Benefits
Carbon cashback legislation would power America forward to clean energy.
It's not the only thing we need to do to solve the climate crisis, but it's one of the most effective steps we can take as a nation on the path to net zero carbon emissions by 2050. This act would put a fee on carbon pollution, creating a level playing field for clean energy. The money collected from fossil fuel companies goes back to Americans in the form of a monthly carbon cashback payment so that everyone can afford the transition.
It's important to realize that not taking action to curb carbon emissions will result in enormous costs. On our current course, America's economy is forecast to shrink by up to 7% due to the increased costs of climate change by 2050, resulting in over $800 billion each year in economic losses, or over $6,000 per household.
There's still time to take action and change course. Here are some of the benefits that would result:
Net Zero by 2050 — This policy is both powerful and fast-acting. It could be implemented within months of passage and start reducing carbon emissions faster and cheaper than regulations.
Affordable Clean Energy — With this policy, government sets the direction for the economy and markets respond. Jobs are created and workers benefit as businesses strive to innovate and compete, leading to affordable and abundant clean energy for everyone.
Money in Your Pocket — The carbon cashback is a monthly payment to every American to spend as they see fit. Under this policy, these payments would be enough to essentially cover the increased costs of 85% of American households, including 95% of the least wealthy 60% of Americans.
Saves Lives — By reducing the pollution we breathe, this policy would improve health and save 4.5 million American lives over the next 50 years. This would have particular impact in communities of color, which have suffered the worst health consequences of burning fossil fuels.
Studies on the effects and benefits of the carbon cash-back approach have been done by several independent organizations. All project rapid carbon pollution reductions and many co-benefits for our health, low- and middle-income family budgets, and jobs. You can learn more about what these studies have to say here:
An Assessment of the Energy Innovation and Carbon Dividend Act — This 2019 study by Columbia University modeled the impact of the EICDA on carbon emissions, air pollution, and household dividend payments.
The Economic, Climate, Fiscal, Power, and Demographic Impact of a National Fee-and-Dividend Carbon Tax — This study conducted by Regional Economic Modeling, Inc. (REMI) in 2013 looked at the broad impacts of carbon fee and dividend across the environment, economy, and health.
2020 Household Impact Study — This study, conducted by Kevin Ummel, a researcher at the University of Pennsylvania, examined how a price on carbon will impact households across regional and demographic factors in the first year.
This graph from the 2020 Household Impact Study shows that, in Delaware, 65 percent of households would get enough in dividends to exceed their increased costs, while another 24 percent would incur only a minor loss (less than 0.2 percent of income — e.g., for a $100,000 income, less than $200 per year).
As is the case nationwide, the poorest households (Quintile 1) benefit the most financially, while many of the wealthiest households (Quintile 5) incur no more than a minor loss.
State-level results were determined by the mix of household economic conditions, the regional carbon intensity of energy, and local energy prices. See the full household impact report for Delaware here.