Climate watch: How would Pennsylvanians benefit from the Energy Innovation and Carbon Dividend Act?
Sixty-one percent of Pennsylvania households would see a net financial benefit if the Energy Innovation and Carbon Dividend Act (EICDA) becomes law. And the gain would be greater than the state average for most families in the 12th and 15th Congressional Districts.
Those are among the findings by a team of MBA students from Duquesne University’s Palumbo-Donovan School of Business.
Passage of the act would also create jobs, they found.
“Pennsylvania would benefit from the generation of an estimated (net) 77,000 jobs in 2025 and 97,000 jobs in 2035,” the report says. “The increased demand for clean energy (created by the bill’s passage) provides Pennsylvania residents with excellent employment opportunities in positions that pay eight percent to 19 percent higher than the current mean hourly wage in the United States.”
Citizens’ Climate Lobby’s Pittsburgh chapter asked Duquesne University to examine the impact of the proposed U.S. law on Pennsylvania specifically. CCL backs passage of the EICDA which would directly send revenue generated from fees on carbon production at coal mines, oil refineries and gas wells to American households in the form of a monthly dividend.
The researchers used CCL’s peer-reviewed carbon dividend calculator to estimate the impact of the dividends. They compared the effects of rising utility costs and dividend distributions by household occupant size, income and location. ZIP codes were selected from each of Pennsylvania’s 67 counties to provide district-specific influences.
They found that “…the average family household with an income between $55,000 to $95,000 would experience a net benefit of $126 in the first year. Overall, 61 percent of Pennsylvania households stand to receive a net benefit in the policy’s first year.”
In general, lower-income and middle-income families would benefit more from the dividend which increases in size each year because the fee on carbon rises annually. Nationally, CCL says that two-thirds of households will gain or break even while one-third, mostly the wealthier, will see their fossil-fuel-related expenses exceed the dividend.
Locally, the large majority of households in Rep. Glenn Thompson’s 15th Congressional District and Rep. Fred Keller’s 12th District would see their dividend gain exceed the state average. That’s partly because the household income in those districts is below the state norm.
Pennsylvania’s pre-COVID-19 recession median annual household income was around $64,000 while in Rep. Thompson’s District it was just over $51,000 and in Rep. Keller’s District was around $53,000.
One group does worse than others in the fee-dividend equation. That’s single people living alone. The Duquesne simulations consistently show their rising expenses slightly exceeding their monthly after-tax dividend checks. That’s due partly to tax laws that privilege families and partly to fixed costs, such as rent, that disadvantage singles.
To calculate the impact of the EICDA on Pennsylvania jobs, the researchers used data from a Mid-Atlantic economic study by Regional Economic Models Inc. They then calculated Pennsylvania’s share of the regional employment pie to determine that a net gain of 77,000 jobs could be created here by 2025 and 97,000 by 2035.
“Health care services, retail trade and other services experience the highest job growth and represent 52 percent of job creation expected as a result of the bill,” the report says.
Why would health care and retail benefit? The report explains that “The job growth is related to households receiving a dividend, which increases demand in consumer goods…” as well as creating jobs in the clean energy sector.