By Sydney Hintz
Photo courtesy of Sydney Hintz & the CFD Movement
Air quality is decreasing, greenhouse gas emissions are growing, and pesticides are poisoning the land. A political gridlock is halting climate solutions with the bills being proclaimed either too drastic or too mundane. The current policies set in place have the Earth’s temperature increasing by a projected 3.3 C (6.0 F) by 2100, far beyond the once-seen as too lax 1.5 C Paris Climate Accord agreement goal. With all of this going on, climate despair and feelings of hopelessness are unavoidable at times. In a world with so much that seems to be going wrong, our efforts can feel insignificant. There are, however, many actions we can take to make a positive impact on the environment to protect it for future generations. Political activism and large, collective action can make a positive difference in environmentalism.
By expressing a consensus in climate action, a real difference can be made and legislation that protects the environment can be passed; there is hope. But where do we start?
Labeled the most effective climate policy, a carbon fee and dividend (CFD) is the best way to combat climate change. The carbon fee and dividend is the largest public statement of economists in history with the support of 3,640 US Economists, including 4 former chairs of the federal reserve, 28 Nobel Laureate economists, and 15 former chairs of the council of economic advisers. A CFD places a fee on the fossil fuels emitted by companies according to the quantity they emit, charging a steady rate for every 1 metric ton of carbon dioxide emitted. The longer that a CFD is in place, the more the unit price of carbon dioxide emitted will rise. By charging companies for the amount of emissions they produce, negative externalities (factors that influence wellbeing that aren’t taken into account in the market) will be internalized.
In essence, the environmental cost of fossil fuel emissions will be monetized, thus incentivizing companies to reduce their emissions to reduce their total costs. The slowly rising fee will compel companies to invest in green technology sooner rather than later and expedite the transition from fossil fuels to sustainable energy sources. The dividend portion of the carbon fee and dividend refers to what is done with the corporate fees collected. The fees are then redistributed to households as monthly dividends, which offsets any increase in prices that may be caused by the higher production costs of corporations that haven’t shifted towards more sustainable practices yet. This prevents corporations from passing the tax down to the consumer and gives the consumer options in what they can purchase. Sustainable corporations will be more competitive since they don’t have to pay a heavy carbon fee, making their prices relatively cheaper and increasing their sales. This promotes competition in the market and leads to companies investing more into green practices to reduce their production costs. As more capital is invested into green technologies, they become more efficient and cheaper. A CFD would cause a decrease in fossil fuel emissions, an increase in green technologies and the growth of a more competitive market.
A CFD would prevent an estimated 230,000+ premature deaths from poor air quality and reduce carbon emissions to 52% below 1990 levels in the next 20 years in the US. In addition to the environmental and health benefits, a CFD would create approximately 2.8 million jobs because of the energy dividend’s economic stimulus. The simple yet ingenious methodology behind the CFD makes it easy to monitor and evaluate, which poses less long-term risk. MIT’s En-Roads Climate Solution Simulation shows carbon pricing to be the stand-out initiative that will make the difference in our ability to combat climate change, decreasing our increase in global temperature by 0.8 C, or 1.6 F. The CFD has bi-partisan support from powerful figures and organizations ranging from Fridays for the Future, to Mitt Romney, to Pope Francis. Iterations of carbon pricing are already being implemented across the globe with Canada, the EU, Korea, South Africa, and countless other countries all having some version of national carbon pricing policies. Thankfully, the US might be joining that list.
The Energy Innovation Act is likely to be reintroduced into the House of Representatives, and it includes a carbon fee and dividend and a border carbon adjustment. This legislation is the major step we need for the US’ goal to reach Net-Zero by 2050; it will be practically impossible to achieve without it. The border carbon adjustment will protect domestic manufacturing and jobs by making all imported goods pay a small fee to account for their carbon emissions. In addition, goods that are exported from the US will receive a refund to protect domestic economic growth on the international scale. The Energy Innovation Act is the only piece of legislation being introduced into the legislative branch that includes a carbon fee and dividend this session, and it is imperative that we act now to get it passed.
There are countless actions that you can take to make a difference in getting a carbon fee and dividend passed in the United States ranging from writing congress to put a price on carbon, to emailing your representatives to co-sponsor the Energy Innovation Act, to joining the Carbon Fee and Dividend Movement and attending its meetings. By spreading the word about this impactful legislation, tangible change can be made in getting a carbon fee and dividend passed. So, I ask you, will you help us in making this a carbon emission f(r)ee world?
Seaside Sustainability supports the Carbon Fee and Dividend Movement.
Learn more here.
References:
Carbon Fee and Dividend Movement | Citizens’ Climate Lobby. (n.d.). CFD Movement. https://www.cfdmovement.com/
Citizens’ Climate Lobby. (2023a, May 1). What is a Price On Carbon? (Video) | Citizens’ Climate Lobby. https://citizensclimatelobby.org/price-on-carbon/
Citizens’ Climate Lobby. (2023b, May 18). The Basics of Carbon Fee and Dividend | Citizens’ Climate Lobby. https://citizensclimatelobby.org/basics-carbon-fee-dividend/
En-ROADS Climate Scenario. (n.d.). https://en-roads.climateinteractive.org/scenario.html?v=23.6.1&p1=2&p7=1&p39=0&p47=1.3&p57=0.1
LehmannClimateWire, E. (2015, December 2). Obama Calls Carbon Price Better Than Regulations. Scientific American. https://www.scientificamerican.com/article/obama-calls-carbon-price-better-than-regulations/