State Panel Recommends Dividends to Help Consumers
A key committee working on implementing California’s Global Warming Solution’s Act, AB32, issued a report last week that recommends “Cap & Dividend,” a policy to return revenues from the auction of permits to consumers as dividends.
Billions of dollars are at stake as rules are created for a new carbon permit market. Revenue will be generated by selling permits to companies to allow them to emit a limited amount of greenhouse gas. The amount of permits descends over time to meet the scientific imperative.
The Campaign has conducted outreach and education on Cap and Dividend in California since 2007. We educate policy makers, stakeholders and the public with the aim of having Cap and Dividend be the top market-based solution for the Global Warming Solutions Act, AB32. Our recent work in Sacramento has been explaining the power and benefits of dividends to the Economic and Allocation Advisory Committee (EAAC) and California Air Resource Board officials.
The just-issued EACC report recommends 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. For the full EAAC report.
Governor Arnold Schwarzenegger stated, “I continue to believe the best program will be one that returns value to the people through tax cuts, rebates or dividends, and I applaud the Committee for recognizing those options.”
The EAAC report notes the benefits of dividends, including:
- It reserves public ownership of a common asset – the air we breathe – which we all share equally
- Returns the bulk of allowance value to households, helping low-income people who can least afford increases in energy and fuel prices
- Simple, transparent, and equitable
California’s serious consideration of dividends has caught the attention of the national media, because it has implications for the debate shaping up in the U.S. senate about climate policy. Here are a few articles:
Wall Street Journal, for the article.
New York Times, for the article.
Los Angeles Times, for the article.