Maryland Rep. Christopher Van Hollen has introduced a “cap-and-dividend” bill that would:
- Set emissions reductions targets at 25 percent below 2005 levels by 2020 and 85 percent below 2005 levels by 2050 for covered emissions.
- Place an upstream compliance obligation on the first seller of fossil fuels into the U.S. market.
- Auction 100 percent of carbon permits.
- Establish tariffs to protect U.S. manufacturers of carbon-intensive goods from imports of carbon-intensive goods originating in countries.
- Return 100% of auction proceeds in the form of a monthly Consumer Dividend to every lawful resident of the United States with a valid Social Security number.
A few thoughts:
- At best, Van Hollen’s “dividend” would be just a return of your own money that you had to spend on higher energy costs that were caused by the bill. This hardly a true “dividend,” which is a return on investment.
- Van Hollen’s dividend is unlikley to cover your higher energy costs. Click here for some back-of-the-envelope calculations.
- A carbon tariff would likely do little more than bring on a trade war with China.
The only upside to Van Hollen’s bill is that a 100% auction of carbon credits is likely to light a fire under businesses to kill any such bill.