What are Laser Talks?

Just as a laser is powerful and focused, a Laser Talk is a brief but powerful statement on a specific topic. Reading our Laser Talks is a great way to get informed about CCL, climate policy, and related scientific, economic, and political issues.

The principal audience for our Laser Talks are volunteers who meet with legislators and their aides, but we also expect them to be educational for other stakeholders and the general public. Laser Talks are not meant to be memorized, but to provide understanding that will help you respond, in your own words, to questions you may be asked.

The laser talks are listed below under six categories: Climate Science, Impacts, Policy Design, Technology, Politics, and International.

Note: talks have not been updated since the most recent date posted at the bottom of each section. 

Laser Talks Directory

Climate Science Topics

Laser talks in this section cover the science of global warming and its effects on our climate.

Impacts Topics

Laser talks in this section cover the impacts of climate policy.

Policy Design Topics

Laser talks in this section cover details of the Energy Innovation and Carbon Dividend Act and other climate-related policies.

Technology Topics

Laser talks in this section cover energy technologies from a climate perspective.

Politics Topics

Laser talks in this section cover the political challenges we need to understand to succeed.

International Topics

Laser talks in this section cover international climate policy, carbon pricing, and border issues.

Laser Talks

Climate Science

Question:  What’s the actual science behind global warming?

Answer: The sun heats the earth, which then radiates part of that heat back into space as infrared radiation. Certain gases – ‘greenhouse gases’ – interact with this outgoing heat radiation, keeping the surface temperature higher than it would be without them. Although water vapor has the greatest effect, carbon dioxide, CO2, plays a pivotal role. If there was no CO2 in the atmosphere, most or all of the earth’s surface would be frozen,[1] but just a tiny amount keeps it warm enough to support life as we know it.

For about 10,000 years, atmospheric CO2 levels have been quite steady, giving us a stable climate in which to live and grow. But as we learned new ways to extract energy from coal, oil, and gas, we proceeded to burn them faster and faster, converting ‘fossil’ carbon that’s been buried for millions of years into CO2, exceeding the natural level we had for millennia.

Scientists have understood the greenhouse effect since the 1850’s, [2,3] but it wasn’t until 1958 that we began regularly measuring and tracking atmospheric CO2. [4] Just since that time, it’s climbed by more than 30 percent, [5] about 100 times faster than any natural cycle can explain. [6]

Not only is this raising the global temperature, but a sizeable fraction of the CO2 we produce is going into the oceans, causing the water to become more acidic. That’s detrimental to important marine life. [7]

Human activity, mostly fossil fuel burning, currently adds over a thousand tons of CO2 per second to the atmosphere and the oceans. [8] Natural cycles, volcanoes, and the sun have all been ruled out as the cause of the current heat buildup. [9] They are either too small, too slow, or going in the opposite direction. It’s us.

In a Nutshell: Global temperatures are now rising at an accelerating rate, which began in the 1800s. This is entirely due to greenhouse gas buildup from human activity, mainly the burning of fossil fuels.

  1. Voigt, A. and J. Marotzke. “The transition from the present-day climate to a modern Snowball Earth.” Climate Dynamics 35, 887-905 (9 Jul 2009).
  2. “The Discovery of Global Warming.” American Institute of Physics (Feb 2018).
  3. “Meet the woman who first identified the greenhouse effect.” Climate Home News (9 Feb 2016).
  4. Harris, D.C. “Charles David Keeling and the Story of Atmospheric CO2 Measurements.” Analytical Chemistry 82 7865-7870 (1 Oct 2010).
  5. Specifically, from 315 to 420 parts per million (ppm). “The Keeling Curve.” Scripps Institute of Oceanography (accessed 23 May 2022).
  6. Lindsey, R. “Climate Change: Atmospheric Carbon Dioxide.” NOAA Climate.Gov (19 Sep 2019).
  7. “Ocean Acidification.” NOAA Fisheries (28 Jun 2017).
  8. Ritchie, H. and M. Roser. “CO2 and Other Greenhouse Gas Emissions.” Our World in Data online (2018).
  9. Roston, E. and B. Migliozzi. “What’s Really Warming the World?” Bloomberg Business Week (24 Jun 2015).

This talk was last updated on 05/23/22  at 21:26 CDT.

Question:  Don’t scientists still disagree about whether climate change is human-caused?

Answer:  No. There are only a very few, and even fewer with scientific backgrounds relevant to climate science. Many individuals who pose as “experts” in media sources are not scientists at all, or else have no real background in climate science.

You want proof? Eight different research groups looked into this over the last 10 years, examining thousands of papers and/or asking hundreds of scientists directly for their position on climate change. Each new study finds less and less disagreement. As of 2016, the average level of agreement was 97 percent,  [1] but if that wasn’t clear enough, an October 2021 paper now finds that 99.9 percent of published scientists agree that human-caused global warming is real. [2]  Not only that, but the National Academy of Sciences and their counterparts from 79 other nations also agree, as do all major American member organizations of physicists, chemists, meteorologists, and astronomers. Not a single one claims that human-influenced global warming is in doubt. Not one. [3]

This is important, because when people learn how strong the scientific agreement really is, they are more inclined to transcend political affiliations and support public policy solutions to climate change. [4]

In a Nutshell:  Nearly 100 percent of climate scientists are now convinced, based on the evidence, that human-caused global warming is happening. What little doubt may have once existed has been eliminated.

Click here for supporting graphics.

  1. “Scientific consensus: Earth’s climate is warming.” NASA Global Climate Change. (accessed 25 Jan 2018).
  2. Lynas, M., B.Z. Houlton, and S. Perry. “Greater than 99% consensus on human caused climate change in the peer-reviewed scientific literature.” Environmental Research Letters 16:11 (19 Oct 2021).
  3. “List of Worldwide Scientific Organizations.” Governor’s Office of Planning and Research, State of California. (accessed 25 Jan 2018).
  4. Van der Linden, S.L., A.A. Leiserowitz, G.D. Feinberg, and E.W. Maibach. “The Scientific Consensus on Climate Change as a Gateway Belief: Experimental Evidence.” PLOS One (25 Feb 2015).

This talk was last updated on 10/22/21.

Question:  What’s the connection between global warming and extreme weather?

Answer:  Rising greenhouse gases interfere with the radiant cooling of the earth, causing excess heat energy to build up in the atmosphere and the oceans. All weather is driven by energy. With more energy building up in the system, the normal ups and downs of weather become supercharged with more heat and moisture. [1]

That leads to more extreme weather. While the precise timing and location cannot be predicted far in advance, hurricanes, droughts, heat waves, massive downpours, and even extreme snowfall in some areas are becoming more frequent and more severe. [2,3] Adding to this disruption is the loss of Arctic sea ice and ice sheets, which may be changing the large-scale patterns of jet streams that govern weather all over the globe. [4,5] These Arctic changes may also change ocean currents that in turn affect our weather. [6]

Climate-induced supercharging of weather is not just an academic topic, but one that impacts our economy. Since1980, extreme weather events have cost the U.S. a jaw-dropping $1.88 trillion, with a third of that cost in just the last five years. [7] Climate change is known to contribute to that cost. [8,9] The size of that contribution is still far from being pinned down, but judging from discussions inside the insurance industry, [10] it’s safe to say it’s far above zero.

In a Nutshell: Global warming builds up heat energy in the atmosphere and the oceans, disrupting every kind of weather and costing our economy hundreds of billions. 

  1. Pappas, S. “What is Global Warming?” LiveScience (10 Aug 2017).
  2. “Extreme Weather.” National Climate Assessment, U.S. Global Change Research Program (Oct 2014).
  3. “Climate Change and Extreme Snow in the U.S.” NOAA (accessed 90 Apr 2018).
  4. Serreze, M.C. “Comment: Arctic warming and midlatitude weather: Is there a connection?.” Earth: the Science Behind the Headlines (4 Dec 2017).
  5. Trouet, V. et al. “Recent enhanced high-summer North Atlantic Jet variability emerges from three-century context.” Nature Communications 9:180 (12 Jan 2018).
  6. Cho, R. “Could Climate Change Shut Down the Gulf Stream?” State of the Planet, Columbia University Earth Institute (6 Jun 2017).
  7. Smith, A.B. “2020 U.S. billion-dollar weather and climate disasters in historical context.” NOAA Climate.gov (8 Jan 2021).
  8. Leahy, S. “Hidden Costs of Climate Change Running Hundreds of Billions a Year.” National Geographic (27 Sep 2017).
  9. “Calculating the Cost of Weather and Climate Disasters.” NOAA National Centers for Environmental Information (29 Oct 2021).
  10. Hulac, B. “Climate Change Goes Firmly in the ‘Loss’ Column for Insurers.” Scientific American (15 Mar 2018).

This talk was last updated on 12/27/21.

Question:  What’s the connection between hurricanes and climate change?

Answer: Hurricanes occur with or without global warming, but global warming has a strong effect on how they behave.

The energy that feeds hurricanes – the name we give tropical cyclones in the North Atlantic – comes from the warmth of ocean water. The oceans absorb over 90% of the excess heat trapped in the atmosphere from rising greenhouse gases [1], so warmer water pumps more energy and moisture into storms once they have formed. This leads to more powerful winds, more rain, and faster intensification. Additionally, global warming affects the size of a hurricane – the area it covers – based on how deep into the water the excess warmth penetrates [2]. Global warming increases ocean warming not only on the surface, but increasingly farther below it. [3]

Global warming affects another phenomenon called wind shear that could produce fewer Atlantic storms in a given year, [4] but those that persist will become larger, more intense, and longer-lasting than they would otherwise have been. [1] Another wild card is the effect of polar warming on the jet streams, which can alter the path of hurricanes. [5] And finally, sea-level rise increases the risk of storm surge and flooding in vulnerable coastal areas exposed to these more powerful hurricanes. [6]

The bottom line is that global warming may result in fewer Atlantic hurricanes but those that form are expected to be larger, wetter, faster-growing, and longer-lived, making them more destructive when they make landfall.

In a Nutshell: Global warming feeds more energy to hurricanes when they occur, making them larger, wetter, faster-growing, longer-lived, and thus more destructive.

  1. ”Climate Change Indicators: Ocean Heat.” U.S. Environmental Protection Agency (Apr 2021).
  2. Le Page, M. “Hurricane Irma’s Epic Size is Being Fuelled by Global Warming.” New Scientist (6 Sep 2017).
  3. Dahlmann, L. “Climate Change: Ocean Heat Content.” NOAA Climate.gov (14 Jul 2015).
  4. Pritchard, M. “Behind the 2015 Atlantic Hurricane Season: Wind Shear & Tropical Cyclones.” NOAA Atlantic Oceanographic and Meteorological Laboratory (9 Aug 2015).
  5. Francis, J. “Guest post: How Arctic warming could have steered Hurricane Florence towards the US.” Carbon Brief (17 Sep 2018).
  6. “Storm Surge.” NOAA U.S. Climate Resilience Tool Kit (6 Oct 2017).

This talk was last updated on 12/17/21.

Question: How are wildfires connected to climate change?

Answer:  Wildfires, while not strictly ‘weather’ events themselves, are certainly affected by weather. Climate change alone cannot cause a wildfire but can increase the likelihood that one will start and, that if it does, it will be more intense, more widespread and longer-burning. [1]

Global warming magnifies the threat of wildfires in two ways. First, snow melts earlier in the spring but then starts to fall later in the autumn. This extends the dry season, allowing forests to dry out sooner and for a longer time. Second, global warming increases the frequency and duration of heat waves that intensify and expand dry conditions, turning green vegetation into easily ignited tinder. [2,3,4,5] A July 2019 paper stated that “warming‐driven fuel drying is the clearest link between anthropogenic climate change and increased California wildfire activity to date.” [6]

Over the last four decades, the number of wildfires in the U.S. has not changed much, but the acreage burned from those fires has more than doubled, and the cost, just since 2004, has exploded by a factor of 35. [7] This has occurred despite better forest management and fire suppression policies that should decrease the acreage burned. The fact that the opposite is true strongly suggests that the impact of climate change is outrunning efforts to mitigate the damage, rising costs, and danger to life that we are bearing from wildfires.

So, what’s the bottom line? There is strong evidence that destruction from wildfires across the U.S. has increased massively over the last 40 years, a trend that is consistent with a longer fire season exacerbated by higher seasonal temperatures due to global warming. The impact of climate change on wildfires is costing us tens of billions.

In a Nutshell: Global warming is drying out forests and grasslands, extending fire seasons and overwhelming the ability of states and countries to contend with wildfires. This is already costing us tens of billions of dollars just in the U.S.

  1. “Is Global Warming Fueling Increased Wildfire Risks?” Union of Concerned Scientists (Accessed 1 Oct 2017).
  2. Buis, A. “The Climate Connections of a Record Fire Year in the U.S. West.” Ask NASA Climate (22 Feb 2021).
  3. “Wildfires and Climate Change.” Center for Climate and Energy Solutions (Accessed 1 Oct 2017).
  4. Ma, M. “New report: State of the science on western wildfires, forests and climate change.” University of Washington, UW News (02 Aug 2021).
  5. Abatzoglou, J.T. and A.P. Williams. “Impact of anthropogenic climate change on wildfire across western US forests.” Natl. Acad. Sci. 113:42, 11770-11775 (18 Oct 2016).
  6. Williams, A.P., et al. “Observed impacts of anthropogenic climate change on wildfire in California.” AGU100, American Geophysical Union (15 July 2019).
  7. “Facts + Statistics: Wildfires.” Insurance Information Institute (accessed 22 Oct 2021).

This talk was last updated on 10/23/21.

Impacts

Question:  Won’t a carbon fee be bad for the economy?

Answer:  A properly designed carbon policy will be good for the economy. Carbon fee and dividend legislation [1] will have a positive impact on our well-being, especially if we consider the avoided costs of climate change and the health benefits from reduced air pollution.

As far back as 2009, 98 percent of economists said a price on carbon would promote efficiency and innovation, [2] and 10 years later, support for a carbon fee and dividend was declared by 46 of the world’s premier economists. [3] A 2013 review by Resources for The Future [4] held that the impact of various carbon tax plans on GDP would be ‘trivially small,’ and a 2020 analysis of carbon pricing in the EU [5] found that it slightly increased both GDP and job growth.

Neither of those studies accounted for how much money we will save by avoiding fossil fuel damages. [6 ,7] According to an ongoing government review (as of Dec 2021), every metric ton of carbon dioxide (CO2) emitted now will cost tomorrow’s economy from $14 to $156, and that cost could nearly double for CO2 emitted in 2050. [8] We Americans currently emit over 160 metric tons of CO2 per second. [9]

If we include the health costs of fossil fuel air pollution, which have been estimated at $188 billion annually, [10] it’s clear that burning fossil fuels is already costing our economy upwards of $250 billion a year. This was confirmed by the Fourth National Climate Assessment [11] issued in November 2018.

When someone claims a price on carbon will depress the economy, they fail to consider how recycling the money back to U.S. households changes the results, and also fail to account for the huge costs of doing nothing.

In a Nutshell: Regardless of what opponents of carbon pricing might say, evidence shows that a carbon fee that sends carbon cash-back payments to households will actually improve the economy and create jobs. Savings in public health alone will be far more than the costs of the policy. 

  1. “H.R.2307 - Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  2. Holladay, J.S., J. Horne, and J. Schwartz. “Economists and Climate Change: Consensus and Open Questions.” Policy Brief No. 5. New York University School of Law (Nov 2009).
  3. Akerlof, G., et al. “Economists’ Statement on Carbon Dividends.” econstatement.org (17 Jan 2019).
  4. Kopp, R.J. “Economic Growth and Carbon Taxes.” Resources for the Future (13 Sep 2013).
  5. Metcalf, G.E. and J.H. Stock. “The Macroeconomic Impact of Europe’s Carbon Taxes.” Working Paper 27488, National Bureau of Economic Research (Jul 2020).
  6. “Billion-Dollar Weather and Climate Disasters: Summary Stats.” NOAA National Centers for Environmental Information (2018).
  7. Cho, R. “Social Cost of Carbon: What Is It, and Why Do We Need to Calculate It?.” Columbia Climate School (1 Apr 2021).
  8. “Technical Support  Document:  Social  Cost  of  Carbon and Nitrous Oxide: Interim Estimates under  Executive  Order  13990.” Interagency Working Group on Social Cost of Greenhouse Gases. (Feb 2021).
  9. “U.S. Energy-Related Carbon Dioxide Emissions, 2016.” U.S. Energy Information Administration (5 Oct 2017).
  10. “The Economic Case for Climate Action in the United States.” Universal Ecological Fund (Sep 2017).
  11. Fourth National Climate Assessment (NCA4), Volume II. U.S. Global Change Research Program (23 Nov 2018).

This talk was last updated on 12/05/21.

Question: How will the Energy Innovation and Carbon Dividend Act affect household energy costs?

Answer:  The carbon fee revenue from fossil fuel corporations will be recycled to American families in such a way that around 61 percent of households and 68 percent of individuals will get back more money in carbon cash back payments than they pay in increased energy costs.

Many people are surprised to learn that more than half of their fossil carbon costs are hidden in purchases like food, clothing, and other products. Nonetheless, families pay more attention to direct energy costs like gasoline and utility bills. With a steadily rising carbon fee, these costs will go up depending on how much fossil carbon is in the fuel, or how much was burned in its production.

Based on government data, [1,2,3] we calculate that a first-year carbon fee of $15 per metric ton of CO2 equivalent will:

  • Raise gasoline by 16¢ per gallon
  • Raise natural gas by 9¢ per therm
  • Raise heating oil by 18¢ per gallon, and
  • Raise electricity by 0.6¢ to 1.4¢ per kilowatt-hour, depending on whether it’s generated by natural gas or coal. Electricity from renewables or nuclear plants will not increase. [4]

The carbon cash back payment is the key to offsetting these cost increases. As reported in the 2020 Household Impact Study, [5] 61 percent of American families will either break even or come out ahead, and a 2017 Treasury Department study of a similar approach [6] reported 70 percent of families come out ahead. It all depends on what kind of energy you use, and how much. [7] Anyone who wants an estimate of how their finances will shake out can find out with our online Personal Carbon Dividend Calculator.

In a Nutshell: The Energy Innovation and Carbon Dividend Act will recycle carbon fee revenue to American consumers in such a way that more than two-thirds will actually get carbon cash back payments that are bigger than their increased energy costs.

  1. “Emissions Factors for Greenhouse Gas Inventories.” U.S. Environmental Protection Agency. 4 April 2014.
  2. Bradbury, J., Z. Clement, and A. Down. “Greenhouse Gas Emissions and Fuel Use Within the Natural Gas Supply Chain: Sankey Diagram Methodology.” Jul 2015.
  3. Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET).
  4. Gasoline is regular 87 octane with 10% corn ethanol. For natural gas, 1 therm = 100,000 Btu. For electricity, 1 kWh = 1 kilowatt-hour. Power plant efficiency = 34.0% for coal, 44.6% for natural gas (NGCC). Pass-through of fee to consumers = 95%.
  5. Ummel, K. “Household Impact Study II (HIS2): The impact of a carbon fee and dividend policy on the finances of U.S. households.” Working Paper v1.1 (Aug 2020).
  6. Horowitz, J., et al. “Methodology for Analyzing a Carbon Tax.” Office of Tax Analysis Working Paper 115 (Jan 2017).
  7. “Financial Impact on Households of Carbon Fee and Dividend.” Citizens’ Climate Lobby (Aug 2020).

This talk was last updated on 05/01/21.

Question:  Won’t making fossil fuels more expensive kill jobs?

Answer:  Not so. Cutting fossil fuel emissions actually puts more people to work than business as usual at comparable wages. [1] Fossil fuel employment has been shrinking for years, mainly because of mechanization, not regulation. For example, in 1980, producing 100 tons of coal per hour required 52 miners; by 2015 that number dropped to 16. Even though more coal was being mined, coal mining lost 58 percent of its jobs between 1980 and 2015. [2]

In 2018, there were 2.4 million jobs in clean energy and energy efficiency, compared to half that many in fossil energy. [3] Even without a price on carbon, installers and service technicians for solar and wind are forecast to grow 11 to 13 times faster than the U.S. average. [4,5] Also, the vast majority of energy sector jobs, such as electricians, power plant operators, riggers, etc., are needed for both fossil and non-fossil energy. [6]

Our country will still need energy, whether it comes from low- or zero-carbon sources or from the old polluting sources of the past. Today, the energy technologies of the future create more well-paying jobs per energy dollar spent, and will continue to do so even as the new technologies mature. [7] Not only is renewable electricity already cost-competitive with fossil-generated power in many locations, [8,9] it provides 50 percent more jobs, at similar pay, for the same amount of energy. [10,1]

And it’s not just renewable energy jobs! A 2017 study of a carbon tax in British Columbia that reroutes most revenue to taxpayers [11] showed that, over a six-year period, job gains in labor-intensive sectors like health care outweighed job losses in energy-intensive sectors like air travel. There were more employment opportunities with the carbon tax than without it.

In a Nutshell: Clean energy and energy efficiency actually puts more people to work, at comparable wages, than continued fossil fuel extraction. When the carbon fee revenue is used for carbon cash-back payments to households, this also stimulates job growth in businesses outside the energy sector. 

  1. “Occupational Employment Statistics.” U.S. Bureau of Labor Statistics (May 2018). Fossil energy jobs averaged $25/h; wind and solar jobs averaged $24/h; nuclear plant jobs averaged $46/h; jobs that apply to all forms of energy averaged $28/h.
  2. Saha, D. and S. Liu. “Increased automation guarantees a bleak outlook for Trump’s promises to coal miners.” Brookings.edu (25 Jan 2017).
  3. “The 2019 U.S. Energy & Employment Report.” Energy Futures Initiative and National Association of State Energy Officials (2019).
  4. “Occupational Outlook Handbook: Solar Voltaic Installers.” U.S. Bureau of Labor Statistics (19 Sep 2019).
  5. “Occupational Outlook Handbook: Wind Turbine Technicians.” U.S. Bureau of Labor Statistics (19 Sep 2019).
  6. See Reference 1. Data show that 85 percent of energy sector jobs (electricians, power plant operators, riggers, etc.) would remain essential throughout a decarbonization scenario.
  7. Kats, G. “How many jobs does clean energy create?” GreenBiz (5 Dec 2016).
  8. “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2018.” U.S. Energy Information Administration (Mar 2018).
  9. “Levelized Cost of Energy and Levelized Cost of Storage 2018.” Lazard Insights (8 Nov 2018).
  10. Wei, M., S. Patadia, and D.M. Kammen. “Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?” Energy Policy 38, 919-931 (2010).
  11. Yamazaki, Akio. “Jobs and Climate Policy: Evidence from British Columbia’s Revenue-Neutral Carbon Tax.” Environ. Econ. and Manag., 83(C), 197-216 (May 2017).

This talk was last updated on 05/01/21.

Question: How will a carbon fee affect low-income households?

Answer: Under a carbon fee and dividend policy like the Energy Innovation and Carbon Dividend Act, [1] 61 percent of U.S. households will end up with more money in their pockets, and low-income households typically benefit the most. [2,3,4]

Why is this? The reason is simply that low-income households typically have lower carbon footprints. [5] When energy producers, manufacturers, and businesses raise their prices to cover the cost of the carbon tax, those price increases will be spread evenly across their products and services regardless of who buys them. But since Americans in the wealthiest 20 percent of the population spend 2.6 times as much on energy than the bottom 20 percent, pay more to cover those higher costs than they'll receive in cashback payments.  Low-income Americans will come out ahead 96 percent of the time, simply because they consume far less energy than the wealthy. [6]

Renewable energy is also likely to benefit job seekers from underserved communities because it is more labor-intensive than fossil energy [7] and spans may parts of the country where career opportunities are sorely needed. [8] Moreover, a 2014 analysis by REMI revealed that a carbon fee and dividend policy would also increase jobs, including job creation in occupations like retail, hospitality, and health care that could reduce unemployment in low- to middle-income communities. [9]

Carbon fee and dividend will leave low-income households better off financially and more likely to have a job, and can do this without any costly and complicated means testing.

In a Nutshell: Low-income Americans, no matter where they live, have smaller carbon footprints than the wealthy So with a carbon fee that sends the revenue back to households as an equal carbon cash  payment, 96 percent will actually come out ahead and also see expanding job opportunities.

  1. “H.R.2307 - Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  2. Williams, R.C., et al. “The Initial Incidence of a Carbon Tax across Income Groups.” Resources for the Future (Aug 2014).
  3. Komanoff, C. “The climate solution that boosts income for over 60% of Americans – the ones who most need it.” Carbon Tax Center (15 Sep 2017).
  4. Fremstad, A. and M. Paul. “The Impact of a Carbon Tax on Inequality.” Ecological Economics 163, 88-97 (Sep 2019).
  5. Boyce, J.K. “Carbon Pricing: Effectiveness and Equity.” Ecological Economics 150, 52-61  (29 Mar 2018).
  6. Ummel, K. “Household Impact Study II (HIS2): The impact of a carbon fee and dividend policy on the finances of U.S. households.” Working Paper v1.1 (Aug 2020).
  7. Wei, M., S. Patadia, and D.M. Kammen. “Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?” Energy Policy 38, 919-931 (2010).
  8. Tomer, A., J.W. Kane, and C. George. “How renewable energy jobs can uplift fossil fuel communities and remake climate politics.” Brookings Institution (23 Feb 2021).
  9. Nystrom, S. and P. Luckow. “The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax.” Regional Economic Models, Inc. and Synapse, Inc. (9 June 2014).

This talk was last updated on 10/27/21.

Question:  What will happen to emissions under this policy?

Answer:  When CCL decided in 2010 to back the carbon fee and dividend concept, it became imperative to learn how it would affect emissions. Thus in 2014 they commissioned Regional Economic Models Inc. (REMI) to answer that question. The REMI study examined the effects of a carbon fee starting at $10 per metric ton of CO2 and going up $10 a year for 20 years. Among REMI’s findings [1] were CO2 emissions that were 33 percent below business as usual in 10 years and 52 percent in 20 years.

There was no bill when the REMI study was done, but that changed with the introduction of the Energy Innovation and Carbon Dividend Act in 2018. [2,3]. By mid-2020, there were eight more carbon pricing bills in Congress, five of which featured a household carbon dividend.

Columbia University (CGEP) [4] and Resources for the Future (RFF) [5] analyzed several of these bills, including the Energy Innovation and Carbon Dividend Act, using their own peer-reviewed models. CGEP modeled the policy for 12 years and RFF modeled it for 16 years.

To interpret results in a meaningful way, it’s very important to place all the numbers on a consistent basis. With the declared U.S. goal of cutting emissions to half of 2005 emissions by 2030, we adjusted the study results accordingly. Assuming a 2022 start, here are the estimated reductions: [6]

 

2030 (8 years)

2034 (12 years)

REMI

33 percent

46 percent

CGEP

33-34 percent

36-39 percent

RFF

52 percent

61 percent

These models vary in their structure, assumptions, and outcomes, but they all agree that this policy will rapidly cut carbon emissions, particularly in the vital early action years. CCL looks forward to updated modeling of the 2021 bill.

In a Nutshell: Three independent models of the Energy Innovation and Carbon Dividend Act showed that if enacted in 2022, it could cut carbon emissions 33 to 52 percent below 2005 levels. 

  1. Nystrom, S. and P. Luckow. “The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax.” Regional Economic Models, Inc. and Synapse, Inc. (9 June 2014).
  2. “H.R.7173 - The Energy Innovation and Carbon Dividend Act of 2018.” Congress.gov (27 Nov 2018).
  3. The Energy Innovation and Carbon Dividend Act had a more aggressive price schedule, starting at $15/tCO2e in Year 1, than REMI used. It also had a ‘missed-target’ mechanism that would increase the annual carbon fee increment from $10 to $15/tCO2e if emissions did not decline fast enough. The bill was reintroduced in January 2019 and again in April 2021. 
  4. Kaufman, N. et al. “An Assessment of the Energy Innovation and Carbon Dividend Act.” Columbia | SIPA Center on Global Energy Policy (6 Nov 2019).
  5. Hafstead, M. “Carbon Pricing Calculator.” Resources for the Future (10 Aug 2020).
  6. The year 2030 was selected because of the U.S. declared target for 2030, assuming the policy would be enacted in 2022. The year 2034 was selected because 12 years was the shortest period modeled (by CGEP) and no model comparisons could be made beyond that. 

This talk was last updated on 07/09/22.

Question:  How does reducing the use of fossil fuels benefit health?

Answer: Climate change and fossil fuel air pollution are intimately linked. Burning fossil fuels harms our health directly by generating pollutants, and indirectly through release of greenhouse gases. Both the direct and indirect costs are often paid for by taxpayers. Cutting back on fossil fuels improves public health in a couple different ways.

Cutting fossil fuel use reduces air pollutants that impact our health. The greatest benefit comes from cutting back on coal, which even under stringent pollution rules still emits lung-damaging fine particulates, sulfur gases, and nitrogen oxides (NOx)[1,2] as well as mercury, a neurotoxin. [3] Motor fuels also emit particulates, smog-promoting hydrocarbons, and NOx. Natural gas burns cleaner – no particulates, sulfur, or mercury – but still emits NOx and, of course, CO2. [4]

Reducing fossil fuel use also reduces greenhouse gases. Although CO2 is not inherently toxic, it is the major cause of climate change, which has its own slate of public health impacts. These include heat stress, more powerful storms, extremes of drought and flooding, spread of infectious disease, and even nutritional deficiency. That’s why the EPA found in 2009 that CO2 from burning fossil fuels is dangerous to human health, and that determination was upheld by the Supreme Court. The impacts of climate change have been acknowledged as the major public health challenge of the century. [5] All fossil fuels contribute to global warming if we discharge their emissions into the atmosphere.

Air pollution can be reduced with various kinds of scrubbers and catalysts on smokestacks and tailpipes, [6] but most of those treatments don’t reduce CO2. Curtailing the use of fossil fuels can benefit our health by reducing both air pollution and the worldwide effects of climate change.

In a Nutshell: Any policy that curtails the use of fossil fuels will benefit our health by reducing both local air pollution and the worldwide effects of climate change. Recent research tells us that cutting carbon emissions could save 4.5 million American lives by 2050.

  1. “Criteria Air Pollutants.” U.S Environmental Protection Agency (accessed 1 Feb 2018).
  2. “NAAQS Table.” U.S Environmental Protection Agency (accessed 1 Feb 2018).
  3. “Health Effects of Exposures to Mercury.” U.S Environmental Protection Agency (accessed 1 Feb 2018).
  4. Deru, M. and P. Torcellini. “Source Energy and Emission Factors for Energy Use in Buildings.” NREL Technical Report NREL/TP-550-38617, Tables 8-11 (Jun 2007).
  5. Watts, N., et al. “The Lancet Countdown on health and climate change: from 25 years of inaction to a global transformation for public health.” The Lancet 391 10120, 581-630 (10 Feb 2018).
  6. “Emission control technologies.” EPA Base Case v410 Documentation, Chap. 5. U.S. Environmental Protection Agency (Jul 2015).

This talk was last updated on 05/04/21.

Question:  How will a carbon fee affect agriculture?

Answer:  Agriculture is intimately connected to both climate and energy. Direct fuel usage and energy-intensive fertilizer comprise a significant part of farm costs, [1] as much as 61 percent of operating expenses for some crops. [2] It’s understandable that farmers would be wary of any policy that could further increase these costs.

At the same time, negative effects of climate change are starting to appear. Extreme, unseasonable weather can harm crops directly and contribute to soil degradation. [3,4] Other climate threats include heat stress and water shortages [5,6] and increased insect damage, [7] all of which could have serious impacts on both crops and livestock.

Carbon pricing policies are aimed squarely at putting a lid on climate-changing emissions. Further they can and should recognize the unique challenges farmers face. Under some recent bills, fuels used on farms, chiefly diesel fuel for tractors and other equipment, would be exempt from the carbon fee. [8]  In the short term, carbon pricing may still increase costs for operations most reliant on fossil fuel inputs, [9] but it will also give a huge boost to private investment in renewable and energy efficiency innovations.

Many of these will benefit agricultural communities, [10] enhancing the competitiveness of not only wind energy, but also energy storage technologies that will make it work better with the grid. [11] The policy will also help advance new concepts in more sustainable biofuels and bioenergy from residues, energy crops, and agroforestry. [12,13]

At the same time, reducing fossil fuel emissions will lessen climate impacts. Farmers who prioritize regeneration of carbon-enriched soil will assist this process and also require less fossil energy inputs, [14] as well as increasing soil fertility and resilience to floods and drought.

In a Nutshell: Agriculture and climate are intimately connected. Unmitigated climate change will increasingly damage crops and livestock. A carbon fee is the most efficient way to reverse that trend. Carbon pricing policies can be designed to relieve the impact on farmers while opening up new business opportunities in the agricultural sector.  

  1. “Selected Farm Production Expenditures by Rank, Year – United States.” U.S. Dept. of Agriculture (Aug 2017).
  2. “Energy for growing and harvesting crops is a large component of farm operating costs.” U.S. Energy Information Administration (17 Oct 2014).
  3. “Climate Impacts on Agriculture and Food Supply.” U.S. EPA (archived) (accessed 5 Apr 2018).
  4. Baumhardt, R.L., B. Stewart, and U.M. Sainju. “North American Soil Degradation: Processes, Practices, and Mitigating Strategies.” Sustainability 7(3):2936-2960 (Mar 2015).
  5. Marshall, E., M. Aillery, S. Malcolm, and R. Williams. “Climate Change, Water Scarcity, and Adaptation in the U.S. Fieldcrop Sector.” Report by U.S. Department of Agriculture Economic Research Service (Nov 2015).
  6. Marshall, E. and M. Aillery. “Climate Change, Water Scarcity, and Adaptation.” USDA Economic Research Service (25 Nov 2015).
  7. Deutch, C.A. et al. “Increase in crop losses to insect pests in a warming climate.” Science 361:6405, 916-919 (31 Aug 2018).
  8. “H.R.2307  - The Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  9. Sands, R. and P. Wescott. “Impacts of Higher Energy Prices on Agriculture and Rural Economies.” ERR-123, U.S. Dept. of Agriculture, Econ. Res. Serv. (Aug 2011).
  10. Seigner, K., K. Brehm, and M. Dyson. “Seeds of Opportunity: How Rural America is Reaping Economic Development Benefits from the Growth of Renewables.” Rocky Mountain Institute (Jan 2021).
  11. Hofstrand, D. “The Coming Electricity Storage Revolution.” Agricultural Marketing Resource Center (Apr 2015).
  12. Moodley, P. “Sustainable biofuels: opportunities and challenges.” Applied Biotechnology Reviews, pp. 1-20(2021).
  13. “Agroforestry: Working Trees for Energy.” USDA National Agroforestry Center (Feb 2012).
  14. “Reduction in Annual Fuel Use from Conservation Tillage.” USDA Natural Resources Conservation Service (Aug 2016).

This talk was last updated on 07/10/22.

Policy Design

Question:  What’s been introduced in Congress regarding Carbon Fee and Dividend style bills?

Answer: Carbon fee and dividend bills started to appear in Congress in 2018. The carbon fee and dividend has emerged as the single most effective tool to reduce America’s carbon pollution to net zero by 2050, which explains its growing popularity among lawmakers. [1] It’s based on a CCL-supported framework to account for the hidden costs of burning fossil fuels, thus driving down greenhouse gas (GHG) emissions by stimulating American innovation and ingenuity. Scientists and economists alike [2,3] say it’s the best first step to reduce the impact of global warming.

Here’s how it works in bills that have been introduced so far:

  • A carbon fee is placed on coal, oil, or natural gas as it enters the U.S. economy.
  • The fee starts at $15-$59 per metric ton of CO2 and increases by a set dollar amount  or percentage every year until a final emissions goal is achieved.
  • If emission cuts don’t meet mandatory targets, the annual fee increment becomes larger.
  • Most of the money is distributed equally to American residents as carbon dividends or tax credits, giving consumers cash to spend in any way they see fit, while businesses compete for those dollars by reducing their carbon footprints.
  • A carbon border fee adjustment is placed on emissions-intensive imports, discouraging businesses from relocating to where they can pollute more, and encouraging other nations to price carbon.

Because the steady increase in fossil energy prices is predictable, it will stimulate invention and investment to cut carbon in myriad ways. Consumers will know they can count on increasing dividends to help them through the transition to a world of clean, energy-efficient goods and services.

CCL’s favorite among these bills is the Energy Innovation and Carbon Dividend Act [4], which at the time of this posting has 89 sponsors in the House of Representatives. Hundreds of local businesses, governments, non-profits, faith groups, and prominent individuals [5] are on board with this effective step to address climate change.

In a Nutshell: A Carbon Fee and Dividend policy will rapidly drive down climate-warming emissions by taxing polluters and then dividing that money into ‘carbon cash back’ payments to American households. This incentivizes businesses, investors, and consumers to seek out the best ways to cut emissions without placing an undue cost burden on low- and middle-income Americans.

  1. Hafstead, M. “Carbon Pricing Bill Tracker.” Resources Magazine, Resources for the Future ( 21 Jun 2021).
  2. Miller, D.H. and J. Hansen. “Why Fee and Dividend Will Reduce Emissions Faster Than Other Carbon Pricing Policy Options.” Our Energy Library (Nov 2019).
  3. “Economists’ Statement on Carbon Dividends.” Wall Street Journal (16 Jan 2019).
  4. “H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  5.  “Support for the Energy Innovation and Carbon Dividend Act.” energyinnovatinonact.org/supporters-overview (accessed 07 Apr 2021).

This talk was last updated on 11/28/21.

Question:  How can carbon cashback payments be efficiently delivered to households?

Answer:  The carbon cashback payment is one of the three legs of a carbon dividend policy such as that illustrated in H.R.2307, the Energy Innovation and Carbon Dividend Act, [1] so it’s important to get it right. CCL previously commissioned an expert study to dive deeply into how this would be done. [2] Our goal was to learn how to minimize administrative cost and make it work smoothly for everyone involved, while still getting the money to as many households as possible.

The expert study confirmed that remitting carbon cashback payments (also referred to as ‘carbon dividends’) directly to households is, as CCL had anticipated, the least costly and least burdensome way to recycle the revenue to consumers.

In this study, all the fees collected from fossil fuel suppliers go into a fund administered by the Treasury Department. All of that money, after administrative overhead, is then distributed to U.S. residents, who are identified from existing tax records or through a special form submitted by those who haven’t filed income taxes.

Most recipients would get their carbon cashback payments in the form of a direct bank deposit or as money added to an existing government-issued debit card, with paper checks as a backup. Eligibility changes – births, deaths, adoptions, age changes – would be taken care of on a monthly basis, and any discrepancies between the money they are entitled to and what they have received would be reconciled on the next income tax return.

CCL is satisfied that these steps would make the carbon cashback delivery fair, flexible, and highly visible to households.

For more details, refer to the Working Paper or accompanying FAQ. Note that this paper was written prior to introduction of the Energy Innovation and Carbon Dividend Act, so there are some minor policy differences.

In a Nutshell: Carbon cashback payments, or carbon dividends, can   be efficiently sent to American households as direct bank deposits, debit card transfers, or paper checks. CCL commissioned a study which developed detailed forms and procedures that minimize administrative cost for this essential component of a carbon fee and dividend plan.

  1. “H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  2. Lerman, A.H. “Paying Dividends From Carbon Fee Revenue To American Residents.” Working Paper commissioned by CCL (updated May 2018). Mr. Lerman was an economist in the Office of Tax Analysis at the Treasury Department who analyzed, developed, and recommended tax policies. He has provided expert advice to policymakers, working on every major tax reform legislation and administrative reform since 1971.

This talk was last updated on 10/23/21.

Question:  Won’t a carbon fee hurt American business in the world market?

Answer:  The Energy Innovation and Carbon Dividend Act will not disadvantage U.S. business in the world market, because it has a provision built in to protect trade competitiveness: a ‘Carbon Border Fee Adjustment’ imposed on covered fuels and ‘emissions-intensive trade-exposed’ (EITE) goods [1,2] that cross our border in either direction. These goods include products like steel, aluminum, cement, glass, certain chemicals, and some agricultural products. [3]

Goods that fall under this EITE classification and are imported from a country that does not have a carbon price equivalent to ours will have to pay a surcharge to make up the difference. Conversely, an American-made EITE product exported to any country will get a refund for the carbon fee paid in the U.S.

This border adjustment prevents the carbon fee from putting American businesses at a competitive disadvantage in global markets. It will also remove the incentive for them to relocate overseas to avoid the carbon fee. In addition, it will encourage foreign countries to adopt their own carbon fee so the money will enter their economy instead of ours. In fact, the European Union (EU) has now officially committed to a border adjustment starting in 2026, while Canada and Japan are considering it as well. [4] Together, these countries account for 38 percent of our international trade. [5] We can’t afford to get left in the dust on this issue. 

The carbon border fee adjustment in H.R.2307 is also designed to comply with international trade law. [6,7] Any funds collected from other countries in excess of refunds to U.S. companies would go to the Green Climate Fund. [8]

Click here for supporting graphics

In a Nutshell: The Energy Innovation Act includes a border adjustment mechanism that prevents energy-intensive U.S. businesses from moving overseas to escape the carbon fee. It will also encourage other countries to put a price on carbon, as many of our biggest trading partners have already done.

  1. “Legislation: Energy-Intensive, Trade-Exposed Industries.” American Council for an Energy-Efficient Economy (accessed 21 May 2020).
  2. Flannery, B., J. Hillman, J.W. Mares, and M. Porterfield. “Framework Proposal for a US Upstream Greenhouse Gas Tax with WTO-Compliant Border Adjustments.” Resources for the Future (Mar 2018).
  3. Mares, J.W. and B.P. Flannery. “WTO-Compatible Methodologies to Determine Export Rebates and Import Charges for Products of Energy-Intensive, Trade-Exposed Industries, If There Is an Upstream Tax on Greenhouse Gases.” Working Paper 18-19. Resources for the Future (Oct 2018).
  4. “Carbon Border Adjustment Mechanism: Questions and Answers.” European Commission (14 Jul 2021).
  5. “List of the Largest Trading Partners of the United States.” Wikipedia. (27 Nov 2020).
  6. Pauwelyn, J. “Carbon Leakage Measures and Border Tax Adjustments under WTO Law.” In Research Handbook on Environment, Health and the WTO (21 Mar 2012).
  7. “Climate and carbon: aligning prices and policies.” OECD Environment Policy Paper No. 1 (Oct 2013).
  8. “Green Climate Fund.” GCF (accessed 29 Apr 2021).

This talk was last updated on 07/14//21.

Question:  Isn’t it going to cost a lot to administer a carbon fee and dividend?

Answer:  No. The straightforward design keeps costs very low compared to other federal programs like the IRS and Social Security. Collecting the fee is streamlined because there are already tax collection processes in place for the fee-paying companies, and there are a limited number of them. Sending the carbon cash back payments to households is relatively simple because every adult gets the same amount, as does every child; names and addresses come from existing tax records; there is no need for complicated means testing; and over 90 percent of the payments can be handled through electronic bank deposits. [1]

Real-world experience from abroad supports the view that administrative costs of collecting carbon fees are low, with reported costs between 0.1 and 1 percent of revenue. [2]

CCL has made a detailed estimate by comparing the IRS budget of $11.4 billion [3] with similar functions in a carbon fee and dividend program. For completeness, we considered startup costs, amortization period, population growth, [4] and a revenue forecast based on the emissions reduction schedule specified in the Act. [5]

This gave us annual administrative costs of about $4 to $5 billion per year, which is about 6.8 percent of revenues in year one, but as revenues grow along with the fee, it drops to only about 1.7 percent by year 10. It does rise again as emissions get very low, cutting the carbon fees that are collected, but will be phased out when adult dividends fall consistently below $20 per month.

The Act’s administrative costs would be taken from program revenues, so there is no additional cost to American taxpayers.

In a Nutshell: By design, the administrative costs of the Energy Innovation and Carbon Dividend Act will be quite low so that every American gets a fair share of the carbon cash collected from fossil fuel companies. We estimate that over the lifetime of the policy, running the program will cost two percent of the carbon fees collected, with the remaining 98 percent paid out to American households.

  1. Lerman, A.H. “Paying Dividends From Carbon Fee Revenue To American Residents.” Working Paper commissioned by CCL (updated Oct 2017).
  2. Carl, J. and D. Fedor. “Tracking global carbon revenues: A survey of carbon taxes versus cap-and-trade in the real world.” Energy Policy 96, 50-77. (Sep 2018).
  3. “Budget in Brief – Internal Revenue Service FY2018.” (Mar 2018).
  4. “2014 National Population Projections Tables.” U.S. Census Bureau (2014).
  5. “H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).

This talk was last updated on 05/05//21.

Question:  Should greenhouse gas regulations be exchanged for a carbon fee?

Answer:  This question has been debated extensively. The earliest carbon fee and dividend bills did limit the EPA’s ability to enforce certain regulations on greenhouse gases (GHGs ) under the Clean Air Act, but those limitations were absent from most bills that were introduced in the 117th Congress. [1,2,3]

The only regulations in question were for GHGs from large stationary sources, primarily those embodied in the Clean Power Plan. [4,5,6] There is strong evidence from economic literature that a robust carbon fee and dividend policy would reduce those emissions more efficiently than existing or proposed regulations, [7] and that such regulations would be largely redundant.

Initially, regulatory limitations had been proposed largely to attract conservative support. However, with the repeal of Clean Power Plan regulations in 2019, [8] regulatory pauses became essentially moot. Another point is that some influential organizations strongly objected to any modification of the Clean Air Act, regardless of how narrow it might have been. Given these considerations and the rapidly changing political circumstances around climate policy starting in 2019, a regulatory pause could no longer be justified.  

In a Nutshell: Various carbon fee and dividend bills have offered to suspend the enforcement of certain EPA regulations on greenhouse gases in order to broaden support. However, changing political circumstances have resulted in the removal of regulatory pauses from most of these proposals starting in 2019.

  1. “H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  2. “H.R.2451 – America’s Clean Future Fund Act.” Library of Congress (13 Apr 2021).
  3. “S.2085 – Save Our Future Act.” Library of Congress (16 Jun 2021).
  4. “FACT SHEET: Overview of the Clean Power Plan.” U.S. Environmental Protection Agency (snapshot) (19 Jan 2017).
  5. “Regulation Database – New Source Performance Standards for GHG Emissions from Electric Generating Units.” Columbia Law School Sabin Center for Climate Change Law (accessed 30 Apr 2021).
  6. “PSD and Title V Permitting Guidance for Greenhouse Gases.” U.S. Environmental Protection Agency, Office of Air and Radiation (Mar 2011).
  7. Rosetti, P., D Bosch, and D. Goldbeck. “Comparing Effectiveness of Climate Regulations and a Carbon Tax.” American Action Forum (2 Jul 2018).
  8. “Affordable Clean Energy Rule.” U.S. Environmental Protection Agency (19 Jun 2019).

This talk was last updated on 12/28/21.

Question:  Why are carbon dividends counted as taxable income?

Answer:  The 2010 Pay-As-You-Go (PAYGO) Act, [1,2] as well as procedural rules in both Houses of Congress, [3] dictate that any bill that affects the budget must be scored by the Congressional Budget Office (CBO) to be deficit-neutral over 10 years, and if it’s not, the deficit must be offset in some way.

According to that same CBO, any new tax on business will suppress other taxes they pay by 21 to 25 percent of the new revenue. [4,5] If that loss is not offset, it would trigger automatic cuts to federal programs that include farm support, student loans, and even Medicare. [6]

With respect to a carbon fee, CBO has already ruled that carbon pricing, even if the cost is passed on to consumers, would be subject to the offset requirement. [7]

There are four ways for a carbon pricing bill to satisfy this requirement:

  • Take 21 to 25 percent of the carbon fee revenue off the top and pay it to the Treasury to compensate for presumably lost future tax revenues.
  • Designate the carbon dividend as taxable income, in which case the government recovers the lost revenue in the income taxes paid by households.
  • Allow the automatic spending cuts, known as ‘sequestration,’ to take place.
  • Find enough support in Congress to waive the PAYGO rules.

Energy Innovation and Carbon Dividend Act sponsors have agreed that the simplest, most politically viable solution is to designate the carbon cash back payments (carbon dividends) as taxable income. Because personal income tax rates start at 10 percent and go up to 37 percent at the highest income, this is actually the most progressive option. It helps the most vulnerable households because they get to keep more of their dividend cash compared to wealthy Americans who are typically responsible for much higher emissions.

In a Nutshell: The Energy Innovation Act was carefully designed to satisfy the PAYGO law which prohibits non-budgetary legislation from increasing the deficit. Making carbon dividends taxable satisfies that requirement and inherently protects the finances of poor and middle-income families. 

  1. “What is PAYGO?” The Tax Policy Center’s Briefing Book (accessed 5 Jul 2018).
  2. “H.J.Res. 45 (111th): Increasing the statutory limit on the public debt.” Govtrack (accessed 5 Jul 2018).
  3. “FAQs on PAYGO.” House Committee on the Budget (13 Jul 2020).
  4. “The Role of the 25 Percent Revenue Offset in Estimating the Budgetary Effects of Legislation.” CBO Economic and Budget Issue Brief (13 Jan 2009).
  5. “New Income and Payroll Tax Offsets to Changes in Excise Tax Revenues for 2019-2029.” Joint Committee on Taxation (28 Feb 2019).
  6. “How PAYGO Rules Could Affect Tax Reform.” Committee for a Responsible Federal Budget (18 Oct 2017).
  7. Stone, C., J. Horney, and R. Greenstein. “How CBO estimates the cost of climate-change legislation.” Center of Budget and Policy Priorities (13 May 2008).

This talk was last updated on 04/30/21.

Question:  Why a carbon fee? What’s wrong with cap and trade instead?

Answer:  Cap and trade has worked well for pollutants like sulfur gases,[1] but carbon is a bit of a different story. Unlike sulfur — an unwanted contaminant — carbon is what gives a fuel most of its energy. It’s emitted not just from huge power plants, but from a billion smaller sources all the way down to your backyard gas grill.

Cap and trade [2] as generally practiced only covers polluters above a certain size. It requires bureaucracy to select which companies get covered, and then allocate carbon allowances to each one. Their CO2 emissions must be measured, reported, and verified. Covered companies can buy and sell allowances, but the price is bid up and down by market traders, who grab a piece of the pie. This creates uncertainty for businesses and investors, stalling decisions to undertake the big projects needed to slash emissions. Another sore point is the use of ‘offsets,’ [3] which allows large facilities to continue polluting in exchange for funding some faraway tree planting or renewable energy.

A carbon fee [4] can cover more emissions and minimize loopholes. Since the fee is applied at the source, it can cover all fossil fuels emitters regardless of size. The tons of carbon are easy to measure and verify. Because it’s the fuel that gets priced, there’s no need for debate over individual company allocations. There are no middlemen to bleed off money from tradeable allowances . It creates a steady, predictable price signal, so businesses and consumers can plan their energy investments. It lends itself more easily to policy alignment between nations. 

Cap and trade is said to be ‘market-friendly,’ but a carbon fee also fits that description, with more emissions covered, less bureaucracy, lower costs, and more predictability.

In a Nutshell: Placing a predictable fee on carbon is less complex to administer than most cap-and-trade designs. It would cover all fossil fuel emitters, no matter how large or small. It would avoid price volatility, market manipulation, and the need for emissions tracking. It also lends itself to policy alignment between nations.

  1. “Acid Rain Program.” U.S. Environmental Protection Agency. (16 May 2017).
  2. “Cap and Trade Basics.” Center for Climate and Energy Solutions. (accessed 12 Mar 2018).
  3. Gurgel, A. “Carbon Offsets.” MIT Climate Portal (11 Sep 2020).
  4. “Carbon Tax Basics.” Center for Climate and Energy Solutions. (accessed 12 Mar 2018).

 This talk was last updated on 07/20/22.

Question:  Why is revenue neutrality important for a carbon fee?

Answer: Revenue neutrality simply means that the money collected from polluters is cycled back into the consumer economy instead of being parceled out to government contractors. In a carbon fee and dividend plan, [1] the ‘consumer economy’ means American households, because the spending decisions they make will send the clearest signal to the business and investment world about the need to decarbonize. It also ensures that the cost of cutting emissions does not fall on the backs of the poor.

Some may ask, Why not embrace a ‘revenue positive’ principle where government targets the money toward clean energy, efficiency upgrades, and green jobs?

Our main reason is because the decarbonization of our economy is very complicated and needs the cumulative brain power of ‘the crowd’ – scientists, engineers, farmers, builders, store owners, and everyone else – not just a few government officials trying to make optimal decisions on highly technical questions while under pressure from politicians who control their funding.

Nearly 70 percent of our economy is consumer spending [2], so putting carbon cash back into the hands of all Americans will stimulate climate-friendly decision-making all the way from the corner store up to the executive boardroom.

Many of the investments required to scale up a myriad of potential solutions will be large and financially risky. We don’t want to see all of those risks borne by the taxpayers, but rather spread out between government and private investors. Investment firms, banks, and entrepreneurs, seeing a predictable price signal, will implement due diligence when evaluating which breakthroughs are likely to cut emissions most quickly and efficiently.

In a Nutshell: Revenue neutrality means recycling carbon fee dollars back into the private consumer economy. Because nearly 70 percent of our economy is consumer spending, putting the cash collected from polluters into the hands of American families will stimulate efficient climate-friendly decision-making all the way from the corner store to the executive boardroom.

Related: Energy Innovation and Carbon Dividend Act, Economic Impacts of Pricing Carbon, Dividend Delivery.

  1. “H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021.” Library of Congress (01 Apr 2021).
  2. “Shares of gross domestic product: Personal consumption expenditures,” FRED Economic Data, Federal Reserve Bank of St. Louis (27 Apr 2018).

This talk was last updated on 12/14/21.

Question:  Where do things stand now with cutting CO2 through regulations?

Answer:  Environmental regulations have been effective in controlling many kinds of pollution. For example, the phaseout of lead in gasoline, [1] the acid rain program, [2] and control of mercury and other air toxics from power plants [3] have returned far more in health benefits than they have cost.

However, controlling greenhouse gases (GHG) like CO2 under the Clean Air Act [4] has always been tricky, and now has become even harder. Although the 2007 Supreme Court decision Massachusetts v. EPA, [5] allowed CO2 to be categorized as an air pollutant, the scope of that authority has been severely curtailed in the 2022 West Virginia v. EPA decision. [6]

This underscores the necessity to address GHG emissions through new, unambiguous legislation. CO2 comes from such a huge variety of sources, from the largest coal-fired power plant to your neighbor’s leaf blower, that controlling them like other air pollutants would be a daunting task even if it weren’t for the limitations now imposed by the Court. Greenhouse gases can’t simply be scrubbed or filtered out of every emissions source. Cutting them requires a fundamental overhaul of our energy systems, with many different solutions to suit different regional and local economies, resources, and geography.

To achieve this, passing legislation to put a nationwide price on carbon would not run afoul of the Supreme Court ruling and would also be less costly to our economy than a collection of regulatory policies, according to a 2011 survey of 40 top economists. [7]

For all these reasons, clear, durable legislation that puts a steadily increasing price on fossil carbon, stimulating innovation everywhere, is the right way to cut greenhouse gas emissions.

In a Nutshell: EPA regulations work well for many pollutants, but greenhouse gases can’t simply be scrubbed or filtered out of smokestacks like soot or mercury. Besides, the Supreme Court has now essentially closed the door on CO2 regulation under the Clean Air Act. A fundamental, legally robust overhaul of our energy system is required, which scientists and economists agree can best be achieved by putting a steadily increasing price on fossil carbon.

  1. “EPA’s Use of Benefit-Cost Analysis: 1981-1986.” U.S. EPA Report EPA-230-05-87-028 (Aug 1987).
  2. Chestnut, L.G. and D.M. Mills. “A fresh look at the benefits and costs of the US acid rain program.” Envir. Mgmt. 77:3, 252-266 (Nov 2005).
  3. “Mercury and Air Toxics Standards: Healthier Americans.” U.S EPA (accessed 21 May 2018).
  4. “Clean Air Act (United States).” Wikipedia (accessed 3 Jul 2022).
  5. “Massachusetts v. EPA.” U.S. Department of Justice (14 May 2015).
  6. “West Virginia v. EPA.” Wikipedia (accessed 3 Jul 2022).
  7. “Carbon Tax.” Chicago Booth IGM Forum (20 Dec 2011).

This talk was last updated on 07/03/22.

Question:  How can a Federal carbon price be reconciled with existing state programs?

Answer:   There are two ways to reconcile Federal legislation with existing state programs such as the Regional Greenhouse Gas Initiative [1] or the California Cap and Trade program [2].

First, stacking, which means the state and federal programs would both continue independently for some period; and second, integration, where the two programs would be merged in some way that is negotiated between the state and federal governments.

As of 2021, all existing state-level carbon pricing programs in the U.S. are emissions trading systems (ETS). There are examples around the world where carbon taxes and emissions trading are both used in the same jurisdiction to complement each other. [3,4] These examples can provide guidance if necessary.

CCL strongly recommends the clarity of a nationally uniform carbon fee, but the existence of existing state or regional ETS programs need not stand in the way of passing national legislation. CCL’s view is that stacking is the most suitable option.

In a Nutshell: A national carbon fee should not preempt of supersede any State law or regulation that also promotes decarbonization of our economy. CCL’s view is that the most suitable way to achieve this is for the federal program to be “stacked” on top of any existing State-level emissions reduction program, such as emissions trading, as long as the State chooses to continue its own program. 

  1. “Regional Greenhouse Gas Initiative.” RGGI, Inc.
  2. “California Cap and Trade.” Center for Climate and Energy Solutions.
  3. “State and Trends of Carbon Pricing 2021.” Publ. World Bank Group, Washington, DC. (May 2021).
  4. “Emissions trading systems and their linking: challenges and opportunities in Asia and the Pacific.” Asian Development Bank (2016).

This talk was last updated on 12/04/21.

Technology

Question: How will a carbon fee help expand renewable energy?

Answer: The price signal created under the Energy Innovation and Carbon Dividend Act will accelerate the adoption of renewables.

The term renewables generally encompasses solar, wind, hydropower, and sometimes biopower – electricity from biomass. These are all ways of getting electricity from the sun without increasing CO2 in the atmosphere, and all are mature technologies.

Under a carbon fee, as fossil energy bears a steadily higher cost, renewable sources will be more and more attractive to electric utilities and manufacturers. With the need to electrify many of our energy needs, from the cars we drive to the way we heat our homes, the demand for climate-friendly electricity will go up rapidly.

There are still obstacles to the continuing growth of renewables. The biggest one is intermittency. The wind doesn’t always blow and the sun doesn’t always shine. [1,2] Hydropower and biomass supplies tend to be seasonal and may be vulnerable to extreme weather. One important solution for intermittency is energy storage, of which there are many competing forms, [3] but most are still not fully mature, [4] so renewables today are often backed up by natural gas plants that can be fired up quickly.

Another challenge is infrastructure. [5] Renewable resources are often located far from population centers, and the electrical grid was designed around large centralized power plants. That network has to be modernized and upgraded. Complex, outdated power markets need to be streamlined. [6] Facilities for quick, easy EV charging must be expanded. [7]

All of these changes will happen much faster under this policy, because the ‘market pull’ of a rising carbon fee creates the financial incentive to attract private investment in both tried-and-true technologies and new innovations.

In a Nutshell: Renewable energy will become more economical as the carbon fee steadily raises the price of fossil energy. There are still big technical challenges like the need for extensive energy storage and supporting infrastructure and streamlining complex, outdated electric power markets. But the ‘market pull’ of a rising carbon fee will stimulate private investments in both tried-and-true technologies and new innovations.

  1. Hanania, J., K. Stenhouse, and J. Donev. “Intermittent Electricity.” Energy Education, University of Calgary (27 Aug 2017).
  2. Kreutz, T., E. Larson, and B. Williams. “Understanding Challenges with Intermittent Renewable Electricity Expansion.” 2016 Carbon Mitigation Initiative Annual Report, Princeton University (April 2017).
  3. “Energy Storage.” Wikipedia (10 Jul 2018).
  4. Rhodes, J. “Energy Storage Is Coming, But Big Price Declines Still Needed.” Forbes (18 Feb 2018).
  5. Ahmed, A. “We’re doing a great job of creating renewable energy—but we don’t have the infrastructure to actually use it.” Popular Science (18 Jan 2018).
  6. Merchant, E.F. “Renewables Demand a Revamp of Power Market Rules.” Greentech Media (19 Nov 2018).
  7. Merchant, E.F. “The Next Big Obstacle for Electric Vehicles? Charging Infrastructure.” Greentech Media (03 Nov 2017).

This talk was last updated on 05/05/21.

Question:  Where does natural gas fit in climate policy?

Answer: Burning natural gas for power or heat produces CO2 and certain air pollutants, but significantly less than coal or oil for the same amount of energy delivered. [1] When burned for electricity, that advantage widens because natural gas power plants today are far more energy-efficient than coal plants. [2]

Unlike coal, though, natural gas can leak into the air at various stages of its supply chain. When that happens, its main component – methane – is a far more potent greenhouse gas than CO2. [3] Estimates of ‘fugitive emissions’ vary from 1.2 to 3.3 percent of natural gas consumed, [4,5] A 2015 analysis of life-cycle emissions concluded that replacing coal-generated power with natural gas power reduces GHG emissions by 37 to 58 percent, [6] but that leakage is still a big concern.

Carbon fee and dividend bills vary in their approach to methane leakage. Some expressly stipulate that methane emissions must be taxed, while others leave that decision up to regulators. A separate tax on industrial methane emissions has also been proposed. [7] In all cases, measurement and attribution of leakage will be technically challenging. [8]

There is also a separate active program – the ‘Quad-O rules’ – to reduce methane emissions through EPA regulation. [9]

CCL holds that a 100 percent cut in net greenhouse gas emissions by 2050 is necessary to achieve a livable future. It’s difficult to predict what role natural gas can play and still reach that target. Should natural gas serve as backup for intermittent renewables like wind and solar? [10] Can it be safely managed with CO2 capture and sequestration? [11] Should it be used in transportation? [12]

CCL’s view is that an aggressive carbon price will compel the energy marketplace to answer these questions in the most effective, efficient, and long-lasting way.

In a Nutshell: Natural gas is substantially less emissions-intensive than coal, but only if methane leakage is substantially reduced. While transitioning our economy to net zero greenhouse gas emissions, a rising carbon fee is the most effective, efficient way to answer the question of what role natural gas will play in that transition.  

  1. “Emissions Factors for Greenhouse Gas Inventories.” U.S. EPA (4 Apr 2014).
  2. “What is the efficiency of different types of power plants?” U.S. Energy Information Administration (10 May 2017).
  3. “Understanding Global Warming Potentials.” U.S. EPA (accessed 24 Apr 2018).
  4. “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016: Executive Summary.” U.S. EPA (12 Apr 2018).
  5. Howarth, R.W. “A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas.” Editorial in Energy Science & Engineering 2:47-60 (15 May 2014).
  6. “Life-Cycle Greenhouse Gas Assessment of Coal and Natural Gas in the Power Sector.” Congressional Research Service Report R44090 (26 Jun 2015).
  7. Melvin, J. “Proposed methane fee for now remains intact in US Senate's draft reconciliation bill.” S&P Global Platts (16 Dec 2021).
  8. “Methane Research Series: 16 Studies.” Environmental Defense Fund (2012-2018).
  9. Tsang, L. “EPA’s Methane Regulations: Legal Overview.” Congressional Research Service (24 Jan 2018).
  10. Kraft, A. “How Competition of Renewables vs. Gas is Evolving.” PointLogic Energy (30 Aug 2017).
  11. Patel, S. “Breakthrough: NET Power’s Allam Cycle Test Facility Delivers First Power to ERCOT Grid.” Power (18 Nov 2021).
  12. “Natural Gas Vehicles.” U.S. Department of Energy Alternative Fuels Data Center (18 Apr 2017).

This talk was last updated on 01/05/22.

Question:  Should biomass carbon be subject to a carbon fee?

Answer:  Scientifically speaking, it should not, because unlike fossil fuels, biomass is part of the living world’s carbon cycle. Plants draw CO2 from the atmosphere to build their biomass, but eventually that slows down and stops. When they die, they decompose, returning most of their CO2 back to the environment. [1] As long as biomass isn’t used in ways that emit more CO2 than natural degradation would, the carbon contained in the biomass is carbon-neutral.

In the U.S., most ‘biofuel’ is corn-based fuel ethanol which has only a limited climate benefit. [2] But there are bioenergy technologies beyond corn ethanol that can use farm and forest residues and energy crops more sustainably. These include advanced biofuels methods [3] that could reduce fossil CO2 from transportation – aircraft, ships, and millions of existing gasoline or diesel vehicles – by 60 to 90 percent. [4] Others foresee the potential replacement of natural gas in America’s pipelines with renewable biomethane. [5]

Furthermore, under carbon fee and dividend proposals, fossil energy used at anystage of the biomass supply chain – e.g., fertilizer manufacture, electricity, transportation fuels – will be subject to the carbon fee, and thus those carbon costs will be reflected in the product price.

There are legitimate concerns that a carbon fee could unintentionally lead to land use practices that harm biodiversity or habitat protection. For that reason, any carbon fee policy must include safeguards against such abuses.

Electrification of our energy systems is constrained by slow turnover of vehicle and building stocks. [6] Bioenergy can help reduce net GHG emissions during that difficult transition. CCL supports the exclusion of sustainably sourced biomass from the carbon fee,  but is also committed to ensuring that the policy does not encourage unsustainable or ecologically harmful use of biomass resources.

In a Nutshell: Biofuels do consume some fossil fuels in their production, and those fossil inputs will be subject to the carbon fee. However, the biobased carbon itself is not taxed because it’s part of the short-term natural carbon cycle. Sustainably sourced bioenergy could play a critical role in decarbonizing transportation sectors where reducing emissions in other ways is too slow or not technically feasible.

  1. “Terrestrial biological carbon cycle.” Wikipedia (22 Sep 2021).
  2. Jandeska, K. “Corn ethanol reduces carbon footprint, greenhouse gases.” Phys.org (24 May 2021).
  3. “Biofuels Basics.” U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy (28 Mar 2019).
  4. Green, D.L. and G. Parkhurst. Appendix A: White Paper. In “Decarbonizing Transport for a Sustainable Future, Summary of the Fifth EU-U.S. Transportation Research Symposium.” pp. 30-60 (17-18 May 2017).
  5. Ady, M. “Why biomethane is set to become a new normal.” Energy Central (20 Feb 2019).
  6. Myers, A. “The Capital Stock Turnover Problem for 100% Clean Energy Targets.” Greentech Media (18 Nov 2019).

This talk was last updated on 12/29/21.

Question:  Where does CCL stand on nuclear energy?

Answer:  CCL is supportive of nuclear energy. We think it’s important to consider all technology options, including nuclear, that will help move us quickly to 100% clean energy. We support policies like carbon fee and dividend that allow all low-carbon technologies, including nuclear, to be considered fairly on their merits. 

So, what are those merits? Many experts believe that nuclear power, a major source of low-carbon electricity in most advanced economies, will continue to play an important role in decarbonization, and CCL respects that expertise. [1] The life-cycle carbon footprint of nuclear energy is comparable to those from renewable energy. [2] Its “firm” generation [3] is reliably available when needed, making it a useful complement to more variable wind and solar energy. It takes up far less land and often can be more easily sited near existing transmission lines than remote wind and solar farms.

Like all sources of energy, nuclear power has impacts on the environment and public health, from mining, construction, and waste disposal. However, nuclear energy has proven to be far safer and have a lower impact than fossil fuels even before considering climate change. [4] And while there are important concerns about public safety and environmental impacts, the external costs of nuclear plant safety and waste storage are somewhat internalized through stringent equipment codes, insurance, and fees. [5,6] 

Relatively high cost and the slow pace of new construction have limited nuclear’s reach in the market. To address these issues, public and private entities around the world are moving forward with new, innovative designs that promise to reduce high capital cost [7,8] as well as mitigate or eliminate concerns over radioactive waste, safety, and security. [9,10,11,12]

In a Nutshell: The data shows that nuclear power’s life-cycle carbon emissions are comparable to renewables, and its safety record is hundreds of times better than fossil fuels. Its role in providing clean firm power may be crucial in future decarbonization efforts. Lingering concerns about waste and proliferation could be greatly mitigated if new reactors currently in development can be successfully commercialized. CCL supports the consideration of all technology options, including nuclear, as we move quickly to 100% clean energy that is abundant and affordable.

  1. Long, J.C.S. et al. "California needs clean firm power, and so does the rest of the world.” Clean Air Task Force (07 Sep 2021).
  2. Schlömer S., et al. “IPCC Working Group III – Mitigation of Climate Change, Annex III: Technology – specific cost and performance parameters.” In Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, p. 1335 (2014).
  3. “Firm Service.” Wikipedia (updated 29 Sep 2021).
  4. Ritchie, H. “It Goes Completely Against What Most Believe, But Out of All Major Energy Sources, Nuclear is the Safest.” Our World in Data (24 Jul 2017).
  5. “Economics of Nuclear Power Plants.” Wikipedia (19 Jan 2023).
  6. “Insurance Coverage for Nuclear Accidents.” Insurance Information Institute (17 Mar 2011).
  7. Glaser, A. et al. “Small modular reactors.” Andlinger Center for Energy and the Environment, Princeton University (Jun 2015)
  8. “NRC Certifies First U.S. Small Modular Reactor Design.” U.S. Department of Energy, Office of Nuclear Energy (20 Jan 2023).
  9. “Generation IV Reactor.” Wikipedia (updated 13 Feb 2023).
  10. Turner, B. “China is gearing up to activate the world's first 'clean' commercial nuclear reactor.” Live Science (23 Jul 2021).
  11. “Chinese molten-salt reactor cleared for start up.” World Nuclear News (09 Aug 2022).
  12. “Copenhagen Atomics submits molten salt SMR design.” Nuclear Engineering International (09 Jan 2023).

This talk was last updated on 4/3/23.

Question:  How does carbon capture and storage fit into climate policy?

Answer:  Carbon dioxide (CO2) that is removed from an emissions source and then ‘sequestered’ from the atmosphere doesn’t contribute to global warming or ocean acidification. [1] That’s why current carbon tax proposals [2] provide carbon fee refunds or credits for fossil-derived CO2 that is captured and sequestered. Operators of the sequestration sites must guarantee the safety and permanence of their CO2 storage.

This concept has been labeled in different ways – ‘carbon capture’ or ‘CO2 capture’ for the first step, and ‘storage’ or ‘sequestration’ for the second. They all mean the same thing, and in all cases may be shortened to ‘CCS’. The source of the CO2 could be a power plant, a refinery, a chemical plant, or any fossil-fueled source where CO2 would otherwise be vented to the atmosphere.

Scrubbing CO2 out of industrial gases is widely used for engineering purposes, [3] and limited amounts are currently pumped underground into oil wells for ‘enhanced oil recovery,’ [4] but CCS had not been deployed at commercial scale solely to keep it out of the atmosphere, because there was no financial incentive for doing so until a new tax credit called the ‘45Q’ credit was started in 2018. [5]

Potential destinations for large amounts of CO2 are in depleted oil and gas reservoirs or deep underground formations where it gradually combines with existing minerals. [6] Recent research has also shown that a common rock called basalt can react with CO2 more quickly than previously expected. [7]

Many studies of potential routes to decarbonization, including ones from Columbia University, [8] the Deep Decarbonization Pathways Project, [9] and the World Bank, [10] consider CCS as one of the technology options likely to be needed to play some role. If done safely and permanently, CCS can help cut emissions while facilitating an orderly transition away from fossil energy.

In a Nutshell: Carbon Capture and Sequestration (CCS), if done safely and permanently, will need to be an essential piece of the climate puzzle. The electrical grid and distribution networks for oil and gas are complex and intimately tied to our economy, so it will take time to reinvent those networks – time we simply don’t have – with minimal disruption. CCS can help maintain stability in our energy flow and distribution while maximizing the rate of decarbonization in an orderly transition.

  1. “Carbon capture and storage.” Wikipedia (1 Jul 2018).
  2. Ye, J. “Carbon Pricing Proposals in the 117th Congress.” Center for Climate and Energy Solutions (Jun 2021).
  3. Kohl, A. and R. Nielsen. Gas Purification – 5th, Chap. 2, 3, 5, and 14. Gulf Publishing Co., Houston Texas (1997).
  4. “Enhanced oil recovery.” Wikipedia (22 Nov 2018).
  5. Bomgardner, M. “45Q, the tax credit that’s luring US companies to capture CO2.” Chemical & Engineering News 98:8 (23 Feb 2020).
  6. Benson, S.M. and D.R. Cole. “CO2 Sequestration in Deep Sedimentary Formations.” Elements 4, 325-331 (Oct 2008).
  7. Xiong, W., et al. “CO2 Mineral Sequestration in Naturally Porous Basalt.” Sci. Technol. Lett. 5 (3), 142-147 (27 Feb 2018).
  8. Kaufman, N. et al. “An Assessment of the Energy Innovation and Carbon Dividend Act.” Columbia SIPA | Center on Global Energy Policy (6 Nov 2019).
  9. Williams, J.H. “The Path to Net-Zero for the United States.” IDDRI blog. (17 Feb 2021).
  10. Fay, M., et al. Decarbonizing Development: Three Steps to a Zero-Carbon Future. World Bank (2015).

This talk was last updated on 05/24/22.

Politics

Question: How does CCL reconcile its commitment to non-partisanship with its commitment to battle climate change?

Answer: When legislation draws support across party lines, it means that politicians with differing political loyalties have taken ownership. That’s the key to making laws that will endure. We can’t afford to let climate change be just another game of partisan ping-pong.

In 1935, the House passed the Social Security Act by a margin of 348 votes from both Republicans and Democrats. [1] In 1963, the Clean Air Act passed the House by 164 votes, [2] and bills to strengthen it were passed by even larger margins – 374 votes in 1970 [3] and 382 votes in 1990. [4] All these bills had bipartisan support, and were signed into law by both Democratic and Republican Presidents.

The public may not hear much about bipartisan legislation these days. It can’t compete for media attention with conflict, controversy, and scandal. However, it’s the only way really big things get done in Washington. Most legislators actually do value reaching across the aisle. We see that in the formation of caucuses, many of which cross party lines, [5] and some of which have even focused on climate. [6]

But what about the voters? Research by political scientist Dr. Celia Paris shows that, regardless of party, voters have more confidence in Congress when “a bill has bipartisan sponsorship.” They “assume that bills sponsored only by the opposite party are bad,” but bipartisan collaboration, on the other hand, “benefits a legislator’s reputation and it also increases public support for the policy.” [7]

We need legislators to support climate action regardless of party, not just to get legislation passed and signed, but to prove that they are invested in making it succeed over the long haul. It’s hard, frustrating work, but it has to be done.

In a Nutshell: A non-partisan approach to climate policy is an important pursuit simply because such policy needs to be enduring, and ownership by both major parties is the best way to ensure that outcome. Despite the bitterness and turmoil we’ve seen lately, most voters do not want blatant partisanship to poison our lawmaking when transformative legislation is urgently needed.

  1. “To Pass H.R. 7260, (P.A. 271), the Social Security Bill.” Voteview.com (accessed 05/09/18).
  2. “H.R. 6518. The Clean Air Act. Passage.” Voteview.com (accessed 05/09/18).
  3. “To Pass H.R. 17255.” Voteview.com (accessed 05/09/18).
  4. “Clean Air Act Amendments of 1990.” Voteview.com (accessed 05/09/18).
  5. “What’s the point of Congressional caucuses?” Chamber Hill Strategies (accessed 06/01/22).
  6. “Climate Solutions Caucus.” Citizens’ Climate Lobby (accessed 04/25/20).
  7. Winchester, F. “Bipartisanship improves public opinion of legislators & policy,” Citizens’ Climate Lobby (13 Feb 2018).

This talk was last updated on 06/19/22.

Question:  Where does CCL stand on the Green New Deal?

Answer:  The Green New Deal is a set of policy goals documented in a non-binding resolution that was introduced in the House of Representatives in February 2019. [1] CCL is excited that supporters of the Green New Deal have raised the urgency of climate change in the media and in the halls of Congress. We share their objective of transitioning away from fossil fuels while creating jobs and boosting the economy.

The Special Report by the IPCC in 2018 [2] made it clear that we must achieve rapid, deep emission reductions to limit global warming as close as possible to 1.5°C. This requires CO2 in the atmosphere to peak at around 420 parts per million and then start to decline. [3] This is a daunting goal, but America has always found ways to lead the world in meeting big challenges, and this must be no exception.

We believe a carbon pricing plan like the Energy Innovation and Carbon Dividend Act , reintroduced in 2021 as H.R.2307, is an essential step to drive fossil fuel emissions down quickly and without delay.

Recent polling has revealed that more Americans than ever now recognize the urgency of tackling climate change. [4] We are grateful for the work that legislators and outside groups supporting the Green New Deal have done to bring climate back to the top of the priority list for Congress, and hope these aspirations will quickly be transformed into effective legislation to protect the health, wealth, and well-being of Americans today and for generations to come. We also continue to believe that without an effective price on fossil carbon that also ensures economic equity, it will be exceedingly difficult to halt the most devastating impacts of climate change.

In a Nutshell: the Green New Deal framework is an important driver of public concern about climate change. CCL fully agrees with the climate goals of this framework and will continue to work hard to ensure that the U.S. does all it can to hold global warming as near to 1.5°C as possible.

  1. “H.Res.109 – Recognizing the duty of the Federal Government to create a Green New Deal.” Congress.gov (07 Feb 2019).
  2. “Special Report: Global Warming of 1.5°C.” Intergovernmental Panel on Climate Change (5 Oct 2018).
  3. Foster, P., et al. “Chapter 2 – Mitigation pathways compatible with 1.5°C in the context of sustainable development – Supplementary Material.” Intergovernmental Panel on Climate Change, Table 2.A.12 (5 Oct 2018).
  4. Gustafson, A., A. Leiserowitz, and E. Maibach. “Americans are Increasingly ‘Alarmed’ About Global Warming.” Yale Program on Climate Communication (12 Feb 2019).

This talk was last updated on 05/06/21.

Question:  What does the public think about climate change and a price on carbon?

Answer:  People are getting the message that climate change is real and putting a price on carbon is a good way to address it.

Every year since 2008, two universities – Yale and George Mason – have polled public views on climate change. In March 2021, their report [1] showed that 70 percent of Americans agree global warming is happening, outnumbering those who don’t think so by 4 to 1. The percentage who attribute the warming to human activities has grown from 48 percent in 2014 to 57 percent in 2021, with only 30 percent still attributing it – incorrectly – to natural cycles.

Yale University also produces Climate Opinion Maps [2] using a statistical model to show how well people understand climate facts, risk, and policy right down to the state, county, and Congressional district level. Their latest results show a slow but steady increase in climate concerns across the country. Importantly, since 2014 the realization that most scientists are in agreement about human causation of global warming has increased from 41 to 57 percent.

On the policy side, Yale’s 2020 survey also showed that 68 percent of Americans favored a revenue-neutral plan to “require fossil fuel companies to pay a carbon tax,” with only 31 percent opposed. Even in the most fossil-dependent states, more than 55 percent supported this policy option. That matches a 2014 poll from Stanford, the New York Times, and Resources for the Future [3] which found that requiring companies to pay a greenhouse gas tax and then giving “all this tax money … to all Americans equally” was favored by 67 percent to only 31 percent opposed.

While the specific poll language and methods differ, these reports show that the public approves of a policy that imposes a price on greenhouse gas emissions and then returns all of the money to American households.

In a Nutshell: Americans are increasingly convinced that climate change is happening, it’s primarily human-caused, and most scientists agree. More than two-thirds of Americans consistently support a carbon-based tax on fossil fuel producers, including a majority in the most fossil fuel-dependent states.

  1. Leiserowitz, A., et al. “Climate Change in the American Mind.” Yale Program on Climate Change Communication & George Mason University Center for Climate Change Communication (17 Jun 2021).
  2. Marlon, J., et al. “Yale Climate Opinion Maps – U.S. 2020.” Yale Program on Climate Change Communication (2 Sep 2020).
  3. “Global Warming National Poll: Part III.” Resources for the Future (Apr 2015).

This talk was last updated on 12/28/21.

Question:  Isn’t there a conflict between religion and science over climate change?

Answer: Not according to most people of faith. Most of the world’s major faith groups and religious leaders see no conflict. In fact, they overwhelmingly acknowledge that climate change is real, the burning of fossil fuels is causing it, and we humans have a moral responsibility to correct it. Powerful statements to that effect have come from Roman Catholics [1], Episcopalians [2], Evangelical Christians [3], Presbyterians [4], Methodists [5], Muslims [6], Jews [7], Christian Orthodox [8], Hindus [9], Buddhists [10], and many others [11].

We can’t ignore the fact that some sincere people of faith disagree, especially in the U.S., where suspicion of science runs strong in some faith communities. But there are signs that this can change, as evidenced by polling on evangelical Christians’ views about global warming [12]. This change has been years in the making, based on a 2016 statement signed by 232 evangelical pastors in 44 states [3] …

Love of God, love of neighbor, and the demands of stewardship are more than enough reason for evangelical Christians to respond to the climate change problem with moral passion and concrete action.

In a Nutshell: The majority of faith traditions respect the science showing that climate change is real and caused by human activity. Christian, Muslim, Jewish, Hindu, and Buddhist organizations have all made statements pleading with national leaders to take the ethically necessary steps needed to reverse global warming.

  1. Encyclical Letter LAUDATO SI’ of the Holy Father Francis, on Care for our Common Home. Vatican Press (24 May 2015).
  2. Millard, E. “Episcopal delegates to COP26 climate conference share lessons of hope and struggle with the church.” Episcopal News Service (12 Nov 2021).
  3. “Climate Change: An Evangelical Call to Action.” Statement of the Evangelical Climate Initiative (2016).
  4. “In Support of the Energy Innovation and Carbon Dividend Act of 2019 (HR 763).” Presbyterian Mission (12 Feb 2019).
  5. The Book of Discipline of the United Methodist Church, p. 160 (2016).
  6. “Islamic Climate Change Calls for Zero Emissions Strategy.” International Institute for Sustainable Development (20 Aug 2015).
  7. “Judaism, Climate Change, and Laudato Si’.” Coalition on the Environment and Jewish Life (Aug 2015).
  8. “Message by His All-Holiness Ecumenical Patriarch Bartholomew to the United Nations Conference of the Parties (COP 24) (Poland).” (Dec 2018).
  9. Hindu Declaration on Climate Change. Oxford Center for Hindu Studies/Bhumi Project (2015).
  10. “Statement on Climate Change from the Institute of Buddhist Studies.” Buddhist Temple of San Diego (21 Oct 2019).
  11. “Climate Change Statements from World Religions.” The Forum on Religion and Ecology at Yale (accessed 20 Dec 2019).
  12. Silk, M. “Evangelicals are losing their climate skepticism.” Religion News Service (28 Apr 2021).

This talk was last updated on 12/05/21.

International

Question:  Which other countries have started pricing carbon?

Answer:  As of May 2021, there are 64 carbon pricing policies in operation and three scheduled for implementation. [1,2] These include both carbon taxes and emissions trading schemes (ETS), and cover about 22 percent of worldwide emissions.

The list of countries that already practice some method of national carbon pricing includes Argentina, Canada, Chile, China, Colombia, Denmark, the European Union (27 countries), Japan, Kazakhstan, Korea, Mexico, New Zealand, Norway, Singapore, South Africa, Sweden, the UK, and Ukraine. Other countries that are considering joining them include Brazil, Brunei, Indonesia, Pakistan, Russia, Serbia, Thailand, Turkey, and Vietnam.

The country with the biggest carbon footprint, China, started with eight regional GHG emissions trading projects in 2013, and has now launched a nationwide expansion within their electricity sector, [3] with other sectors to be integrated over time. [4]

And our neighbor Canada, where some provinces have already had carbon taxes starting with British Columbia in 2008, has now launched its federal ‘backstop’ carbon tax for provinces that haven’t enacted carbon pricing that can reduce emissions 30 percent below 2005 levels by 2030. [5]

Of all the world’s developed economies, [6] only the U.S. and Australia do not have some form of nationwide carbon pricing in place. Alternatively, if you look at the 20 biggest economies, the only other holdouts are India and a few Persian Gulf oil states. [7]

In a Nutshell: Many countries, including most of our large trading partners, have instituted some form of national carbon pricing. Of all the world’s developed economies, only Australia and the U.S. have no nationwide carbon pricing in place.

Click here for supporting graphics.

  1. “State and Trends of Carbon Pricing 2021.” Publ. World Bank Group, Washington, DC. (May 2021).
  2. Chao-Fong, L. “Russian parliament approves law to curb greenhouse gas emissions.” The Independent (02 Jun 2021).
  3. “China moves towards launch of carbon trading scheme.” Financial Times Online (19 Dec 2017).
  4. Slater, H., W. Shu, and D. De Boer. “China’s national carbon market is about to launch.” China Dialogue (29 Jan 2021).
  5. “Technical paper: federal carbon pricing backstop.” Government of Canada (5 Jan 2018).
  6. “World Economic Situation and Prospects 2021: Annex.” United Nations Department of Economic and Social Affairs (25 Jan 2021).
  7. “List of Countries by GDP (Nominal).” Wikipedia (26 Jun 2021).

This talk was last updated on 06/08/21.

Question:  Does it matter what we do if China and India keep burning fossil fuels?

Answer:  It matters a lot. China, the U.S., and India together emit half of the world’s greenhouse gases, but of those three countries, the U.S. emits the most by far per person. [1] Prior objections that China and India had not committed to reducing emissions are no longer valid, since both signed the Paris Agreement and are also taking action to address their part of the problem.

This question also presumes that policies to mitigate climate change will somehow be detrimental to the country taking those steps. This is a false premise because recent analyses show that the benefits of reducing fossil fuel emissions will outweigh the costs. [2,3,4]

China has undoubtedly taken these benefits into account when, in 2014, they launched seven regional carbon trading pilots, [5] and has now transitioned to a nationwide carbon trading system. [6] India has also made aggressive commitments to renewable energy in their power and transportation sectors. [7] In both countries, their initial motivation was largely to curtail severe air pollution, [8] but they also recognize that they are seriously vulnerable to the effects of climate change. [9,10]

This is a big challenge for countries where hundreds of millions don’t yet have electricity at all, as evidenced by China’s continued investment in coal along with renewables. [11] But since 2009, they’ve invested about $845 billion in renewables, 85 percent more than the U.S., and have really become, despite political pressure from their powerful coal sector, the world’s leading clean energy superpower. [12,13]

Some in the U.S. still question whether China and India will follow through on those commitments, but that cannot be an excuse for our own inaction. The U.S. should tackle climate change to benefit our own economy and public health and to restore our global leadership.

In a Nutshell:  Pointing fingers at China and India over carbon emissions ignores the fact that the U.S. emits far more per person than either of those countries. Furthermore, both are already enacting policies to limit their own emissions, despite having much smaller carbon footprints per capita. Maybe they are doing so because they’ve come to realize that strong climate policy will ultimately bring economic and health benefits that exceed the costs.

  1. “CO2 Emissions Per Country 2021.” World Population Review (accessed 16 Apr 2021).
  2. Allen, K. “Benefits far outweigh costs of tackling climate change, says LSE study.” The Guardian: Economics (12 Jul 2015).
  3. “Benefits of Curbing Climate Change Far Outweigh Costs.” Skeptical Science (12 Jun 2018).
  4. Howard, P. and D. Sylvan. “Gauging Economic Consensus on Climate Change.” Institute for Policy Integrity (Mar 2021).
  5. Timperley, J. “Q&A: How will China’s new carbon trading scheme work?” Carbon Brief (29 Jan 2018).
  6. Carpenter, C. “Toothless Initially, China’s New Carbon Market Could Be Fearsome.” Forbes (2 Mar 2021).
  7. Jaiswal, A. and S. Kwatra. “India Announces Stronger Climate Action.” Natural Resources Defense Council (23 Sep 2019).
  8. “China and India are home to nearly 90 per cent of cities with worst micro-pollution: Study .” The Straits Times (25 Feb 2020).
  9. Li, M. “Climate change to adversely impact grain production in China by 2030.” Int’l Food Policy Res. Inst. (13 Feb 2018).
  10. “Why India is most at risk from climate change.” World Economic Forum (21 Mar 2018).
  11. Timperley, J. “China leading on world’s clean energy investment, says report.” Carbon Brief (9 Jan 2018).
  12. Buckley, T. and S. Nicholas. “China’s Global Renewable Energy Expansion.” Institute for Energy Economic and Financial Analysis (Jan 2017).
  13. Mahapatra, S. “India Likely To Surpass 175 Gigawatts Of Renewable Energy Target By 2022, Says Minister.” CleanTechnica (27 Nov 2017).

This talk was last updated on 05/06/21.

Question:  Where does CCL stand on the Paris Agreement?

Answer:  Citizens’ Climate Lobby holds that international agreements are necessary to make meaningful progress to address climate change. The actions of any single country, by itself, will not be sufficient to address this global issue. Therefore, CCL hopes that the U.S. will continue to engage in international negotiations to reduce greenhouse gas emissions.

While the Paris Agreement [1,2] contained only voluntary reductions, CCL still views this cooperation between countries as important and meaningful and views the Paris Agreement as an important milestone that recognizes the challenge we face. CCL is heartened by the U.S. decision to rejoin this agreement ahead of the November 2021 COP26 meeting in Glasgow. We hope this will help strengthen the commitments of all nations.

It is important to also understand that while the U.S. will rejoin the Paris Agreement – a non-binding agreement which is not a treaty – we also remain a signatory to the United Nations Framework Convention on Climate Change, a treaty that was negotiated and ratified under the Administration of President George H.W. Bush in 1992. [3]

Regardless of any commitments the U.S. makes under the Paris Agreement, it is still imperative for Congress to enact effective legislation to reduce carbon pollution. Citizens’ Climate Lobby, along with many other voices both conservative and progressive proposes a solution that is both effective and equitable – a steadily-rising fee on carbon with revenue returned to households.

In particular, the Energy Innovation and Carbon Dividend Act, [4] if passed and signed into law, would not only meet, but significantly exceed the goals of the Paris Agreement.

In a Nutshell: The Paris Agreement, like all international agreements, is a necessary step to address climate change. But regardless of any commitments the U.S. makes under that agreement, it is imperative for Congress to enact effective legislation to reduce carbon pollution.

  1. “Paris Agreement.” Wikipedia (updated 11 Apr 2018).
  2. “The Paris Agreement.” United Nations Climate Change (accessed 12 Apr 2018).
  3. “United Nations Framework Convention on Climate Change.” Wikipedia (updated 8 Apr 2018).
  4. H.R.2307 – Energy Innovation and Carbon Dividend Act of 2021. Library of Congress (01 Apr 2021).

This talk was last updated on 12/05/21.

Question: Has any other national government imposed a carbon tax with dividends?

Answer:  Yes – Canada, the largest importer of American goods. [1]

It started with the Canadian province of British Columbia, which took the plunge in 2008  [2]. By 2014, as the tax went from $10 to $30 per ton of CO2, their economy grew about 12 percent — higher than the national average — while carbon emissions per person went down almost 10 percent, twice as fast as the nation as a whole. [3,4] That policy recycled the revenue in the form of cuts to personal and corporate income taxes, low-income tax credits, and a property tax reduction for northern and rural homeowners.

What about the politics? The carbon tax was proposed and championed by the center-right BC Liberal Party [5] as a more market-friendly route than the cap-and-trade plan supported by their center-left opposition party. [6] Once it was implemented, the program’s popularity grew from 50 to 60 percent, [7] and the rate is currently increasing by an additional $5 per ton of CO2 each year until 2050 emissions targets are met. [8]

Encouraged by that success and by strong public support of carbon pricing, [9] the Canadian federal government now requires the remaining provinces to either adopt a strong climate policy of their own or accept a “backstop” federal carbon tax. [10]

As of January 2023, seven of the 13 Canadian provinces and territories (more to join in July 2023) are using the federal “backstop” plan. The price in 2020 was C$30 per ton of CO2, it increased by C$10 per ton until 2022, and then increases by C$15 per ton each year until it hits C$170 per ton in 2030. [11] Ninety percent of the revenue is returned to consumers in the form of quarterly carbon tax rebates, and the Canadian Press reports that in 2021, households got, on average, 35 to 59% more in rebates than they paid in higher energy prices. [12] That’s what we like to hear!

In a Nutshell: Canada, the largest importer of American goods, has enacted a national carbon tax with household rebates for provinces that don’t already have sufficient carbon pricing of their own. Seven of their 13 jurisdictions are using that national plan which, like carbon fee and dividend plans favored by CCL, recycles most of the carbon cash back to households as per capita rebates.

  1. “Foreign Trade: Top Trading Partners – February 2021.” United States Census Bureau (Feb 2021).
  2. “Carbon Tax Act.” 2008 Legislative Session: 4th Session, 38th Parliament.
  3. “Trends in Greenhouse Gas Emissions in B.C. (1990-2014).” Environmental Reporting BC (updated Aug 2016).
  4. “B.C. to lead Canada in economic growth in 2015: BMO.” Business Vancouver (May 2015).
  5. “British Columbia Liberal Party.” Wikipedia (16 Jan 2018).
  6. “British Columbia New Democratic Party.” Wikipedia (9 Jan 2018).
  7. “Canadian Public Opinion About Climate Change.” Environics Institute, p. 6-7 (2015).
  8. “British Columbia government raises carbon tax, corporate tax rate.” Reuters Market News (Sep 2017).
  9. Chen, R. “Everything You Need To Know About A Carbon Tax—And How It Would Work In Canada.” Chatelaine (Dec 2019).
  10. “Technical paper: federal carbon pricing backstop.” Government of Canada (05 Jan 2018).
  11. “Canada proposes rising carbon price to 2030.” International Carbon Action Partnership (11 Dec 2020).
  12. Rabson, M. “Most Canadians who paid carbon price in 2021 came out ahead: report.” The Canadian Press (5 Apr 2023).

This talk was last updated on 05/04/23.

Question: Shouldn’t climate action be taken as quickly as possible?

Answer: Yes, it should! The IPCC, in their 2018 special report, urged world leaders to cut emissions to net zero by 2050, and do it as quickly as possible. [1]

It’s tempting to infer that government regulations would get that done faster than putting a price on carbon. But the evidence shows the opposite. Well-designed carbon price legislation is expected to work very quickly, [2, 3, 4] while regulatory action can be stalled for years by procedural obstacles and court challenges. [5, 6]

For example, the Clean Power Plan [7] was first announced in 2013, [8] but never took effect before being repealed in 2019. [9] Any regulation based on the Clean Air Act must give each state three years to develop an implementation plan before the EPA can then proceed to a final rule, so the entire process takes about six years. Even longer delays have plagued other environmental regulations. A rule over worker exposure to silica dust took 13 years to go into effect. [10] The process of removing neurotoxic lead from gasoline took 23 years. [11]

In contrast, private companies and their investors can change direction rapidly when they see their old business model no longer making economic sense. A 2020 report from Columbia [12] shows that a carbon price schedule similar to the Energy Innovation and Carbon Dividend Act [13] would quickly put us on a path to net zero by 2050. Moreover, carbon fees are firmly grounded in Congress’s constitutional “power to lay and collect taxes,” making it resistant to efforts to overturn it in the courts. [14]

The IPCC emphasizes the importance of strong carbon prices, whether explicit or implicit, in driving quick progress. A predictable economy-wide carbon price is a powerful – and necessary – opening move.  

In a Nutshell: Reducing emissions as quickly as possible is at least as important as hitting a final target. Economic studies show that a carbon fee and dividend plan will reduce emissions far  more quickly and with greater legal certainty than a purely regulatory approach that does not provide a price signal to the economy.

  1. Global Warming of 1.5°C. Special Report SR1.5 from the Intergovernmental Panel on Climate Change (Oct 2018).
  2. Kaufman, N., et al. “An Assessment of the Energy Innovation and Carbon Dividend Act.” Center on Global Energy Policy at Columbia University (Oct 2019).
  3. “Carbon Pricing Calculator.” Interactive tool, Resources for the Future (Aug 2020).
  4. “Energy Policy Solutions.” Interactive tool, Energy Innovation Policy & Technology LLC, V3.0.0. (19 Oct 2020).
  5. Shapiro, S. “Why does it take so long to issue a regulation?” The Hill (19 May 2015).
  6. Carlson, A., A. Keyes, B. Harris, and D. Burtraw. “Policymaking in the shadow of the Supreme Court.” Resources (27 Oct 2020).
  7. “Clean Power Plan.” Wikipedia (02 Nov 2020).
  8. “Barack Obama’s Climate Action Plan.” The Guardian (25 Jun 2013).
  9. “Repeal of the Clean Power Plan; Emissions Guidelines for Greenhouse Gas Emissions From Existing Utility Electric Generating Units; Revisions to Emission Guidelines Implementing Regulations.” Federal Register (08 Jul 2019).
  10. “Occupational Exposure to Crystalline Silica (81 FR 16285).” Office of Information and Regulatory Affairs (23 Jun 2016).
  11. “Fact Sheet - A Brief History of Octane in Gasoline: From Lead to Ethanol.” Environmental and Energy Study Institute (30 Mar 2016).
  12. Kaufman, N., et al. “A near-term to net zero alternative to the social cost of carbon for setting carbon prices.” Nature Climate Change 10 1010-1014(2020). (17 Aug 2020).
  13. ”Energy Innovation and Carbon Dividend Act – America’s Climate Solution.” energyinnovationact.org (accessed 04/15/21).
  14. Article I. Legal Information Institute (accessed 28 Nov 2020).

This talk was last updated on 10/27/21.

Question: How will the upcoming EU border adjustment affect U.S. climate policy?

Answer: One of the pillars of effective carbon pricing is a border carbon adjustment that equalizes carbon costs for domestic and foreign manufacturers. It's a system of levies on imports and refunds on exports to balance carbon pricing impacts. This not only maintains a level playing field for businesses, it also discourages companies from "off-shoring" their carbon emissions by relocating to countries that do not price carbon. [1]

As Europe’s carbon prices increase, the European Union (EU) plans to institute a Carbon Border Adjustment Mechanism (CBAM). [2] This policy, which will be phased in from 2023 to 2026, [3] will have an impact on American exporters. But if the U.S. were to enact a fee and dividend policy with a price that matched or exceeded Europe’s, American companies trading with the EU would almost certainly be able to avoid that border levy. In short, to maintain trading parity with Europe, the U.S. needs to price carbon.

Depending on how the CBAM is structured, the relative carbon efficiency of U.S. industry may also confer an inherent trade advantage compared to most of our non-EU trading partners. [4] Because of this, the U.S. would be wise to promptly enact carbon pricing, in coordination with the EU, to preserve that potential trade advantage with non-EU economies.

If the U.S. and Europe both price carbon with a border adjustment, the trading leverage of these two economic giants would pressure other nations to follow their lead. This is not just speculation; both China [5] and Russia [6] have made it clear that a one-way CBAM from the EU will be costly to them, and are adjusting their own carbon pricing ambitions accordingly. [7,8] This should be helpful in the fight to reduce global emissions.

In a Nutshell: The European Union has decided to enact a carbon border adjustment mechanism in 2023, which would put non-EU businesses at a trade disadvantage unless they enact their own carbon pricing policy that also features a similar border adjustment. This means us.

  1. Flannery, B.P. “Carbon Taxes, Trade, and Border Tax Adjustments.” Policy Brief No. 16-02. Resources for the Future (Apr 2016).
  2. Molyneux, C.G., P. Balás, and P. Mertenskötter. “Twelve Things to Know About the Upcoming EU Carbon Border Adjustment Mechanism.” Covington Global Policy Watch (16 Jun 2021).
  3. Taylor, K. “Carbon border levy should be in place no later than 2023, EU lawmakers say.” Euractiv Media Network (8 Feb 2021).
  4. Rorke, C. and G. Bertelsen. “America’s Carbon Advantage.” Climate Leadership Council (Sep 2020).
  5. Xu, M. and D. Stanway. “China says EU's planned carbon border tax violates trade principles.” Reuters (26 Jul 2021).
  6. Morgan, S. “Moscow cries foul over EU’s planned carbon border tax.” Euractiv Media Network (26 Jul 2021).
  7. Early, C. “The EU can expect heavy pushback on its carbon border tax.” China Dialogue (01 Sep 2020).

This talk was last updated on 10/17/21.

Question: What is Austria’s new Carbon Fee and Dividend (Climate Income) policy?

Answer:   In the autumn 2021, the Austrian government introduced an "eco-social tax reform” with a goal to achieve Net Zero by 2040. The main tool of this package is a national carbon fee applied on fossil fuels. The national scheme does not replace energy taxes, it’s in addition. It prices emissions outside the pre-existing EU-ETS by covering transport and buildings which accounts for a further 40% of GHG emissions.

Carbon pricing structure follows the logic of the EU Energy Taxation Directive (ETD). An “upstream” tax on production and importation. Products include: petrol, diesel, heating oil, coal, natural gas. The list could be expanded. Electricity is not subject to the policy because power plants above 20 MW of thermal output are covered by the existing EU-ETS.

Initially it will follow the following price path: €30 in 2022; €35 in 2023; €45 in 2024; and €55 in 2025. In 2026 it will align with the EU wide policy. This might become a market with allowances, like the EU-ETS, or may be allowed to continue as it meets acceptable criteria. This will likely be defined in 2025.

The Income (Dividend) is called “Klimabonus". It has a great website for public explanation that directly promotes the financial benefit of choosing “climate friendly behavior”. It is paid to all residents in Austria and rebates 100% of the carbon tax. In 2022 this is an equal payment of €500 per adult and €250 per child, and includes a 2022 anti-inflation payment of €250. In 2023 regional access to public transport will be factored in. The bonus will increase as the carbon tax revenue increases.

There are some compensations for Industry covering: Agriculture and forestry; sectors exposed to carbon leakage can get partial refunds; especially energy intensive industries identified in the EU as “at risk”; also particular “hardship” cases can be made.

There are a set of related policy and tax changes to help with the transition that include:

  • Lowering of labor taxes.
  • Reduced burden on families with children.
  • Reducing Corporate Income Tax in 2024.
  • Reduced Tax for ecological measures for Corporations from 2023
  • Home heating and insulation tax benefits.
  • Home produced electricity tax benefits.
  • All public transport in Austria with a single KlimaTicket.

The Austrian Klimabonus (Climate Income) is a model policy for other EU Member States to copy under the EU Green Deal (Fit for 55 legislation).The Austrian government made it clear that every euro taken from the national ETS will be given back to the citizens through the Klimabonus. This makes sure that the increase in price by national ETS is sustainable for the population.

The Klimabonus is given to all citizens resident in Austria. Adults receive a full part, while children under 18 receive a half-part. The Klimabonus is distributed yearly, through bank transfer or physical cheque for those who don’t have a bank.

People living in rural areas use their car more and have a bigger house to heat up. To compensate for this reality, the Klimabonus will be varied to take account of geographical criterias. Two criterias are taken into account: the urban density (how far do I have to travel to go to the supermarket or the children's school) and access to public transport (e.g. train or bus availability). The increase in the Klimabonus goes from +33%, +66% to +100%. A family living in a rural area can have up to twice the basic amount.

The Klimabonus was distributed for the first time in 2022. Exceptionally, the amount of the Klimabonus was brought up at 250€, and was complemented by a 250€ anti-inflation payment. Starting 2023, the amount of the Klimabonus depends mechanically on what has been paid through the national price increase. The estimates are around 100€ per adult per year. In 2023, an urban family of four is expected to receive 300€, and the same family in the countryside up to 600€. As the carbon price will progressively rise, the annual amount of Klimabonus will rise mechanically.

The Klimabonus is a smart way to make the national Carbon Price sustainable. Recycling the money throughout the Klimabonus guarantees the transparency and the sustainability of the system. Moreover, the Klimabonus is increased for people living in rural areas, which makes the measure more fair.

In A Nutshell:   The Austrian Klimabonus program is a strong and repeatable example of Climate Income (CF&D). Every euro spent though the national ETS is given back to the citizens of Austria with the Klimabonus. It is paid yearly by bank transfer, and will be increased for families living in rural areas to take into account the inequalities in how they can change their habits. Klimabonus is transparent, simple and fair.

1 Public facing government website
2 Ministry of Finance blog article
3 Anti inflation payment in 2022
4 Regional access to public transport
5 The Federal law

This talk was written by our Citizens' Climate International leaders and last updated on 12/17/22.