Low-Income Households Laser Talk

Question: What will a carbon fee policy mean for low-income households?

Answer: Under the Energy Innovation and Carbon Dividend Act, [1] a majority of U.S. households will end up with more money in their pockets, and low-income households typically benefit the most. [2,3,4]

Why is this? The reason is simple: low-income households typically have lower carbon footprints.   Americans in the wealthiest 20 percent of the population spends 3.6 times as many dollars on fossil energy as the least wealthy 20 percent, and thus would generate 3.6 times as many carbon fee dollars per person. [5] With that money then distributed back to households as carbon dividends, equally without regard to wealth or energy use, low-income Americans will come out ahead 90 percent of the time, simply because they consume far less energy than the wealthy. [4]

Moreover, the 2014 analysis by REMI revealed that a carbon fee and dividend policy like H.R.763 would also increase jobs, and the strongest job creation would be in occupations typically filled by low- to middle-income workers. [6]

The Energy Innovation and Carbon Dividend Act will leave low-income households better off financially and more likely to have a job, and it will do this without any costly and complicated means-testing, income group targeting, or income-based subsidization.

Related: Household Impact Study.

This page was last updated on 01/27/19 at 21:12 CST.