The following column is the opinion and analysis of the writer.
Recently the ArizonaDaily Star carried an article quoting U.N. Secretary-General Antonio Guterres warning that climate change could soon pass “the point of no return.” Until very recently, many have seen climate change as a distant threat, something of concern to our grandchildren. Now wildfires sweep through California, more powerful hurricanes lead to massive flooding, and frigid air permeates North America earlier and earlier. Climate change is on our doorstep, but there is hope in proposed legislation.
Economists agree that price increases will reduce the use of carbon-based fuels. But is there a way to do that that would protect people from the economic shock of doing so? In fact, there is.
House Resolution 763, a centrist approach to reining in climate change, relies on a simple economic concept. The most effective way to reduce the use of anything is to make it more expensive. HR763 would place a fee of $15 per ton on the CO2 content of any fossil fuel at its point of extraction — a mine, a well or a port of entry. That fee would increase by $10 per ton per year. Over time the cost of energy derived from fossil fuel would become prohibitively expensive. But the plan contains a second part which would protect citizens from economic shock.
The proceeds from the carbon fee would be rebated to the citizenry in the form of dividends. Detailed economic analysis reveals that the rebated dividend would exceed the increased cost on goods from the carbon fee for nearly 70% of the populace. As the fee rose, so would the dividend allowing increased income to offset the increasing fossil fuel cost while simultaneously allowing time for people to begin to move to less carbon intensive forms of energy. Knowing that the costs of fossil fuel energy will continue to increase, businesses would move toward renewable forms of energy allowing them to simultaneously advertise themselves as responsible stewards of the environment and lowering their costs.
HR763 also contains incentives for other countries to reduce their carbon emissions by assessing an equal fee on imports from countries that don’t have an equivalent or greater fee. Given the size of the U.S. market and the desire to sell into it, other countries would soon adopt the same policy thereby cleaning the air for their citizenry. American business would, thereby, have a level playing field.
HR763 exempts farmers, ranchers and the military from the fee. This would protect agriculture, limit increased household cost for food, and allow military operations necessary to national defense. Since agriculture and defense represent a tiny percentage (less than 3%) of fossil fuel use, their impact on carbon emissions is relatively insignificant.
These three planks — increasing the cost of fossil fuels, rebating the proceeds from those costs to the public, and protecting American business from unfair competition have multiple positive effects. A Citizens Climate Lobby-funded study done by Regional Economic Modeling Incorporated shows those effects.
In 10 years, greenhouse gases would be dramatically reduced, the household dividend would create 2.8 million new jobs and premature death from air pollution would decline by 230,000 people.
Quite simply, there is no economic argument against HR763. It reduces greenhouse gas emissions, promotes the transition to a healthier environment, creates jobs, grows the economy and protects the most vulnerable from economic shock. The plan has the support of liberal, conservative and libertarian think tanks. What is lacking is political will. Please call, write and demand that your congressional representative take action. Simply ask them to support House Resolution 763.