HOW ABOUT A CAP-AND-TRADE DIVIDEND?
June 5, 2008
The Lieberman-Warner cap-and-trade bill is going nowhere. Even in the unlikely event Congress passes it, President Bush has said he will veto the measure, and there aren't nearly enough votes to override. So the real action on climate control commences on Jan. 20, 2009, when a new administration takes over, says Robert Reich, a professor of public policy at the University of California at Berkeley and former U.S. Secretary of Labor under President Clinton.
Both Sen. Barack Obama and Sen. John McCain are on record in favor of cap and trade; in fact, Sen. McCain has been among the strongest backers of the Lieberman-Warner bill. The main difference between their proposals is how the carbon permits would be allocated:
- McCain's proposal would initially give out most of the permits for free to the nation's biggest emitters of greenhouse gases; however, he has not completely ruled out a carbon auction.
- Obama has proposed allocating the permits through an auction; every company -- large or small -- would have to buy the rights to emit greenhouse gases.
It's important that all revenues from carbon auctions be cycled back to citizens, says Reich. Rather than launch another endless debate over how and to whom, it would be well to agree to the simplest possible formula: Every adult citizen should receive an equal share:
- Sen. Joe Lieberman estimates that the market value of all permits under his bill would be about $7 trillion by 2050; this enormous sum would go into a Climate Change Credit Corporation, which would invest in various plans for developing "alternative energy."
- If the carbon auction yields $150 billion in the first year, for example, each of America's 150 million adult citizens should receive a Treasury check that year of $1,000.
Source: Robert B. Reich, "How About a Cap-and-Trade Dividend?" Wall Street Journal, June 4, 2008.
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