Cap and dividend gets closer to fine
By Juliane Poirier
Act one, scene one: Curtain opens to stagehands removing a gurney covered with 1,400 pages of leaden cap-and-trade law so dense it had collapsed on the Senate floor. Stage empty, the lights go up as three fiddles launch a reel. Suspended at center stage is a sprightly document, a 29-page poster child of transparency known as the CLEAR Act. A large text banner appears above the document: "Carbon Limits and Energy for America's Renewal Act." Hundred dollar bills begin raining thickly down upon the audience, who cheer and dance in the aisles. Want to see this show live?
The next scene is unfinished, but we can hear faint bipartisan cheers from the U.S. Senate. San Rafael resident Mike Sandler thinks the overall plot goes something like this: the CLEAR Act gets passed into law and big oil and coal feel the pain; Americans collect checks every month; new green jobs appear; and greenhouse gas emissions drop significantly—estimated to be reduced by up to 80 percent in our children's lifetime—as conservation practices increase dramatically.
Sandler, a climate consultant and cofounder of the Climate Protection Campaign, is so excited about the CLEAR Act that he joined with some Sonoma County folks for a photo shoot at the Chevron refinery in Richmond last week, posing with oversized dividend checks. "We were like game show hosts," Sandler laughs, explaining that the oversized checks represented money Americans would be paid each month if the legislation passes. "Under the new law," he says, "corporations would be required to purchase a permit to pollute, paying by the ton for the greenhouse gas emissions they produce in the course of doing business. That permit money would go to households."
To give credit where due, Rep. Mike Thompson, D-Napa, attempted a similar legislation previously. Thank you, Mike. The current incarnation is sponsored by Sens. Susan Collins, R-Maine, and Maria Cantwell, D-Washington. The CLEAR Act will provide the greatest benefit to lower-income families; wealthier Americans, who consume resources at significantly higher rates, will receive the same dividends but benefit from them less dramatically. According to a report issued by Cantwell's office, a family of four will receive about $1,100 annually, or "up to $21,000 through 2030" as a result. The law seeks to regulate fossil fuel where it first enters the economy—at the coal mines and on the oil tankers. Fuel prices will rise as a result, but conservation and efficiency measures can combat that. And even after paying at the pump and paying utility increases passed on to us, Americans will still come out ahead financially. Furthermore, the law will include pollution-permit price increases over time.
"The European Union's cap and trade system had no price floor, so when the economy went down, their pollution permit profits went down too," Sandler explains. "Ours won't go down. At first, the permit prices are allowed to fluctuate between $7 and $21 per ton, which is the price collar to control volatility. But the collar will go up over time, making it more and more costly to pollute. The system provides incentives to invest in efficiency now."
Meanwhile, the fossil-fuel purveyors who are furthest up the consuming chain will feel the pain of paying something approaching the true cost of polluting. "Right now that adds up to a lot of money," Sandler says. "And we get it all. Seventy-five percent we get in direct cash payments and 25 percent goes to a community investment fund."
These investments are for energy efficiency. The Cantwell Report states that "investments of dividend in energy efficiency, renewable energy and other activities to reduce carbon intensity will also help to keep more money in the U.S. economy and send less overseas to foreign producers of fossil fuel. In this way, dividends can help to improve America's energy security and create new jobs."
So when Sandler and his band of merry climate advocates took pictures in front of the Chevron refinery last week, they were actually luring us toward the stage where we can watch the CLEAR Act improve our climate and fatten our wallets.
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