most consumers. Most families will receive a larger dividend payment each year than what they pay in increased prices for energy and other goods. This type of policy will benefit the majority of Americans, including the most vulnerable. Those with small carbon footprints make a profit and those with large footprints see a loss.

American businesses and individuals alike will seek cleaner, cheaper options. Projections suggest a carbon fee and dividend program could reduce our carbon-based emissions by 40% in 12 years.


The Act protects U.S. jobs by imposing a border carbon adjustment on products imported from countries that do not price carbon similarly. Meanwhile, goods exported from the U.S. receive a refund to remain competitive in the international market.

The Act is efficient, transparent, and not beholden to special interests. There are only a few exemptions to the fee (e.g., fuel used by farmers for agriculture), so political posturing doesn’t need to delay the legislation.


Let’s get more informed together. Read “How It Works” at https://energyinnovationact.org/how-it-works/. Whether you agree or disagree with the Act, have level-headed conversations with your friends and family to discuss the role of a carbon fee and dividend program in meeting our national goals. Discuss the alternatives. Then contact your elected representatives to inform their priorities.


We need bold action to shrink our carbon consumption quickly. The Energy Innovation and Carbon Dividend Act will spur sustainable practices while putting cash in American pockets.


For more information, see Citizens Climate Lobby.

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