Low-Income Households Laser Talk

This page was updated on 05/31/18 21:57.

Question: How will Carbon Fee and Dividend affect low-income households?

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

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. [4] With that money then distributed back to all households as carbon dividends, equally without regard to wealth or energy use, low-income Americans, who typically use less energy, will come out ahead 90 percent of the time. [3]

Moreover, the 2014 analysis by REMI revealed that Carbon Fee and Dividend would also increase jobs, and the strongest job creation would be in occupations typically filled by low- to middle-income workers. [5]

Carbon Fee and Dividend leaves low-income households better off financially and more likely to have a job, and it does this without any costly and complicated means-testing, income group targeting, or income-based subsidization.

  1. Williams, R.C., et al. “The Initial Incidence of a Carbon Tax across Income Groups.” Resources for the Future (Aug 2014).
  2. Komanoff, C. “The climate solution that boosts income for over 60% of Americans – the ones who most need it.” Carbon Tax Center (15 Sep 2017).
  3. Ummel, K. “Impact of CCL’s proposed carbon fee and dividend policy: a high-resolution analysis of the financial effect on U.S. households.” Working Paper v1.3 (Feb 2016).
  4. “Ensuring Equity.” Carbon Tax Center (14 Jun 2014).
  5. Nystrom, S. and P. Luckow. “The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax.” Regional Economic Models, Inc. and Synapse, Inc. (9 June 2014).

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Please check this out on https://citizensclimatelobby.org.

Impact on Low-Income Households,
https://citizensclimatelobby.org/laser-talks/low-income-households-and-carbon-fee-and-dividend/

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