Climate Solutions: The Real Possibility of a Fee and Dividend
By George Smith
It has been eight weeks since I marched down the streets of New York with more than 300,000 dedicated souls from around the world as part of the People’s Climate March. That week, I rearranged my life and work here in Richmond to join with other people, from all walks of life, who acknowledge the crisis that is upon us.
While some people outright deny global warming, many others just don’t want to think about it. The people I marched with have the psychological freedom to see what is coming as the result of too much carbon in the atmosphere. And they have the courage to sound the alarm.
The evidence is overwhelming: This past May, June, August and September were the warmest on record. Changes in nature, from animal behavior and plant growth cycles to sea level rise and extreme storms, are our new realities. The proliferation of jellyfish in our oceans and the stranded polar bears and sea lions are the beginning of what could become a drastic scenario if we do not stop the steady and constant rise of CO2.
You likely saw video footage of the march. You saw the streets filled with people carrying signs. Big puppets. Sunflowers. It was a peaceful, meaningful gathering. You had to be there to be uplifted by the hopeful energy that we experienced together. Lots of information was shared.
But you may not have heard about the faux checks. I was part of a group that handed out fliers that looked exactly like checks for $4,800 — the annual dividend a family of four could receive if a revenue-neutral carbon fee and dividend were enacted.
A carbon what? Here’s the slow-motion replay: A fee and dividend program places a fee, or tax, on fossil fuels when they are extracted from the ground. The money is collected — but not held — by the government; this is why it is revenue-neutral. The IRS would send the revenue to citizens as a dividend check. The faux checks we distributed made the point that you could receive a substantial amount of money if we made polluters pay for their use of cheap, abundant fossil fuels.
This approach uses the free market to correct a problem that exists in our economy. Air pollution has been allowed to accumulate in our atmosphere without anyone accepting responsibility for it. A hundred years ago, when industrialization was revving up, we did not foresee any problems with burning fuels to run motors that generated exhaust. Gray puffs of smoke quickly escaped; there was no need to contain them.
But we pay for dealing with all our other waste products. Take trash collection: We either contract for it with a private business or receive it as part of the municipal services that our taxes support. Why should air pollution be any different? If you produce it and foist it upon the rest of us, you should pay for the damage it causes.
Fee and dividend will increase energy efficiency, create jobs, boost the economy and enhance national security, all while reducing CO2 emissions. This is the conclusion of a study by REMI, the highly respected, nonpartisan Regional Economic Models Inc. It modeled a carbon fee and dividend program that places a $10 fee per ton of CO2 at the point of its extraction in the form of fossil fuel. The fee increases by $10 every year. The resulting dividend would more than cover the increased energy costs that can be expected to be passed on to consumers.
And consumers have choices: Either pay the higher prices, or opt for renewable energy, or do without. Bike instead of drive. Insulate your home instead of heating and cooling your yard. It is up to you. In general, though, high energy costs will lead to increased energy efficiency and a level playing field for wind, solar and geothermal.
This carbon fee and dividend program has a lot of support because it makes economic sense. Two Republicans — George Shultz, secretary of state under President Reagan, and Henry Paulson, Treasury secretary under George W. Bush — have endorsed it.
Across the country from today through Sunday, many events have been planned under the umbrella of the Pricing Carbon Initiative to raise awareness of the need to put a price on carbon. This weekend, if you are around Virginia Commonwealth University and Carytown, you might happen upon volunteers distributing play money that represents the portion polluters would owe. When you hold these bills in your hands, you realize that we have been letting money — just like exhaust fumes — slip away from us and accumulate in places it should not be. It is time for fossil fuel users to pay up.
George Smith is the owner of Commonwealth Business Systems in Ashland and an environmentalist, volunteering with the Richmond chapters of Sierra Club and Citizens Climate Lobby. Contact him at ten.k1571725804nilht1571725804rae@y1571725804rnehe1571725804groeg1571725804.
This op-ed was published in the Richmond Times-Dispatch on Nov. 14, 2014.