Chas Macquarie: Answering questions about carbon fee
David Knighton, in his May 1 letter, asks some good questions about the Carbon Fee and Dividend bill that has been introduced in Congress. It’s always a good idea to check out claims made in the media. Here are some answers to his questions.
1. The information about emissions reductions and the economy comes from a 2014 study by Regional Economic Models, Inc. (REMI) and recent updates. Its non-partisan and their expertise is crunching numbers. The full report is here: https://citizensclimatelobby.org/remi-report/ along with national and regional summaries.
2. Carbon emission reduction details are in the report and use data from the U.S. Energy Information Administration; but in brief, as the price for carbon pollution rises people will use less of it and transition to less harmful sources of energy.
3. The health benefits come about because pollution of our air and water will be reduced as fossil fuels are phased out.
4. The dividend part of the policy will return the net revenue generated to the American people in equal shares. Every legal American adult gets one share with children under 19 getting a half share.
5. The biggest employment gains will come in the clean energy, healthcare, retail and other service sectors. There will be a loss of jobs in the coal and oil industries and this needs to be addressed with job training and other job opportunities for those workers. However; overall, there are already far more jobs in the clean energy sector than in the fossil fuel energy sector. Source: Department of Energy 2017 U.S. Energy and Employment Report.
6. More than 32,000 Nevadans across all 17 counties work in clean energy. In 2018 more than 8,000 jobs were added in this sector. https://www.windpowerengineering.com/business-news-projects/clean-energy-employs-five-times-more-nevadans-than-fossil-fuels/
7. Revenue Neutral: The Energy Innovation and Carbon Dividend Act of 2019 requires the fees collected be deposited into a Carbon Dividend Trust Fund in the U.S. Treasury and the dividend paid out of the same fund. Once the program is up and running, administrative expenses are limited to 2 percent of the money collected.
8. As of January 2018, 42 national and 25 sub-national governments have instituted some form of carbon pricing. Source: World Bank, Ecofys and Vivid Economics. State and Trends of Carbon Pricing 2017. Publ. World Bank, Washington, DC. (2017). Canada recently implemented a Carbon Fee and Dividend law and British Columbia has had a carbon tax for the past decade. BC’s fuel consumption has declined and GDP has increased faster than the rest of Canada.
9. In January 2019, 4 former chairs of the Federal Reserve, 27 Nobel Laureate Economists, and 15 former chairs of the Council of Economic Advisers issued a joint statement in the Wall Street Journal laying out the economic case for Carbon Fee and Dividend legislation. https://www.wsj.com/articles/economists-statement-on-carbon-dividends-11547682910.