Issues Of The Environment: A Carbon-Fee Plan To Address The Climate Crisis

Apr 7, 2021

Lisa Del Buono, founder of Michigan Clinicians for Climate Action
Credit Michigan Clinicians for Climate Action / states.ms2ch.org/mi/micca

We know, with certainty, the climate crisis is negatively impacting our environment.  It is also having adverse affects on pubic health, particularly in communities of color and among low-income familes.  Dr. Lisa Del Buono is the founder of Michigan Clinicians for Climate Action.  She joined WEMU's David Fair to discuss her organization's advocacy of a carbon-fee plan to comprehensively address the issues. 


Citizens' Climate Lobby Summary of Carbon Fee and Dividend Policies (3/25/21)

Basic overview of carbon fee and dividend (CFD) - 3 components:

  1. Carbon Fee:  holds polluters accountable - applied as far upstream as possible on ALL fossil fuel companies; starts low and goes high; reduces emissions and reduces air pollution throughout the country:
    • Estimated reduction in air pollution:  One study projects that in just 10 years sulfur dioxide (SO2) and mercury emissions from the power sector will reduce by more than 95% and emissions of oxides of nitrogen (NOx) by about 75% relative to a current policy scenario. Coal plants are nearly eliminated in 10 years.

Note - air pollutants like PM2.5 and ozone are derived from NOX and SOX in combination with other pollutants (PM2.5) and sunlight (ozone) and are responsible for a large array of health impacts suffered by frontline communities.

In contrast to greenhouse gases which take decades to dissipate from the atmosphere, air pollutants fall out of the atmosphere rapidly, leading to immediate health benefits, especially in frontline communities.

  • Estimated reduction in greenhouse gas emissions: on pace to reach net-zero by 2050
  • Need to be sure that the fee goes high enough to lower emissions sufficiently to phase out fossil fuels as a primary energy source..

Fees that start low minimize the impact to the economy, but they need to rise high enough to ensure that emissions are reduced sufficiently to avoid the worst impacts of climate change.

 

  1. Dividend: Revenues generated from the fee are large. Below is a diagram depicting different proposed uses of the revenues in various bills:

 

If 100% of net revenues are returned equally to citizens this translates into an annual dividend for eligible adults of $250-$260 in 2020 and $1,410-$1,470 in 2030, with half paid to eligible children.

Household Impact Study for - District 13 (specific to EICDA) provides:

  • A comparison of costs likely to rise due to pass through of carbon fee to average households vs. dividend after taxes.
  • Quintiles ranked by household consumption

 

  • Panetta/Coons & Durbin bills (see above) use only 70-75% to return to lower income families and use the other 25-30% for infrastructure mitigation, etc. Returning revenues with means testing like in the Panetta/Coons and Durbin bills would likely also be progressive and possibly allow leftover revenues to be utilized in ways that could be targeted towards frontline communities[2] [3] :   Consider soliciting ideas from frontline communities for the best use of these funds.

 

  1. Border Carbon Adjustment: Tariffs are placed on high-energy goods when trading with countries that do not have an equivalent price on carbon, which creates an incentive for other countries to place an equivalent price on carbon and ensures that vulnerable communities abroad are also protected.

CFD vs. Cap & Trade:

  • CFD described below does not allow for secondary carbon markets or offsets which leave marginalized communities vulnerable to polluters who “trade” on these secondary markets.
  • The fee is applied to ALL fossil fuel companies as the gas, oil, or coal comes out of the ground or into the country.  Also applies to other GHG’s like F-gases.
    • Note: EICDA has exemptions for agriculture & military.
  • In contrast to Cap and Trade policies, a fee remains strong and effective even when important complementary regulations that protect frontline communities are instituted. (e.g. CAFE rule, methane abatement rules, and regulations for local air pollutants.)

 

Bills in play in the last Congress (see table below):

Resources for the Future comparison of carbon pricing policies: here

Columbia Center for Global Energy Policies: here

Friends Committee on National Legislation: here

Additional Resources:

Michigan Clinicians for Climate Action

Citizens' Climate Lobby

Health and Economic Benefits of a 2ºC Climate Policy: Testimony to the House Committee on Oversight and Reform Hearing on “The Devastating Impacts of Climate Change on Health” Aug 5, 2020

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— David Fair is the WEMU News Director and host of Morning Edition on WEMU.  You can contact David at 734.487.3363, on twitter @DavidFairWEMU, or email him at dfair@emich.edu