LASER TALK: Carbon Fee and Dividend a.k.a. Climate Income

Carbon Fee and Dividend is a carbon price that is revenue-neutral (meaning that the revenues do not go to government coffers). It is also known as Climate Income. It functions as follows:

  1. A fee is placed on carbon-based fuels at the source (well, mine, or port of entry).
  2. This fee increases steadily each year so that clean energy is cheaper than fossil fuels within a decade.
  3. All the money collected is returned to Canadians on an equitable basis.
  4. Under this plan, most Canadian households would break even or receive more in their dividend than they would pay for the increased cost of energy, thereby protecting the poor and middle class.[1]
  5. A predictably increasing carbon price will send a clear market signal, which will unleash entrepreneurs and investors in the new clean-energy economy.
  6. Border carbon adjustments are eventually enacted in partnership with climate-friendly nations to protect vulnerable domestic industries while incentivizing other countries to price carbon.

[1] “Fiscal and Distributional Analysis of the Federal Carbon Pricing System.” 25 Apr. 2019, https://www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/2019/Federal%20Carbon/Federal_carbon_pricing_EN.pdf. Accessed 20 Jul. 2019.

 

Here is a good video that explains carbon fee and dividend:

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