Carbon dividend act could bridge divide on climate action

Published 4:56 pm Wednesday, October 30, 2019


Contributing columnist

Nearly 70% of Americans, including a majority of Republicans, want the U.S. to take “aggressive” action to combat climate change, according to a recent Reuters survey. Only a third, however, would support an extra tax of $100 a year to help. Higher power bills and gas taxes are also not what most people have in mind to meet the challenge.

Email newsletter signup

According to a Washington Post/Kaiser Family Foundation survey, only 37% can see climate action requiring a major sacrifice while 48% could see a minor sacrifice. (14% think not much sacrifice is needed.)

As Centre College economist David Anderson sees it, people want less pain to achieve crucial gains on the climate change challenge. Using cost/benefit analysis, he proposes that the Energy Innovation and Carbon Dividend Act (H.R. 763) may be the best option available in the current debate.

Is that pain/gain balance what could sell it in Congress?

And can its bipartisan sponsorship and support overcome the present disconnect between the current administration’s freezing of fuel efficiency standards and rollback of Obama coal-fired power plant regulations by the EPA, on the one hand, and the pledge of 16 Democratic presidential candidates to end the fossil fuel economy within a decade on the other?

The Republican National Committee has stated that these latter proposals amount to a gift of the next election to President Trump.

Support for aggressive climate action among moderate/liberal Republicans is up 15% since May 2017, but there is a glaring partisan divide concerning the urgency of the crisis. According to a recent survey by the Public Religion Research Institute, 72% of Democrats, second only to health care at 77%, regard climate change as a critical issue while a majority of Republicans label only terrorism, immigration and crime as critical issues from a list of 12. Can this bipartisan Energy Innovation and Carbon Dividend Act both ease the pain and bridge the divide?

As its sponsors and supporters see it, the Energy Innovation and Carbon Dividend Act is the best first step to drive down carbon pollution and bring climate change under control. The carbon tax or fee at the point of extraction would make oil companies absorb more of the cost of greenhouse gas emissions and create incentives to energy innovation. Market forces would make it cost effective to move to cleaner energy sources.

Some opponents of climate change action resist any tax on the fossil industry because of its effect on prices for consumers and its effect on economic growth. It is noteworthy that Exxon Mobil is facing several lawsuits (as are several other oil and gas companies) for misleading its stockholders and the public for decades about the risks that climate change poses to the value of its oil and gas assets.

Exxon’s internal memos, dating back to the 1970s, predicted that the effects of fossil fuel emissions could be “catastrophic for at least a substantial fraction of the world’s population.”  The company not only failed to warn the public; it spent over $30 million on climate-denying think tanks and research to confuse the public. It is still planning to increase its oil output by 25 percent by 2050 when the world should be sharply reducing its greenhouse gas emissions.

In the words of Lee Wasserman, director of the Rockefeller Family Fund, in “Exxon’s Climate Change Deceit,” New York Times, October 23, 2019, oil companies should have “to assume a greater portion of the costs they have foisted on taxpayers.”

With our EIACD Act, some regulations would continue, but the carbon fee at the point of extraction would start low and grow over time, which is a break for oil companies.  The EPA authority to regulate CO2 and other emissions covered by the fee would be “paused” for the first 10 years under the policy. If emission targets are not being met after 10 years, Congress would give direction to the EPA to regulate emissions to meet the targets.

The proceeds from the fee would be distributed to all legal residents in the form of a monthly dividend.  If the average American paid $20 more in energy costs, for example, that person would see that cost more than offset by dividends. Heavy users would pay more than $20, but their dividend checks would offset a major part of their monthly cost.

This proposal would cut greenhouse gas emissions by 40 percent in 12 years and by 90% by 2050. The dividend would amount to as much as $4,000 a year for a Kentucky family, which would enhance their participation in the economy and cause job creation as a ripple effect. (An estimated 2.1 million new jobs would be created nationally.) The fee and dividend plan is already working in Canada.

Using a cost/benefit calculus, can skeptics be convinced that this plan makes the necessary major inroads on the climate change challenge, while offering more pain relief than more radical proposals?

Some religious organizations, environmental groups, and even fossil fuel companies are convinced.  They are speaking out in favor of this legislation as a very promising first-step toward addressing a threat that threatens not only future generations but also our own.

The Citizens Climate Lobby is a national movement that is forming advocacy groups in communities across the country, including Boyle Country. Its aim is to educate citizens about this bipartisan, market-driven, innovation-stimulating proposal; to communicate with elected representatives about the merits of the proposal; and to encourage members of civic, religious, business and environmental organizations to get institutional endorsements of the bill as the best option available to bridge the partisan divide and reckon with the challenge we face.

If the opponents of more radical governmental action on climate change can be convinced that an effective, less-painful solution is available, they might then be more willing to  admit that climate change does indeed pose an existential threat, not only for the future but now. For more information, visit


Eric Mount is the Nelson D. and Mary McDowell Rodes Professor Emeritus of Religion at Centre College.