Pirate's Cove

This really isn’t anything new, it’s just being repackaged in a way to make Americans say “free money? Cool!”

Let’s pay every American to reduce emissions

As alarm over climate change rises, the idea of a “Green New Deal” is growing in popularity, including among candidates for the Democratic presidential nomination. But most of the candidates have been notably skittish about discussing a price on carbon, the climate policy widely advocated by economists as the best way to encourage the investment, innovation, and infrastructure needed for a transition to clean energy.

That’s because there is one big problem with putting a price on carbon: It will raise the prices of gasoline, electricity and everything else that’s made or distributed using fossil fuels. The impact on household budgets will be highly visible, especially if the price is steep enough to make a significant dent in the country’s carbon emissions. Critics rightly note that consumers will be unhappy. And unhappy consumers make for unwilling politicians.

(snip through the old ideas of straight carbon tax schemes)

But there’s another idea that offers a solution to the carbon price conundrum — a carbon dividend that gets sent back to taxpayers.

A version of such a dividend is already in place in Alaska, and to grasp how carbon dividends would work, it’s worth recalling its history. The idea originated with an ex-Marine pilot by the name of Jay Hammond who settled after World War II in a small Alaskan community on the windswept coast of the Bering Sea, the world’s richest fishing grounds for sockeye salmon. There he was struck by the stark contrast between the offshore wealth scooped up by commercial fishing fleets and the onshore poverty of local residents, who lived without basic amenities such as indoor plumbing, electricity, phone service or a high school. The fishery was a natural asset that rightly belonged to the community, Hammond thought, so why shouldn’t benefits from its use accrue to everyone?

When Hammond was elected to the state Legislature in the 1960s, he proposed a remedy: let local governments collect a tax on the fish harvested in their waters and use this money to pay cash dividends to local residents. This would lift local incomes, and thereby strengthen the local tax base, too, yielding more revenue for public goods and services. His effort faltered, but when Hammond was elected Alaska’s governor in 1974 he applied the same logic to an even bigger natural asset: the newly discovered oil on Alaska’s North Slope and extended it statewide. This time he succeeded.

There’s one hell of a difference between the carbon dividend scheme and what became the Alaskan Permanent Fund: taxing the fish (and now oil) didn’t artificially skyrocket the cost of living for citizens nor take money out of their pockets, or leave them dependent on “refunds” from government for the money that government already cost them.

Carbon dividends apply the same idea to parking fossil carbon in the atmosphere. Everyone who consumes less-than-average amounts of carbon comes out ahead, receiving more in dividends than they pay in higher prices. This includes the vast majority of low-income households, since they consume less-than-average amounts of just about everything, including fossil fuels. Most middle-class households break even or come out a bit ahead. Upper-income households, especially the “one-percenters” with outsized carbon footprints from lifestyles that include larger homes and more jet travel, pay more in higher prices than they receive in dividends, but they can afford it. And of course, everyone benefits from cleaner air and a more stable climate.

So, basically, this is just making the poor even more dependent on government, and there’s the inherent threat to the poor, and to the middle class, that if they do not cooperate and be good little comrades the money will go away. Further, this is all a lie, because the carbon dividend schemes usually talk about refunding 4/5ths of what it costs citizens, because Government needs operating cash, and, otherwise, the good little comrades will refuse to keep their carbon footprints low.

Carbon dividends are emerging as the political sweet spot for a future bipartisan agreement in Washington. If and when lawmakers get serious about tackling climate change, the best route out of partisan stalemate may well be a carbon dividend. Treating natural assets as universal property that belongs equally to all, and rewarding everyone for using that asset wisely, is an approach that can unite environmentalists and free-marketeers, Democrats and Republicans, on a solution to what is arguably our most urgent national challenge.

People in Canada are now learning the problems with this scheme, and realizing it’s just more of the old in new packaging. Their cost of living is going up up up. Go ahead and push this, Warmists. See how it goes.