Carbon Fee & Dividend

Money in your pocket & net zero by 2050

Carbon pollution is what economists call a negative externality, or market failure. Currently, there is no cost to companies for shooting pollutants into the air we breathe, even though these pollutants are associated with lung cancer, heart disease, and of course, climate change.

A carbon fee & dividend corrects for this market failure by charging a fee for every ton of CO2 emitted into the air. The fee would be assessed at the source of extraction (meaning at the mine, well, or pump) of carbon-emitting energy. It would begin at around $10/ton of CO2, and then grow incrementally year after year until we've phased out carbon-emitting fuel sources. This gives current companies time to react and innovate, rather than mandating an economy-wide halt and thrusting America back into the dark ages. 

Of course, this plan begs the question, won't everything get more expensive, making life harder for already struggling citizens? 

That's where the dividend comes into play. Rather than give the money collected from the carbon fee to the government (which would grow the government's size), the money would be distributed to every tax-paying household in the form of a monthly dividend check. We saw the same thing happen with our stimulus checks during the COVID-19 pandemic. 

It is projected that with this model, the poorer 50% of America would actually come out ahead of where they were before the carbon tax, since they're lower carbon emitters. This makes it easier for Americans to switch to renewables as the technology becomes cheaper and more widely available. 

This plan is endorsed by over 3500 American economists and every living ex Federal Reserve Chair. Unlike subsidies and other regulations, this policy does not pick winners and losers. Whatever energy can be most cheaply distributed with the carbon fee will win America's consumers, whether that be nuclear, wind, solar, or some energy source we haven't even come up with yet.