Hansen on Pricing Carbon

James Hansen:

The fundamental requirement for solving our fossil fuel addiction and moving to a clean energy future is a rising price on carbon emissions. Otherwise, if we refuse to make fossil fuels pay for their damage to human health, the environment, and our children's future, fossil fuels will remain the cheapest energy and we will squeeze every drop from tar sands, oil shale, pristine lands, and offshore areas.

An essential corollary to the rising carbon price is 100 percent redistribution of collected fees to the public -- otherwise the public will never allow the fee to be high enough to affect lifestyles and energy choices. The fee must be collected from fossil fuel companies across-the-board at the mine, wellhead, or port of entry. Revenues should be divided equally among all legal adult residents, with half-shares for children up to two per family, distributed monthly as a "green check". Part of the revenue could be used to reduce taxes, provided the tax reduction is transparent and verifiable.

The rising carbon price will affect almost everything. People's purchases will reflect a desire to minimize their costs. Food from nearby farms will benefit; imports from halfway around the world will decline. Renewable energies, other carbon-free energies, and energy efficiency will grow; fossil fuels will decline.

The fee-and-green-check approach is transparent, fair and effective. Congressman John Larson defined an appropriate rising fee. $15 per ton of carbon dioxide the first year and $10 more per ton each year. Economic modeling shows that carbon emissions would decline 30 percent by 2020. The annual dividend then would be $2000-3000 per legal adult resident, $6000-9000 per family with two or more children.

About sixty percent of the public would receive more in the green check than they pay in added energy costs.