California Climate Bill Should Give Cash to Consumers

A state panel recommended that most of the proceeds from a proposed carbon tax in California, set to take effect in 2012, should be given back to consumers. The 16-member Economic and Allocation Advisory Committee, charged with figuring out the most cost-effective way to implement a tax on carbon emissions, threw its support behind a so-called “cap-and-dividend” approach.

Such a plan would set a steadily decreasing limit on CO2 releases by major emitters, place a price on carbon dioxide emissions, and then give most of the revenue back to citizens.

The panel said that “cap-and-dividend” would cushion the cost to consumers of higher energy prices, create some political support for a carbon tax, and reward consumers who reduced energy use. Annual energy dividend checks for a family of four could reach $1,000.

As federal climate legislation increasingly appears to be stalled in Congress, some states, most notably California and a consortium of northeastern states, are moving ahead with programs to cap and place a price on carbon emissions.

Article appearing courtesy of Yale Environment 360

photo: J. Stephen Conn

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One comment on “California Climate Bill Should Give Cash to Consumers

I don’t know how I feel about this. My mom is a teacher in CA and just got an e-mail from her principal that due to state budgetary concerns, they are cutting school funding by over $200 per student. At her tiny mountain school, that will be a loss of around $100,000 for the year. They are already struggling to make ends meet.

I know states have to balance their budgets, and I know cuts have to happen somewhere. But in a state where funding is being cut right and left, state employee salaries are being cut (or borrowed from), this is hard to see. And yes, from the policy side it makes sense – protecting consumers (particularly low income and fixed income consumers) from energy cost increases and making a carbon cap politically viable. But still… ouch.

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