The benefits of a carbon fee and dividend system
What if you lived in a beautiful place and found a great caterer to bring all your meals to you at a bargain price, but the caterer left piles of trash in your yard? Would you put up with it because you wanted to keep costs low? Would you be willing to pay more to have the trash hauled away?
It’s a bit of a silly analogy, but it roughly parallels our current energy policy, with the food being our energy, the caterer being the fossil fuel industry and the trash being the carbon dumped into the air. Unfortunately, we don’t see the immediate effects of the carbon in the air, so it’s a bit easier to deny than trash in the yard. Currently we’re spinning our wheels, with some people saying there is no trash in the yard, some people saying the caterer isn’t the one leaving it, but most people saying it’s the caterer but the prices are so good they’re not yet sure they want to do anything about it.
Now throw in a new option — getting a new caterer who prepares food that is just as good, although slightly different, and at the same price, and who leaves no trash. It seems the obvious answer, and the good news is that we can have it. The quick answer is to switch to energy that doesn’t come from fossil fuels (solar, wind, nuclear, geothermal, etc). In order to do that in a way that doesn’t cause economic harm, the process will be what the Citizens’ Climate Lobby calls “carbon fee and dividend.”
Keeping with the analogy, no one has to change caterers, but there is now a fee placed on all the trash. That fee is collected and then given back to consumers. The caterer whom few people were using before because that caterer seemed expensive is now competitive with the caterer leaving the trash, and consumers have extra money in their pocket to switch over. Check out the details at http://www.citizensclimatelobby.org.
There are winners and losers with a carbon fee and dividend. The trashy caterers will gradually lose customers, but new clean caterers will easily fill in. Consumers who choose to stay with the trashy caterers will end up paying more, while those who quickly switch over will save money.
On the local level, natural gas will get an early boost, as it has a smaller footprint than coal, but will later see a decline as even cleaner energy replaces it. Smart energy companies will do a cost-benefit analysis and see at what point they should move from their current methods to cleaner alternatives. They will know exactly how the carbon fee increases, allowing them an economic certainty. The rewards, as they should, will go to those willing to adapt and those providing the clean energy that we need.
Interestingly, while there are winners and losers, the winners outnumber the losers. A study done by Regional Economic Modeling Inc. (REMI — a firm almost all states use to predict the impact of proposed bills — found that the proposed carbon fee and dividend would create millions of jobs and provide a boost to the economy with virtually no disruption while switching us over to the clean energy we need. Our valley will come out ahead, with consumers having more money to spend from their dividend and new clean energy continuing to spread.
Even if you don’t believe as I do that climate change is the biggest threat to our world today, you should be able to support carbon fee and dividend, as there are virtually no downsides. And if I’m right, and climate change continues to shorten our winters, warm our rivers, kill our forests, and give us weirder and more threatening weather, then we need to do everything we can as soon as we can to stop it. Unfortunately, even if we switch immediately to clean energy, we will suffer through several decades of warming before gradually returning to a stable climate. But if we do nothing (and nothing is exactly what we’re doing right now, because debating whether the caterer is leaving trash isn’t taking any action), not only will we go through several decades of warming, but we will leave a unstable, warring, economically depressed world for future generations.
But rather than focusing on the negative, which is scary, let’s look toward the relatively simple, economically beneficial alternative: a carbon fee and dividend. It’s something everyone can and should support.
Peter Westcott of Missouri Heights is a member of Citizens Climate Lobby.
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