One of the bright spots this Earth Day is the increasing enthusiasm for a plan to fight global warming that giant oil firms, Democrats and many Republicans agree on. Congress should pass a law authorizing a carbon fee and dividend strategy that would place a fee on fossil fuels and help create jobs in a strong economy.
While many Democrats and economists have backed carbon fee and dividend for years, it may surprise you to learn who else supports it now.
How about Exxon Mobil? They’re on board. Ditto Royal Dutch Shell, BP, Shell Canada and Suncor — all on the “big oil” first team. How about Rex Tillerson, U.S. Secretary of State? He has called for a carbon tax. And Republican statesmen such as George Shultz, James A. Baker and Henry Paulson — calling themselves the Climate Leadership Council — have formally proposed a Republican carbon fee and dividend plan.
Why does much of big oil support this? One reason is that the oil companies — most of which years ago publicly acknowledged man-made climate change — know that the likely alternative to a predictable carbon fee and dividend law is a patchwork of unpredictable federal and state regulations that makes their capital-intensive planning difficult and uncertain.
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Republicans generally are warming to the idea because it is market-based and revenue neutral.
Here’s how it works. A fee is placed on carbon dioxide emissions. This is collected at the first point of sale: the mine, the refinery or the gas well. One plan from Citizens’ Climate Lobby calls for a fee of $15 per ton on CO2 emissions in the first year. That would grow by $10 per ton per year. Another plan, put forth by Republicans, sets a fee of $40 per ton in the first year, with smaller raises to follow.
Either plan would create a big pot of money, but the government does not get to keep the funds. Instead all money collected, minus minimal administrative costs, would be distributed to every U.S. household in equal per-person dividend payments.
That’s the “dividend” part. Of course, prices of goods manufactured with fossil fuel energy will rise, but the monthly dividend will allow low and middle-income families to adjust. About two-thirds of households will break even or receive more than they would pay in higher prices. This will be a positive jolt to family earning power and a net job creator for the economy. And yet it does not limit your freedom to make your own choices.
To keep U.S. businesses competitive in our global economy, tariffs would be charged for goods entering the U.S. from nations without carbon fees. And rebates would be given to U.S. firms that export goods to nations without the carbon fee.
Higher prices on carbon-based fuel will spur development of alternative sources of energy. Businesses and individuals will opt for renewables as they become less expensive than fossil fuels. This plan will effectively reduce carbon dioxide emissions below 1990 levels in 20 years and help immediately to halt the rise in global temperatures that endangers human health, the natural environment, economy and national security.
A growing number of lawmakers support action on climate change. There are now 36 members of the Congressional Climate Solutions Caucus — half of them Republicans and half Democrats. The caucus was founded just last year.
Carbon fee and dividend is no pipe dream. It can make the difference. It has growing bipartisan support and it’s time for Congress to make it law.
Dick Jones is a member of the State College Chapter of Citizens’ Climate Lobby. Learn more about carbon fee and dividend at www.citizensclimatelobby.org or contact PaStateCollege@citizensclimatelobby.org.