Fee and dividend - AbsoluteAstronomy.com

Fee and dividend is a revenue-neutral mechanism designed to impose a progressive fee on carbon emissions and return the fee to the public, which has been proposed as an alternative method of reduction in fossil fuel

Fossil fuel

Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...

use to cap and trade

Emissions trading

Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....

and emissions trading

Emissions trading

Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....

mechanisms. This mechanism is designed to maintain economic function while encouraging transition to a sustainable energy economy while simultaneously reducing CO₂ emissions

Carbon dioxide

Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...

. The organization Citizens Climate Lobby, which advocates for such an approach, argues that a fee & dividend policy will be easier to adopt and adjust than more complicated mechanisms, thus enabling an economically sound transition policy that supports monetary economy needs, and the new energy economy, as required.
James Hansen

James Hansen

James E. Hansen heads the NASA Goddard Institute for Space Studies in New York City, a part of the Goddard Space Flight Center in Greenbelt, Maryland. He has held this position since 1981...

, Director of the NASA

NASA

The National Aeronautics and Space Administration is the agency of the United States government that is responsible for the nation's civilian space program and for aeronautics and aerospace research...

Goddard Institute for Space Studies

The NASA Goddard Institute for Space Studies , at Columbia University in New York City, is a component laboratory of NASA's Goddard Space Flight Center Earth-Sun Exploration Division and a unit of The Earth Institute at Columbia University...

has been working on raising awareness on 'Fee & Dividend' through his position at Columbia University

Columbia University

Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...

, and an open letter discussed in The Guardian

The Guardian

The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

Structure

The basic proposed structure is:

A fee is charged at the point of origin or point of import on greenhouse gas emitting energy (oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

, natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

and coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

).
The fee is progressive (increases gradually) over time.
The fee is returned to households equitably and in full.

In order to maximize effectiveness, the amount of the fee should be regulated based on the scientific assessments from both the economic science and the climate science in order to balance the amount of the fee and speed of fee progression. This is by design the most economically sound method to reduce CO2 emissions, stimulate the economy with the dividend, and stimulate the transition to a sustainable energy economy.

Implementation

Country	Region	Year started	Price of carbon	Price of CO₂	Per year progression
Canada Canada Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...	British Columbia British Columbia British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...	2008	$10 per ton	unlisted	$5 per year

Political support

Fee and Dividend is the main policy approach advocated by the Citizens Climate Lobby organization.

Inspired by the Fee and Dividend structure Republican Congressman Robert Inglis introduced a H.R. 2380 on May 13, 2009 in the U.S. House of Representatives called the 'Raise Wages, Cut Carbon Act of 2009'. Congressman Inglis considers energy infrastructure to be a national security issue and supports a variant of Fee and Dividend as the most reliable way to achieve energy security for America.
Another bill partly inspired by the Fee and Dividend structure was introduced by Democratic Congressman John B. Larson called H.R. 1337 on March 5, 2009 “America’s Energy Security Trust Fund Act of 2009″. Congressman Larson's bill would fund corporate subsidies.

Criticism

The Climate Lobby queried sources in business and finance to collect criticisms. The criticisms include:

The “fee” will just cause companies to raise their fees on the public so there will be no net change in cost.
The government will be taking a huge cut for “overhead” to distribute the dividends and maintain the apparatus.
Climate Scientists should do climate science and economists should handle the economy.
Since Cap & Trade is already on the table wouldn’t it be beneficial to just get it passed and then try to refine the policy or push Fee & dividend?
Shouldn’t we concentrate on enabling new technologies and businesses to develop needed technology and methods to solve this problem by enabling market forces to drive solutions?
Will the progressive fee affect costs in third world nations. Isn’t there a justice issue?
Cap and Trade vs. Fee & Dividend. Isn’t any policy a good start and then we can refine it?

External links

Fee and dividend at Climate Lobby
James E. Hansen at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.