A carbon dividend would benefit Alaskans

Have you ever been left with the bill for costs you never agreed to pay? The ultimate examples of this types of cost, known as a negative externality, are those imposed on all humanity due to the effects of global climate change. The primary source of these externalities is excessive fossil fuel emissions, which causes a cascade of costly effects including global warming and ocean acidification. Climate change is already hurting people throughout the U.S., and costs are expected to rise sharply unless emissions are reduced rapidly.

Why should Alaskans be especially concerned about climate change? The oceans absorb nearly a third of human caused C02 emissions. This changes the chemistry of seawater in a process called acidification, which makes it harder for shellfish, coral, and plankton to build their shells. Stress to these organisms ripples up the food chain, affecting fish, mammals, birds, and other wildlife. Alaska’s coastal waters are especially vulnerable to acidification. In addition, unabated carbon emissions are causing sea level rise, ice melt, and warmer waters. These compounding effects are already hurting Alaska’s valuable marine fisheries.

Alaska is warming twice as fast as the rest of the world. This summer we suffered abnormally devastating Bering Sea ice melt, record heat, major fires, prolonged drought and sea mammal and bird die-offs. Events like these are projected to worsen if emissions continue to rise.

Is there any consensus about what can be done? Fortunately, yes, economists agree that the best way to reduce emissions at the scale and speed necessary is a carbon dividend. In fact, a carbon dividend is the most endorsed policy by economists in history, with a growing list of more than 3,500 signatures from U.S. economists, including 27 Nobel laureates and all living former chairs of the Federal Reserve.

What is a carbon dividend? There are two complementary parts: a fee and a dividend. A fee is put on fossil fuels like coal, oil and gas, creating a market-based disincentive to emit carbon. Rather than distort the market, a fee corrects a market failure by internalizing the externalities of emissions. Revenue from the fee is refunded back to the population equally as a dividend, similar to the Alaska Permanent Fund dividend.

The bipartisan, revenue-neutral Energy Innovation and Carbon Dividend Act (H.R.763) is the most promising pending legislation which would implement a carbon dividend. The bill would start with a fee of $15 per ton of carbon emissions, which would adjust annually to meet emission targets. All revenue from the fee would be used to pay a monthly dividend to every household. Border fee adjustments would protect American businesses, prevent emissions leakage and encourage other countries to also put a price on carbon.

Why is the dividend so important? Until renewable energy becomes cheaper, a fee on carbon would raise energy costs for many people, including low income households, who pay a larger percentage of their income on energy. The dividend would more than offset increased costs, giving lower income households a boost in disposable income. In fact, studies suggest the majority of Americans would see their net income increase, including most rural Alaska households.

The most sobering risk of continued emissions is that if global warming crosses a tipping-point, self-reinforcing feedback loops could push the Earth irreversibly onto a “Hothouse Earth” pathway. While there is uncertainty around where such a tipping point might be, the precautionary principle tells us this uncertainty gives us additional social responsibility to reduce emissions as a means to mitigate risk. In other words, better safe than sorry.

A study found that the H.R.763 would reduce emissions to 50% below 1990 levels by 2035, while creating jobs, growing the economy, and saving lives (due to less air pollution). The fee on carbon would reduce emissions, steering us away from catastrophic climate change, while the dividend would give the majority of Americans a net boost in income, stimulating the economy. The synergistic benefits of combining the fee with the dividend make it a win-win solution.

What can you do to help? Support a price on carbon and its most promising implementation, the Energy Innovation and Carbon Dividend Act. Call or write Congressman Young, Senator Murkowski and Senator Sullivan. Join your local chapter of Citizens Climate Lobby. Join us in correcting the biggest market failure of our generation, and creating a livable world for the next.

Darren Zal is a 27-year-old software developer in Anchorage and a member of the Anchorage chapter of Citizens Climate Lobby.

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