Fast Facts on Carbon Fee and Dividend

Q. How much would it raise the price of gas at the pump?

A: a $15 fee per ton of CO2 would add $0.13 per gallon; a $30 fee would add $0.261.

Q. How much would people get back from your carbon fee?

A. If a $15 fee per ton of CO2 were to be collected in 2012, it would raise $81.3 billion. Dividing by an estimated 316.3 million Americans in 2012, $257 would be returned to each individual. In 10 years, that number would be $1,391 back per individual1.

Q. What do the poorest spend on carbon?

A. The poorest 20% of Americans account for only 9% of carbon consumption, while the richest 20% account for 32%. Doing the math, with our proposal the poorest 20% would get back $141 more than they paid in the first year; more than double their costs due to the fee2.

Q. What's the difference between the state hardest hit by the fee and the least affected state?

A. A Resources for the Future report assuming a $20.87 price per metric ton of CO2 ($18.92 per US ton1) found that average households in the Northeast (including CT, ME, MA, NH, RI) would be the hardest hit losing $234 in consumer surplus while Texas would be least affected losing only $3 per year. The national average was an $86 loss of consumer surplus. However, returning dividends evenly still resulted in consumer surplus gains for the poorest 20% even in the Northeast3.

Q. What would the hardest-hit industries be, and how much would the price of their products rise?

A. Coal, oil and gas would be the hardest hit, but that's the point. The next-hardest hit industry would be air transportation, with industry price rises of 1.8% (2.2% for consumers) in the first year4.

Q. What percentage of American families would break even or end up ahead with your carbon tax?

A. Two thirds of American families would break even or end up ahead with our bill5. 

Q. Do renewables really create more jobs than traditional fossil fuels?

A. As early as 2008 the wind sector already employed more people than the coal mining industry6 even though in 2009 coal accounted for 44.5% of electicity generation while wind produced only 1.9%7.  The coal mining industry maintains 82,595 jobs nationwide, while the wider coal industry supports 174,000 permanent jobs nationwide8.

Q. Will this renewable job advantage continue once the initial construction phase is over?

A.  If wind makes up 20% of national domestic energy needs by 2030, conservative estimates are that over 500,000 jobs would be generated and “supported”8.  The entire renewable energy and energy efficiency sectors combined could sustain over 37 million jobs by 20308. 

Q. Why should we move on this if China isn't? 

A: China is moving. In 2009 China committed $34.6 billion to clean energy investment compared to $18.6 billion in the US. Roughly 4% of generating capacity in both the US and China  comes from renewables, but with twice the new investment in clean energy, China is on track to be the world leader in clean energy investment, manufacturing, and installed capacity, within one to two years8.

 

References

  1. Charles Komanoff. “4-sector National Carbon Tax Model.” The Carbon Tax Center, 2011. URL: http://www.komanoff.net/fossil/CTC_Carbon_Tax_Model.xls
  2. “Managing Impacts.” The Carbon Tax Center, 2010. URL: http://www.carbontax.org/issues/softening-the-impact-of-carbon-taxes/ Last accessed: 2/14/11.
  3. Burtraw, Dallas; Sweeney, Richard; Walls, Margaret. “The Incidence of U.S. Climate Policy: Alternative Uses of Revenues from a Cap-and-Trade Auction.” Resources for the Future, 2009. URL: http://www.rff.org/RFF/Documents/RFF-DP-09-17.pdf
  4. Gilbert E. Metcalf. "Green Employment Tax Swap: Using a Carbon Tax to Finance Payroll Tax Relief" The Brookings Institution and the World Resources Institute, 2007. URL: http://www.wri.org/publication/green-employment-tax-swap
  5. Boyce, James K; Riddle, Matthew E.  “Clear Economics: State-Level Impacts of the Carbon Limits and Energy for America's Renewal Act on Family Incomes and Jobs.” Political Economy Research Institute, 2010. URL: http://www.peri.umass.edu/fileadmin/pdf/other_publication_types/green_ec... CLEAR_Economics.pdf
  6. Eoin O'Carroll. “Does wind power really provide more jobs than coal?” The Christian Science Monitor, January, 2009. URL: http://www.csmonitor.com/Environment/Bright-Green/2009/0131/does-wind-po...
  7.  “Electric Power Industry 2009: Year in Review”. The US Energy Information Administration. Report revised Jan. 4 2011. URL: http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html
  8. http://www.census.gov/population/www/pop-profile/files/dynamic/PopDistribution.pdfJoseph Robertson. “Building a Green Economy”. The Citizens Climate Lobby, 2010. URL: http://citizensclimatelobby.org/node/457 
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