Tax-and-Dividend
We've written a bit about cap-and-dividend: it's a variety of cap and trade in which 100 percent of the program's revenue is returned on a per capita basis. It has the pretty terrific effect of simultaneously limiting carbon and advancing equity. Like a climate version of the Alaska Permanent Fund Dividend, it would give people a stake in the program's success.
Now it appears that there's a tax-and-dividend movement gaining steam. As Andrew Revkin points out in the NY Times environment blog, conservative columnist John Tierney and ur-climate scientist James Hansen are both proposing carbon taxes with a full rebate from the proceeds. They're in the company of researchers at the RAND corporation. In the Northwest, the conservative Washington Policy Center has made a similar proposal (a small carbon tax that would offset the state sales tax). And of course, the best example of a tax-and-dividend-esque policy is British Columbia's new carbon tax shift.
Here's Hansen:
The worst thing about the present inadequate political approach is that it will generate public backlash. Taxes will increase, with no apparent benefit. The reaction would likely delay effective emission reductions, so as to practically guarantee that climate would pass tipping points with devastating consequences for nature and humanity.
Carbon tax and 100% dividend, on the contrary, will be a breath of fresh air, a boon and boom for the economy. The tax is progressive, the poorest benefiting most, with profligate energy users forced to pay for their excesses. Incidentally, it will yield strong incentive for aliens to become legal; otherwise they receive no dividend while paying the same carbon tax rate as everyone.
Who knows? If thinking like this becomes more prevalent, carbon taxes could become politically viable after all.
