Source Document: Proposed Fee & Dividend Bill

Note: This is the US version of the proposal and can be used as a basis of understanding the simple nature of the proposal. More to come on this as it develops, but the basic proposal is the foundation.

We propose the People’s Climate Stewardship Act:

  1. Collection of Carbon Fees/Carbon Fee Trust Fund: Beginning on July 1, 2011, a carbon fee of $15 per ton of CO2 equivalent emissions will be imposed on all fossil fuels at the point of first sale in the U.S. economy.    CO2 equivalent fees shall also be imposed for other greenhouse gases including methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons (HFCs) emitted as byproducts, perfluorocarbons, and nitrogen trifluoride. All fees are to be returned to American households as outlined below.
  2. Steady step-up of CO2 Fees, Ensuring Replacement of Fossil Fuels with Low-Carbon Energy: The yearly increase in carbon fees including other greenhouse gasses shall be at least $10 per ton of CO2 equivalent each year, to steadily reduce U.S. CO2-equivalent emissions by 2050 to 10% of the 1990 U.S. CO2-equivalent emissions. EPA and DOE shall annually review greenhouse gas emissions data and determine whether an increase larger than $10 per ton per year is needed to achieve emissions reductions commensurate with that reduction trajectory. If EPA and DOE find that U.S. emissions are not being reduced sufficiently, the CO2 fee shall increase by $15/T CO2 in the following year.    [Modeled after Rep. Larson’s H.R. 1337 “America’s Energy Security Trust Fund Act.”]
  3. Mechanisms for 100% Revenue Return: All revenue from CO2 and CO2 equivalent fees shall be returned to households.    Mechanisms include: (1) Equal monthly per-person “dividend” payments made to all U.S. households (1/2 per child under 18 years old, with a limit of 2 children per family) each month beginning on August 28, 2011, (2) Use all carbon fee revenue to reduce payroll taxes for employers and employees. Unemployed persons and Social Security recipients shall receive equivalent distributions.
  4. Border Adjustments: To ensure that U.S.-made goods remain competitive abroad and to provide an additional incentive for U.S. trading partners to adopt their own carbon fees, Carbon- Fee-Equivalent Tariffs shall be charged for goods entering the U.S. from countries without comparable Carbon Fees. Carbon-Fee-Equivalent rebates shall reduce the price of exports to such countries and ensure that U.S. goods remain competitive in those countries.
  5. Phase Out of Fossil Fuel Subsidies : All existing subsidies of fossil fuels including tax credits, shall be phased out within 5 years.
  6. Moratorium on New or Expanded Coal-Fired Power Plants without CCS: No new coal-fired power plants shall be permitted, constructed, or operated. No expansions in capacity of any existing coal power plants shall be permitted, constructed, or operated. [Exception: Permits may be issued for facilities that successfully demonstrate safe and effective long-term Carbon Capture and Sequestration of at least 90% of CO2 emissions.]
  7. Seeking Treaties: Presidents and Prime Ministers shall seek treaties with other countries that encourage adoption of similar programs to reduce CO2 and other greenhouse gas emissions worldwide.

Proposed by Dr James Hansen: Earth Day, April 25, 2010.

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