How to Cut Emissions Without Wrecking the Economy

The Wall Street Journal

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Our plan, unlike many of the aspirational proposals floating around these days, is grounded in concrete modeling. It’s also backed up by an Emissions Assurance Mechanism, which specifies that the carbon fee will temporarily increase faster if agreed-upon emissions reduction targets are not achieved.

Second, the vast majority of Americans will be economic winners under our plan. According to the U.S. Treasury, 70% of American families—including the most vulnerable—would come out ahead, receiving more in carbon dividends than they pay in increased energy costs. A family of four would receive approximately $2,000 a year in carbon dividends, an amount that will grow over time as the carbon fee increases. And the more you shrink your carbon footprint, the more you come out ahead. This aligns—for the first time—the economic interests of American families with climate progress.

Third, our plan’s environmental and social ambition is matched by equally strong pro-business and pro-competitiveness provisions.

For starters, our bipartisan plan is revenue-neutral and won’t increase the size of the federal government. Unlike many climate plans, which require large increases in taxes, deficits or both, ours will “finance” the transition to a low-carbon future by incentivizing individual and corporate behavior and by leveraging the extensive resources of the private sector. It will also spur American innovation and let the market decide on the best low-carbon technologies and energy sources.

Enacting the most ambitious carbon price of any leading emitting nation will render many current and future carbon regulations unnecessary. In the majority of cases where a carbon fee offers a more cost-effective solution, the fee will replace regulations. For example, all current and future federal stationary-sources carbon regulations will be displaced or pre-empted. This offers businesses the predictability and flexibility they need to innovate and make long-term investments in a low-carbon future.

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Our carbon-dividends plan demonstrates that economic dynamism, environmental stewardship and social well-being are mutually compatible and need not be traded off against one another. It should serve as the basis for a much-needed bipartisan climate breakthrough.

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