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Price on Carbon

For several years, The Center for Climate Protection has been advocating for a carbon price that returns revenues to people. The California Climate Credit is one of the first times that this has been put into practice.

cap and dividendA Price Signal for Climate Protection

Why do we need a price on carbon? To reflect the actual cost to our economy and environment of fossil fuel. When we have to pay more to pollute the atmosphere for our energy needs, we will consume less fossil fuel based energy and more renewable energy. We can do this by “capping” the greenhouse gases that are allowed to be put into the atmosphere and making polluters pay when they emit emissions under this cap.

At the same time we need a policy that addresses the regressive impact of rising energy prices on middle and lower income people that such a carbon price will contribute to. That is why we believe a substantial portion of any revenue collected by the state from a carbon tax or fee should be returned to citizens in the form of a dividend, rebate, or credit. This is sometimes referred to as “Cap and Dividend.” The good news is that in California, in part because of our efforts, we now have both.

Money in your pocket – Your Climate Credit

In 2014, millions of Californians received the first ever “climate dividend.” This climate dividend is returned to you by the California Public Utilities Commission as part of the State’s response to climate change. It appears as a line item on household electric utility bills for customers of PG&E, Southern California Edison, San Diego Gas & Electric, and a few others in April and October, amounting to between $20 and $140, depending on the utility. Though it is not a large sum of money, returning these funds to consumers represents a major shift in policy. It can pave the way for a new type of environmentally friendly economics. This breakthrough came about after years of educating policymakers about the importance of returning the revenues from a carbon price back to all Californians.

We need your help to go further

donate-now1The Center for Climate Protection was at the forefront of this effort, and we will continue to advocate for climate dividends, but we could use your help. You can help build on our success in California by donating your climate credit to the Center for Climate Protection by clicking here and typing “Climate Credit” in the box that says “I want my donation to be dedicated.”

Why are climate dividends/credits so important?

Pollution is not free. It creates health problems, harms the environment. Making companies pay for their pollution captures some of those costs, which can be returned back to all of us through dividends. The dividend converts the carbon pollution going into the atmosphere into money going into your pocket. With dividends, you can come out ahead by taking action to reduce your impact and your costs. The amount of your dividend will stay the same, even if you reduce your energy use.

Cap and divend illustration2How it works:

Companies that generate energy pay into a fund that compensates everyone for the pollution emitted into the sky we all share.

How does The Center for Climate Protection promote climate dividends?

The Center for Climate Protection has focused on getting a price on carbon that reflects the actual cost of fossil fuel to our economy and environment, and includes climate dividends. Since 2007 the Center has been educating policy makers, stakeholders and the public with the aim of including climate dividends in California’s implementation of AB32, the Global Warming Solutions Act.

We have attended dozens of hearings, submitted comments, and organized events to educate policymakers about climate dividends.

The CPUC’s adoption of the first climate dividend came about because policy makers were educated. We weren’t the only ones there, but we were an important part of that. We had other victories along the way leading  up to this.

A State-appointed panel of experts, called the Economic and Allocation Advisory Committee (EAAC), studied the best strategy to allocate the revenue raised by the cap & trade program. The EAAC’s January 10th, 2010 report  recommended that the largest share – roughly 75% of allowance value – should be returned to California households. According to EAAC figures, this dividend translates to $388 in 2012 for a family of four, rising to $1,036 by 2020, adding a total of $7,004 to family incomes over the 8 year period. The Center for Climate Protection continues to reach out to lawmakers to incorporate this recommendation into future legislation. If we are successful, it will be a huge victory for California’s economy and the environment!

The Center for Climate Protection also promotes climate dividends at the national level. Congress is currently considering the Healthy Climate and Family Security Act, sponsored by Representative Van Hollen. The bill currently has 27 supporters, but the fight will continue to ensure that a portion of the revenues raised by a carbon price are returned to households.

Harvard Professor Theda Skocpol’s essay on Scholars Strategy Network August 2013 explains “Why Now is the Time to Build a Broad Citizen Movement for Green Energy Dividends”.

By donating your climate credit to The Center for Climate Protection, you are helping pave the way to more Americans to receive climate credits and moving us toward a sustainable future. Donate now>


More resources:

Mike Sandler in Huffington Post Green 7-29-15: Five Ways to Improve California’s Cap and Trade System

Barry Vesser and Mike Sandler in Santa Rosa Press Democrat 2-13-13: Cap and Trade Funds On Way

Mike Sandler in Huffington Post Green 12-5-12: The Birth of Carbon Pricing and Delivering California’s First ‘Climate Dividend’

Alex Jackson at NRDC 12-20-13: California PUC Approves First-of-its-Kind “Climate Dividend” for California Households

AOL Energy Blog 1-9-13: California Ratepayers to Receive Cap-and-Trade Dividend

San Francisco Chronicle 11-16-12: Cap and trade may be plum for homeowners

Mike Sandler in Huffington Post Green 5-30-12: Climate Dividends: California’s Chance to Change Hearts and Minds

James K.Boyce & Matthew Riddle., CLEAR Economics,  UMass Amherst, March 2010

Peter Barnes, Americans for Equitable Climate Solutions and Corporation for Enterprise Development, “Sky Trust Initiative: Economy-Wide Proposal to Reduce U.S. Carbon Emissions”