Carbon Fee and Dividend Laser Talk

This page was updated on 05/22/18 07:43 CDT.

Question: What is Carbon Fee and Dividend?

Answer: Carbon Fee and Dividend is a policy proposal intended to charge producers for the costs of burning fossil fuels that are borne by society. Economists say it is the best first step to reduce the risk of catastrophic climate change.

CCL’s Carbon Fee and Dividend proposal [1] works like this:

  1. A fee is placed on fossil fuels at the first point of sale, as near as possible to the well, mine, or port of entry. This fee starts at $15 per ton of CO2-equivalent emissions, and increases each year by $10 per ton. This will require far less bureaucracy than pollution-point (power plants, factories, etc.) monitoring and enforcement.
  2. All of the net proceeds are then divided up and provided to American households, equally per person, as a monthly “carbon dividend.” About 58 percent of taxpayers would receive more in their dividend payments than higher energy prices would cost them. [2]
  3. A border carbon adjustment (BCA) is placed on carbon-intensive goods imported from or exported to countries without an equivalent price on carbon. This adjustment discourages businesses from moving to more permissive regimes and encourages other nations to adopt similar carbon pricing.

A predictably increasing carbon fee will send a clear market signal that will unleash innovation and investment in technologies that reduce greenhouse gas emissions. It will also encourage climate-friendly consumer behavior while helping families cope with the cost of the transition.

  1. “The Basics of Carbon Fee and Dividend.” Citizens’ Climate Lobby (2018).
  2. “Financial Impact on Households of Carbon Fee and Dividend.” Citizens’ Climate Lobby (Feb 2016).