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.
photo: J. Stephen Conn