Chapter 6: Cap and dividend: carbon revenue as common wealth
This chapter explores the economics of a cap-and-dividend strategy for reducing emissions of carbon dioxide – the principal greenhouse gas – in the United States. It does so by analysing the Carbon Limits and Energy for America’s Renewal (CLEAR) Act, a bill introduced by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) in December 2009, that would have capped the nation’s carbon emissions, auctioned the permits by which the cap is implemented and recycled most of the revenue directly to the American people in the form of equal dividends paid to every woman, man and child. After the American Clean Energy and Security Act – the bill that was backed by the Democratic leadership – failed to clear the Senate in the summer of 2010, climate policy slipped off the nation’s political agenda. But climate change will not go away. When Congress musters the political will to tackle the issue again, the CLEAR Act or something like it could re-emerge. The CLEAR Act aims to safeguard the Earth’s climate while at the same time protecting the economic security of American families. The Act seeks to protect the climate by capping the use of fossil fuels. The cap would tighten over time, reducing US carbon emissions to only 20 percent of current levels by 2050. At the same time, the Act seeks to protect family incomes by recycling three-quarters of the revenues from the sale of carbon permits directly to the public, and by devoting the remaining onequarter to job-creating investments in the clean energy transition.
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