What is Fee and Dividend?

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Fee and Dividend

(aka Direct Tax or Direct Carbon Tax)

While technically it is a Fee because it is designed to pass through back to the consumer it has also been called the direct tax. Direct tax is still a good way to describe it because it communicates in a simple direct fashion. The less obscurity the better. We need a price on carbon and the methods used such as direct tax or fee are the simplest form.
The Carbon ‘Fee and Dividend’ presented by Dr. James Hansen has the best potential to initiate cause and effect that will protect the economy while lowering Co2 emissions. Fee and dividend is, by all reasoned accounts, the most simple method possible to reduce Co2 emissions, move us toward renewable sustainable energy and maintaining a functioning economy.

What is Fee and Dividend – A Short Summary

  1. A fee is charged at the point of origin or point of import on greenhouse gas emitting energy (oil, gas and coal).
  2. The fee is progressive (increases gradually) over time.
  3. The fee is returned to the public.

 

By assuring all of the fees are returned to the public, we don’t have the problem of special interests arguing about who gets the money. It ALL goes back to the public directly. The more people that sign the petition, the better the chances that it is properly done. Tell your friends, sign the petition.

Carbon ‘Fee and Dividend’

by Dr. James Hansen

1. Fee Large & Growing (but get it in place!)

  • tap efficiency potential & life style choices

2. Entire Fee Returned

  • equal monthly deposits in bank accounts

3. Limited Government Role

  • keep hands off money!
  • eliminate fossil subsidies
  • support technology development (no Manhattan projects!)
  • change profit rules and motivation for utilities
  • watch U.S. modernize & emissions fall!

A “carbon fee with 100 percent dividend” is required for reversing the growth of atmospheric CO2. The fee, applied to oil, gas and coal at the mine or port of entry, is the fairest and most effective way to reduce emissions and transition to the post fossil fuel era. It would assure that unconventional fossil fuels, such as tar shale and tar sands, stay in the ground, unless an economic method of capturing the CO2 is developed.

The entire fee should be returned to the public, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts. No bureaucracy is needed.

Fee and Dividend (returns fee to the public)

The public can understand this and will accept a fee if it is clearly explained and if 100 percent of the money is returned to the public. Not one dime should go to Washington for politicians to pick winners. No lobbyists need be employed.

The public will take steps to reduce their emissions because they will continually be reminded of the matter by the monthly dividend and by rising fossil fuel costs. It must be clearly explained to the public that the fee rate will continue to increase in the future.

When fuel prices decline, the fee should increase, to retain the incentive for transitioning to the post-fossil-fuel-era. The effect of reduced fossil fuel demand will be lower fossil fuel prices, making the fee a larger and larger portion of energy costs (for fossil fuels only). Thus the country will stop hemorrhaging its wealth to oil-producing states.

Fee and dividend is progressive.

A person with several large cars and a large house will have a fee greatly exceeding the dividend. A family reducing its carbon footprint to less than average will make money. Everyone will have an incentive to reduce their carbon footprint. The dividend will stimulate the economy, spur innovation, and provide money that allows people to purchase low carbon products.

A carbon fee is honest, clear and effective.

It will increase energy prices, but low and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead. The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon fee rate increases. Effects will permeate society. Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa, encouraging support of nearby farms as opposed to imports from half way around the world.

Beware of alternative approaches, such as ‘percent emission reduction goals’ and ‘cap and trade’.

These are subterfuges designed to allow business-as-usual to continue, under a pretense of action, a greenwashing. Hordes of lobbyists will argue for these approaches, which assure their continued employment. The ineffectiveness of ‘goals’ and ‘caps’ is made blatantly obvious by the fact that the countries promoting them are planning to build more coal-fired power plants.

If the United States accedes to the ineffectual ‘goals’ and ‘caps’ approach, in effect continuation of the Kyoto Protocol approach, it will practically guarantee disastrous climate change. Instead it should persuasively argue that other countries also adopt fee and dividend.

The countries agreeing to this approach will also agree that imports from a country that does not apply a comparable carbon fee will have a fee applied at the port of entry. That fee, which should be added to the public’s dividend, will be a strong incentive for all countries to participate.

A carbon fee is necessary but not sufficient.

By itself a carbon fee cannot solve the energy problem and allow rapid coal phase-out. There also must be better efficiency standards in building codes, for vehicles, and in appliances and electronics. Profit incentives for utilities must be changed, so as to encourage efficiency as opposed to selling as much 6 energy as possible. These are only examples of the many things to be done. But all of these things will be done easier and more effectively in the presence of a carbon fee.

Indeed, a carbon fee is essential.

It is the tool that will impact people’s decisions and lifestyle choices for the short-term, middle-term and long-term, allowing the world to move as gracefully as possible to the post-fossil-fuel-era. In this way we will leave in the ground the hardest to extract fossil fuels as we move rapidly to clean energy sources of the future.