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NYC Conservative Climate Activists Message Board › Carbon Fee & Dividend

Carbon Fee & Dividend

user 2341848
Group Organizer
New York, NY
Post #: 291
A bill very much along the lines of a carbon fee and dividend has been sponsored in congress: https://energyinnovat...­

Approaches to a Carbon Fee

The prevailing consensus among economists is that that the best way to reduce carbon emissions is to impose a tax or fee on them, and allow the market to decide how emissions should be reduced. The beauty of a carbon fee, for those of us who believe that politicians foul up nearly everything they touch, is that there is just one piece of legislation that they have to get right, and most of the decisions involved wind up being more efficient and intelligent market decisions.

An added bonus for conservatives is that we could eventually roll back detailed regulation, such as having the government dictate such things as byzantine details about how cars have to be built and what sort of light bulbs everybody has to buy, because the financial incentives will automatically drive the most ecologically benign behavior.

There are different approaches to how the revenues from this fee should be spent.

Liberal Approach

Impose a fee on carbon, and just use the revenue for deficit reduction and to fund carbon-saving activity such as public transport. Some go so far as to say that some of the money should go to ends completely unrelated to climate change, just a laundry list of things the left would spend a windfall on.


The right will never, ever buy into this, because it grows the government. And with the advent of Uber-type transport based on self-driving cars, it's not clear that traditional public transport will be the most desirable way to organize our cities.

Common Conservative Approach

Impose a fee on carbon, and have the government return all the money to the public in tax cuts, thus avoiding growth of the public sector. Revenue Neutral.


  • Ideally, it should be a federal carbon free, and there is no federal sales tax, so it can't be returned in a sales tax cut.
  • The bottom 50% of the population pay almost no income tax, so they would get practically no tax relief, yet they would face higher energy costs without any help meeting those costs. So this effort would be a massive redistribution of wealth from the poor to the rich, which the left would never go along with. And it is just generally politically infeasible to impose a scheme which would have such a major negative impact on such a large share of the voters.

Carbon Fee and Dividend

Impose a fee on carbon, and have the government return the money equally to everybody in the form of a monthly dividend immediately, before the politicians can get their grubby fingers on it. Revenue neutral.


Unlawful residents would be negatively impacted, since they would face higher energy costs yet not receive the dividend. However, by the same argument, social security, medicare, medicaid, and unemployment insurance should all be discontinued, since unlawful residents pay taxes that support those programs and don't receive the benefits. It is just generally really hard to run any kind of decent society without negatively impacting unlawful residents. That's just a basic, unavoidable fact of reality. We have a planet to save, some toes may have to be stepped upon.

Some Details

However we do a carbon fee:

  • The carbon fee should be imposed at the wellhead, or when fuel is imported.
  • The dividend payments should be frequent, perhaps monthly, because poor people who really need the dividend to make ends meet in the face of higher energy costs often can't wait a year for the help.
  • The fee should also be imposed on gases released into the atmosphere as a side effect of production, and it shouldn't just be a simple fee on carbon, since some chemicals are more potent greenhouse gases. So a severe fee should be imposed on methane that is leaked into the atmosphere without being burned in natural gas drilling, since methane is much more potent than CO2 as a green house gas. A straight carbon fee should be imposed on methane that is flared, creating CO2.
  • We might want to impose a tax by the pound on livestock, imposed at the slaughterhouse, or on milk, since livestock flatulence contains a very significant amount of methane. Ideally, the tax should vary with the breed of livestock, to give farmers an incentive to breed or genetically engineer livestock with lower methane emissions. A fee on livestock will also give consumers an incentive to switch to lower-emission meat species or even to tofu or to emerging artificial plant-based meat substitutes.
  • Apparently, feeding seaweed to livestock reduces their methane emissions, so perhaps an incentive to do that can be included in some way.
  • Duties should be imposed on goods imported from countries that aren't imposing similar carbon fees, to protect American producers from unfair competition from goods imported from countries that don't have such fees. This gives other countries an incentive to impose their own carbon fees, so they get the money rather than our government getting the money. This avoids the need for grandiose international treaties that are nearly impossible to get together and harder than impossible to enforce.

Citizen's Climate Lobby On Their Carbon Fee & Dividend Plan

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