Carbon Dividend Bill Introduced in Congress
Washington, D.C. – A bipartisan bill was introduced in the U. S. House of Representatives today for the Energy Innovation and Carbon Dividend Act of 2018, which is expected to reduce carbon emissions in the United States by 33% within ten years.
The bill is sponsored by Reps. Ted Deutch (D-FL-22), Francis Rooney (R-FL-19), Brian Fitzpatrick (R-PA-08), Charlie Crist (D-FL-13), John Delaney (D-MD-06).
The Energy Innovation and Carbon Dividend Act of 2018 incorporates the provisions of carbon fee and dividend: a fee on carbon emissions at the source that starts at $15 per ton and goes up $10 per year, and a dividend allocated to households.
the dividend generated can be $3456 annually per household and that most people will receive more in dividends than they would spend in increased prices
The Energy Innovation and Carbon Dividend Act of 2018 is Not a Tax
According to the bill, ‘‘The revenues collected under this chapter may be used to supplement appropriations made available in fiscal years 2018 and thereafter— ‘‘(1) to U.S. Customs and Border Protection, in such amounts as are necessary to administer the carbon border fee adjustment, then ‘‘(2) to the Department of Treasury, in such amounts as are necessary to allow refunds under section 9908(e) to exporters of carbon-intensive products and exporters of covered fuels.’’
A tax is a levy collected for general government services for Congress to spend as it decides. A fee is levy collected to provide a service that benefits the group of people from which the money is collected. In this case, the fee will go toward administration of enforcement of the fee, with the rest going to a dividends paid to U.S. households.
The bill will direct the U.S. Treasury to create a ‘Carbon Dividend Trust Fund’ and to distribute those funds directly to American households with 1 share per adult, and half a share per child, for up to two children in the household. In addition, the funds received will not be taken into account for determining eligibility for government benefits or assistance.
According to the CCL website, “the carbon dividend puts money directly into people’s pockets every month to spend as they see fit, helping low and middle income Americans.”
The Energy Innovation and Carbon Dividend Act of 2018 is not ‘Cap & Trade’
Cap and trade policies create “emission allowances” which cap the amount of carbon allowed to be produced by fossil fuel energy producers. Those allowances can be traded on auction, allowing larger polluters to have more allowances to continue polluting. There is no incentive built into cap and trade to reduce carbon emissions beyond what is permitted within the cap. Cap and trade policies have been largely opposed, especially because the cost incurred to get the allowances is passed onto the consumer, creating an additional burden on low-income families.
There is growing support for ‘Fee and Dividend’ measures to reduce carbon emissions, which is different than ‘cap and trade’ policies.
In addition, unlike the Energy Innovation and Carbon Dividend Act of 2018, cap and trade does not address emissions that are generated offshore for goods we consume. This policy puts a fee on fossil fuels like coal, oil, and gas, plus a carbon border fee which will be assessed on imported goods based on the carbon emissions generated in production. After a regulated small amount of the fee is used for enforcement and administration, the money collected from the carbon fee is allocated in shares every month to American households.
The Citizen’s Climate Lobby estimates that the dividend generated can be $3456 annually per household and that most people will receive more in dividends than they would spend in increased prices for fuel and imported goods, creating 2.1 million jobs over ten years, while encouraging industries to pollute less.
According to Bloomberg Environment, the bill is unlikely to pass during this lame duck session before the Democrats take the majority of the House. Supporters of the bill, hope that the introduction of the bill will open up more discussion and generate more support for a fee and dividend proposal in the future.
Related: Climate Change
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