The earth is round, it rotates
on its axis, it revolves around the sun, it is getting warmer as a result of
humans burning fossil fuels, and if we don’t change course the results will
range from catastrophic to apocalyptic. This is settled science that can be
demonstrated with a 5th grade experiment[1], and is shown to be
reliably predictable by advances in computer modeling[2]. We are well past the
point of defending the science of climate change and it is past time to implement
solutions.
Responding to an Op-Ed piece
that appeared in the Providence Journal (“Fight, Harvard, against global
warming” 11/8/2014) I wrote the following response which encapsulates a
solution I have been working on as a member of a group referenced below.
Charles Miller is troubled by
the fact that his alma mater, Harvard, won’t divest itself of its investments
in the fossil fuel industry. While I share his concern over global
warming, I think his targets—both Harvard and the fossil fuel industry—are
misplaced. Companies like ExxonMobil, Arch Coal, and Chesapeake Energy merely
take the carbon out of the ground, but it’s we the people who cause global
warming by putting that carbon into our atmosphere. To solve this fundamental
problem we must find a way to wean all of us off fossil fuels. There are all
sorts of smaller steps we can take to get there, but the urgent fact is we need
to start taking bigger ones.
The enormity of the global
warming crisis demands common-sense market-based solutions that shift the
market itself without critically damaging our economy. Too often we see the
path towards independence from fossil fuels and the road to economic prosperity
as inevitably divergent. Fortunately, they don’t have to be. Enacting a
revenue-neutral carbon fee and a flat-rate dividend program is a
market-friendly approach that would help us change course on fossil fuels
without placing undo economic burden on consumers.
A carbon fee works by placing
a charge of $15 per ton on carbon at its source. Though the fee is charged to
the fossil fuel industry, of course this cost is passed directly on to
consumers. To mitigate this added cost, 100% of the collected fees would be
rebated back to consumers at a flat rate. In the first year, for example, the
fee would generate roughly $81 billion dollars in revenue, and each American
could expect an annual dividend of $250. The carbon fee would increase by $10
per ton every year until carbon mitigation targets are met. Therefore, both the
amount of the fee and the dividend would grow annually; at the end of 20 years
the expected annual dividend paid out to each American would be approximately
$1600.
While every individual
receives the same dividend, it’s you—the consumer—who determines how much in
fees you actually pay out. The dividend is essentially a refund check for the
average American consumer’s carbon fee. If you are an above-average consumer of
fossil fuels, the $250 only offsets part of your total fees. If you are average
in your consumption, you break even. If you are below average in your
consumption, you come out ahead. As a result, everyone has an incentive to
reduce their carbon footprints, not out of the goodness of their hearts but out
of goodness to their wallets.
Citizens Climate Lobby (CCL)
has been promoting just such legislation since 2007. We recently
commissioned a non-partisan firm, Regional Economic Models Inc., to evaluate
our proposed legislation to determine the comprehensive economic impact of such
a plan. Regional Economic Models took the CCL’s model legislation and carried
it out over a 20-year period, evaluating its economic, environmental, and
social impact compared to a business-as-usual model.
The study found that enacting
a carbon fee and flat-rate dividend program would lead to positive effects on
GDP throughout the entire span of the study. In particular, for every year
of the study, personal income and job growth was projected to outpace the
business-as-usual model. At the 10-year mark, an estimated 2 million new jobs
would be created, and 2.8 million new jobs were forecast by the 20-year-mark.
Meanwhile, the study projected a 33% decrease in carbon emissions at 10 years,
and a 52% decrease in emissions at 20 years compared to a relatively flat
business-as-usual baseline.
If we take this step toward
comprehensively divesting ourselves of fossil fuels in a gradual, steady, and
predictable manner, we can take truly consequential steps towards developing
cleaner energy sources without throwing our economy into a
tailspin. Carbon fees paired with a flat-rate dividend program will create
predictable markets for clean, renewable energy and shrink market share for
fossil fuels. As that happens, the issue of divestiture in the fossil fuel
industry will solve itself.
++++++++++++++++++++++++++++
One final note, if we want
America to continue to be great leaving our head in the sands over climate
change is the last thing we should be doing.
To begin with the entire world understands that climate change is taking
place as witnessed by the fact that every nation on earth signed the Paris
Climate Accords except Syria (who tragically are otherwise occupied) and they
are looking for solutions. America has
always been at the forefront of new technologies (think automobiles, airplanes,
computers) and that has served us well.
We want to be at the forefront not playing catch up.
Furthermore, remaking our entire
energy infrastructure based on clean domestically produced energy sources would
be a massive job creator for decades to come.
