Fresno writer outlines plan to reverse climate change and halt its bad impacts

The vast majority of Americans, no matter their party affiliation, are worried about climate change. We want our government to take action to cut greenhouse gas emissions without damaging our livelihoods, our access to goods and services, and our ability to get from point A to point B.

How can we do this quickly enough to hit the net zero emissions goal for 2050? It is clear to me that national legislation is the key to effectively tackling climate change in time to avoid the worst consequences of the changing climate.

As a former bank regulator, I know how difficult it is to establish regulations that “get it right.” This is one reason that I agree with most economists who have concluded that a market-based approach, rather than a regulatory approach, is the most effective way to transition the economy away from fossil fuels to clean energy. And of the market-based options that have been proposed, I am convinced that what we need is a form of carbon pricing called Carbon Fee and Dividend.

Carbon Fee and Dividend, as envisioned in The Energy Innovation and Carbon Dividend Act (HR 2307), would be more effective overall in addressing our reliance on fossil fuels. It would be far simpler and cheaper to implement than regulatory approaches, and it would be more fair to all U.S. residents. By setting a gradually rising fee on each ton of CO2 produced, companies will have a powerful incentive to innovate ways to emit less carbon.

While any carbon pricing system would increase energy costs for U.S. residents, it is the “dividend” part of the measure that would ensure that lower-income residents especially do not suffer financially as a result. Projections show that the dividend amounts would more than cover the higher energy costs of almost all lower-income residents.

This “carbon cash-back” would be distributed using a system similar to disbursement that we’ve already experienced with pandemic stimulus checks or IRS refunds. Each household can spend the money any way it wants and needs. Scientific models such as a 2019 study from Columbia University’s Center on Global Energy Policy https://www.energypolicy.columbia.edu/research/report/assessment-energy-innovation-and-carbon-dividend-ac show that the Energy Innovation Act would actually help create jobs and grow our economy, which should benefit everyone.

Beyond those reasons for action here at home, we’re under pressure from other countries that are already pricing carbon. The European Union announced it will impose a carbon border tax, beginning in 2023, on imports from nations that do not have an equivalent carbon price. When this goes into effect, American exporters will be subject to the European carbon tax, placing them at a competitive disadvantage. If the U.S. implements its own carbon price and carbon border adjustment (which is part of the Energy Innovation Act) the policy can keep American businesses competitive, and it will motivate more nations to price carbon themselves.

Credible projections estimate that the Energy Innovation Act would begin to yield meaningful emissions reductions in as little as nine months. In fact, it is expected we would decrease our carbon emissions by 50% in just 10 years following implementation of the act. The Energy Innovation and Carbon Dividend Act would quickly help create a fair and just transition to cleaner energy and a better future for our Valley and beyond.