Carbon Price


Georgia Institute of Technology

Photo: George Guberman

A price on carbon fuels commensurate with their threat level to the environment is essential to rapidly reduce fossil fuel consumption and transition to using renewables in a market economy. The most effective, broad-based measure is a significant steadily rising carbon fee.

The fairest method is a revenue neutral carbon-fee-and-dividend with full rebates citizens—this will generate broad-based public support, since those who use less-than-average carbon fuels will come out ahead. Carbon fee border adjustments will encourage other nations to price carbon or pay at our border, and would make US goods competitive. The fee must include all other greenhouse gases such as methane.

Benefits of Carbon Fee-and-Dividend

  • Offsets citizens' higher energy costs
  • Transparent, simple, and rational policy
  • Quickly implementable
  • Priced at the source (well, mine, or port)
  • Businesses don't directly absorb costs
  • Reduces emissions in all sectors
  • Stable, predictable carbon price signal for business planning
  • Incentivizes CO2 reductions and efficiencies
  • Stimulates low-carbon innovation and job creation
  • Not exploitable by special interests
  • Encourages worldwide adoption

With time running out and humanity's survival at stake, the US climate movement must now make passage of a Carbon Fee-and-Dividend a major priority of its efforts. It is the sine qua non for climate stabilization—without it, all other measures cumulatively cannot contain runaway warming and avert climate tipping points. Additional policies and reforms—such as feed-in tariffs, ending fossil fuel subsidies, a ban on fracking, and campaign finance reform to get fossil money out of politics—could follow the carbon tax as secondary priorities.

President Obama’s climate measures—including revised carbon pollution standards for new and existing coal-fire power plants—may be politically feasible, but they fall far short of what is needed from the US. A carbon fee will drive far more comprehensive reductions in emissions.



get updates