The Science Behind a Carbon Fee & Rebate: It’s About Justice

The Science Behind a Carbon Fee & Rebate: It’s About Justice

Written by interns Danniele Fulmer, Maria Zlotescu, and Olivia Kuykendall 

At the heart of any campaign that combats climate change, there should be a dedication to justice and equity. The proposed D.C. carbon fee and rebate policy is a wonderful example of this dedication to a cleaner, more equitable future. Backed by economists, environmentalists, and social justice activists, this policy can help all the District’s residents, especially the most vulnerable.

And now, two new economic studies show how and why the rebate portion of this policy is essential to addressing justice.

It has long been established that carbon and rebate fee models can be used to reduce carbon dioxide emissions to combat climate change. Carbon pricing has also been embraced as the most effective solution by economists. In the 2015 report, “Expert Consensus on the Economics of Climate Change,” a survey found that 75% of economists agree that market-based mechanisms, such as a carbon tax, are the best way to address climate change.

Now, two new studies demonstrate that carbon fee and rebate policies can have economic benefits while also addressing justice. In particular, these studies, conducted by Boston College and the University of Massachusetts Amherst, found that fee and rebate models can lead to a substantial decrease in income inequality. The studies both bear well on our efforts to put a price on carbon in D.C. through a fee and rebate model.

The first study, titled “Income Inequality and Carbon Emissions in the US: A State-Level Analysis,” found that there is a direct correlation between the concentration of wealth and carbon dioxide emissions. Basically, the higher the income equality in any given state, the likelier it is for the state to have higher carbon dioxide emissions, as is demonstrated by the tables below.  


Additionally, the Boston College study notes that a carbon tax without a built in rebate could harm low-income communities. But with a rebate, this type of policy has the potential to benefit a larger portion of an area’s population. The study found that if a $200 tax per ton of carbon were adopted without a rebate, the bottom quintile of households would suffer 10.2% income loss. However, with a built-in rebate, the bottom quintile would see a 14.8% gain in income.

Luckily, the D.C. carbon fee and rebate policy plans to do just that, by rebating 75% of carbon revenue back to D.C. residents, with other portions reserved for renewable energy projects and local business property tax assistance.

The second study, “A Distributional Analysis of a Carbon Tax and Dividend in the United States,” published by the University of Massachusetts Amherst, compared carbon fee and rebate programs with other climate solutions such as cap and trade and tax breaks. The basic finding was that cap and trade, as well as tax breaks, could benefit higher income individuals disproportionately, leading to regressive impacts on lower and middle-income individuals. Furthermore, regressive tax measures have a tendency to reduce spending in regions, resulting in a decrease in economic activity. However, the researchers yet found that carbon fee and rebate policies have the potential to empower citizens through income gains, resulting in an increase in purchasing power and higher economic activity. More specifically, the study showed that distributing equal rebates can protect the purchasing power of 61% of individuals, 89% of which fall under the lowest income category.  This goes to show that utilizing a carbon fee and rebate model is truly the most equitable way to address climate change.

By looking at the proposed D.C. carbon fee and rebate policy against this backdrop, we can see that one of the most critical elements of the policy is the rebate mechanism, which prevents regressive outcomes.

When considered together, both of these economic studies support the idea that a carbon fee and rebate policy is the most efficient and just mechanism to address climate change, which is great news for the D.C. carbon fee and rebate campaign!

We have environmental and economic experts on our side. Now we must build our movement to get this policy passed in the District.

This campaign has been in the works for two years now and there is no doubt that the overwhelming body of support from economic, environmental, and social justice standpoints will continue growing from here. Over 20 cities and states are currently either voting on or following a carbon fee and rebate plan. Environmental experts already support carbon fees as a way to reduce CO2 emissions. Politicians from both sides of the aisle also endorse the idea. The carbon fee and rebate bill would not only be environmentally effective, but economically beneficial as well. According to leading environmentalists, in order to prevent irreversible damage to the environment, the U.S. must eliminate carbon pollution entirely by the end of the century. The carbon fee and rebate policy will go a long way to meeting that goal.

Article Citations:

  1. Fremstad, A. and Paul, M.. “A Distributional Analysis of a Carbon Tax and Dividend in the United States.” Working Paper Series, Political Economy Research Institute (2017).
  2. Jorgenson, A, et. al. “Income Inequality and Carbon Emissions in the US: A State-Level Analysis.” Ecological Economics 134 (2017) 40-48.
In The News

In The News

7/27/17

D.C. carbon fee would drive down emissions and provide generous rebates, study says

Mark Hand, ThinkProgress


6/5/17

D.C. joins more than 175 other cities in pledging to uphold Paris agreement goals

Mark Hand, ThinkProgress


5/30/17

What happens if you replace every social program with a universal basic income

Dylan Matthews, Vox


5/29/17

Thankfully, Virginia and D.C. are taking climate policy into their own hands

Washington Post Editorial Board
Continue reading

Landmark Study Finds Carbon Fee-And-Rebate Policy Would Boost D.C. Businesses, Families, and Economy

Landmark Study Finds Carbon Fee-And-Rebate Policy Would Boost D.C. Businesses, Families, and Economy

WASHINGTON, D.C. — On Thursday, July 27, a new draft study detailed how a carbon fee-and-rebate policy would benefit the local economy of Washington, DC. According to the study’s findings, the policy — being proposed by the “Put A Price On It, D.C.” coalition — can effectively reduce carbon emissions in the District while maintaining economic growth and job creation, and putting more money in the pockets of DC residents.

The independent analysis, titled “Assessing Economic Impacts of a Carbon Fee & Dividend for DC,” was carried out by the Center for Climate Strategies (CCS) and shared at an event hosted by Regional Economic Models, Inc. (REMI). The draft study found that the policy would result in a steady boost in jobs — particularly in the construction sector — and stable economic growth, while reducing planet-warming carbon emissions 23 percent by 2032 for electricity, natural gas, and home-heating oil consumed in the District. Transportation emissions also fall under this examined policy.

Roger Horowitz, Co-Founder of Pleasant Pops, stated: “With the carbon fee-and-rebate policy, DC has the opportunity to become a national leader on climate action in a way that is equitable and just — and good for our business. Putting a price on global warming pollution and rebating the revenue to families will keep our business going and improve the health of our community.”

“Zenful Bites is proud to be part of the ‘Put a Price on It D.C.’ coalition. This policy will expand our customer base and make our city a healthier, safer place to live. We’re happy to help move this campaign forward for a more sustainable economy,” said Josephine Chu, Co-Founder of Zenful Bites.

The study modeled the indirect and induced changes that occur throughout all sectors of the DC economy as businesses, households and the government respond – not only to the fee itself, but also to the newfound money available from the return of that fee every month. The analysis projects that, by 2032, the policy would generate a rebate of $170 per month for the average family of four and $294 per month for a low-income family of four. This gradually rising rebate would increase residents’ support, thereby increasing the policy’s durability.

“We support this because it would spur companies like ours to dramatically increase their investments in clean energy, while leaving more money in the pockets of DC residents to reinvest in local businesses, restaurants and services,” said Tom Matzzie, Founder and CEO of CleanChoice Energy.

The proposed policy would redirect a portion of the revenue raised as tax relief to small businesses. This will total $30 million per year by 2032, thus enhancing the ability of local businesses to remain competitive in the region and to maintain a permanent and robust presence in the city.

“The numbers clearly show that a carbon fee-and-rebate policy is not only the best option to reduce D.C. carbon emissions, but also a sound mechanism for growing a robust economy powered by clean energy,” said Mishal Thadani, Co-Founder of District Solar. “This policy is simple, fair for every stakeholder, and will ultimately attract many new and innovative companies to the District.”

Fighting for the Future with Moms Clean Air Force

Fighting for the Future with Moms Clean Air Force

Written by Olivia Kuykendall and Maria Zlotescu

What is one thing every child deserves? The chance to grow up in a world free from worries of climate change.

On July 14, Moms Clean Air Force held its annual “Play-In For Climate Action” in Washington D.C. to fight for that chance. Dozens of eager climate activists filled the Upper Senate Park to advocate for a cleaner future. Attendees came from as far Texas to listen to speakers discuss the fate of our planet.

The event featured speakers of all ages to highlight that our climate is an issue that that will affect the present and future generations. Moms Clean Air Force offered plenty of activities to engage families. Children played with parachutes and bubble machines while families attempted yoga and dozens of other activities. The events made the rally not only a political event but a community one bringing together strangers united by a common cause.

Parents at the rally were not all fearful of their children’s future — they were hopeful. Hopeful that their children could one day have healthier water and cleaner air.

The experience made me hopeful, too. Many listened to our Put A Price On It campaign testimonies and were interested in getting involved. Plenty thanked me for my time, expressing the importance of advocacy in the fight for cleaner air. One attendee even expressed the importance of the involvement of young people in the climate action movement.

While young people are important, today’s parents are raising the next generation of voters. Children who see their parents involved in activism are more likely to follow. The children who attended the event today are the environmental leaders of tomorrow.

During the event, I also had the opportunity to sign up for “Dear Tomorrow” — a project where people share letters, photos and videos to their children, family or future self about their promise to take action on climate change. I’m going to write a letter to my little nephews. I want them to be able to visit the Potomac River like I did as a kid.

As we left the event, many rally-goers went to meet with their senators or representatives. I am confident that their meetings went well because I saw their passion and dedication with my own eyes. It gave me energy.

As Moms Clean Air Force fights on the national level, let us remember our local fight. Break out the signs, petitions, and phones. Let’s put a price on carbon pollution in DC. Not just for us. For the kids.

Photos courtesy of Moms Clean Air Force.

Stop scrolling. Start meeting real people.

Stop scrolling. Start meeting real people.

Can you remember the moment you decided to really fight for climate action? It probably wasn’t a Facebook post or a cynical tweet. More likely you had startling conversation, formed a new relationship, or discovered a new community and a way to get involved.

Real social change requires face-to-face interactions. That’s why we need you to help us reach out to our communities this summer and build a powerful base to support our campaign to put a price on carbon pollution once and for all.

In her new book, “Twitter and Tear Gas,” writer and social scientist Zeynep Tufekci reminds us of life before social media. Mobilizations like the March on Washington once grew out of years of painstaking recruiting, training, and coordination. Paradoxically, it was the very difficulty of face-to-face organizing that forged leaders and decision-making structures strong enough to weather storms of the opposition.  

Today we are faced with the intense challenge of transitioning to a clean and efficient energy economy before we fry ourselves alive. The speed of online communication suits the urgency of climate change. However, the strength of the fossil fuel empire demands an unprecedented depth of commitment and relationships among us. That means smiles, high-fives, and conversations with – gasp! – eye contact. (Which is what we all really want, right?)

To win a solution so powerfully scalable as a carbon fee and rebate in Washington, D.C., our movement must be made of a living web of trusting relationships that can flex, focus, and keep growing through the ups and downs of this ambitious campaign. That’s why the 30+ organizations in our coalition have spent the past two years getting to know one another. Now we want to know every neighborhood in our city.

Mark your calendars for a community outreach event in YOUR neighborhood. Read on for the schedule and details!

Find the community outreach event in your neighborhood:

Why be part of the action? Allow me to testify: there’s nothing quite so fulfilling to offer other concerned people a chance to really DO something about the climate crisis. It’s weighing on all of our hearts and minds, and by getting out there to recruit new people to the campaign, you’re doing them a favor of empowerment.

So let’s hit the streets this summer!


 

PS: Sierra Club will be hosting a volunteer training on Monday, July 10. You’ll get all your questions answered, and receive top-notch training on how to win the support of DC council members, ANCs, Civic and Citizen Associations, businesses, and your neighbors at the farmers market. We want to be sure you’re fully trained and ready for these opportunities to build an unstoppable power base for climate action in DC. Click HERE to RSVP!

 

Schedule of Community Events

Schedule of Community Events

Join us this summer as an ambassador for climate action in D.C.! Sign up for a community outreach event in YOUR neighborhood. There will be tons of opportunities for community outreach — read on for the schedule and details!

Find the community outreach event in your neighborhood:

 

Building our Movement at Capital Pride

Building our Movement at Capital Pride

Each year Dupont City hosts the Capital Pride Parade to commemorate the 1969 Stonewall riots, which paved the way for decades LGBT rights activism. As a coalition working to create a greener and more equitable city, Put A Price On It D.C. is committed to working across all progressive movements.

That’s why last weekend we headed to the 2017 Capital Pride Parade to get the word out and speak with city Councilmembers.

Our committed campaign leader, Howard Crystal, recapped his valuable experience bird-dogging at the parade!

I’ve never been in the Pride Parade or witnessed the behind-the-scenes set-up process. This past weekend however, I not only got to be behind the scenes–I had the chance to join a terrific team bird-dogging councilmembers for the Put A Price On It Campaign!

The team started the day with an orientation from Climate Justice Organizer, Jeremiah Lowery. After the orientation, we searched the parade crowds for any councilmembers lined up to march.

We spotted Councilwoman Mary Cheh, a continued champion of sustainability politics, first and I volunteered to give her our pitch.  After speaking with the councilwoman, we spoke to her supporters as well as other councilmembers.

In the end, I got the chance to talk to four Councilmembers and several of their supporters in the midst of the exciting parade. Everyone we spoke with was supportive. One councilmember even assured us he is on board with the campaign!

I hope you have the chance to get out there and speak with councilmembers about this important campaign. They need to hear from all of us!

VIDEO: Why these D.C. residents are working to put a price on carbon

VIDEO: Why these D.C. residents are working to put a price on carbon

Our hot new campaign video has officially kicked off summer in the District! We spoke to four D.C. residents to explain why they want the city to put a price on carbon pollution.

 

It’s been over a week since Donald Trump’s reckless withdrawal from the Paris Climate Agreement. Thankfully, D.C. Mayor Muriel Bowser responded by affirming the city’s commitment to climate action. She pledged to reduce D.C.’s carbon emissions 80 percent by 2050. Awesome!

Unfortunately, D.C. isn’t on track yet to meet its climate goals. With a comprehensive climate policy like the carbon fee and rebate, D.C. would be well on its way — and it would set an example for the entire nation.

If there there is one thing we’ve learned this week, it’s that we need real action. It’s more important than ever that states move forward on carbon reductions in a progressive and effective way. A comprehensive policy, like the proposed carbon fee and rebate, is the only way to reduce carbon emissions quickly and efficiently. And it’s what D.C. residents want: a full 74 percent of residents want to reduce carbon pollution in the District.

So what can you do? WATCH the new video, SHARE it with all your friends and family, and JOIN our campaign for a greener, cleaner, more equitable D.C.

We marched. Now, we act!

We marched. Now, we act!

The past few weeks have been HUGE for D.C.’s number one climate campaign. First, we marched with a couple hundred thousand of our closest friends. Then, we unveiled the details of our policy at our campaign launch with a huge show of support!

Now, it’s time to ramp up our efforts. We need to encourage D.C. Councilmember Mary Cheh to introduce a bill for a carbon fee and rebate, and to pass it this year. To do that, we need your help! The bill we are proposing would make fossil fuel polluters pay for the real and damaging costs of their emissions with a steadily-rising fee on carbon. The majority of the money raised would be returned—through a quarterly “rebate”—to every D.C. resident, with additional support to low-income District residents. This “fee-and-rebate” approach would also include critical investments to help small businesses, transit and more. Read the details here.

D.C. families would benefit both economically and environmentally from cleaner air and water, new jobs created in energy efficiency and renewable energy, and more money in their bank accounts.

Councilmember Cheh has spearheaded the quick passage of sustainability policies in the past, such as the Renewable Portfolio Standard (RPS) Expansion Amendment Act of 2016, which sets a goal of increasing D.C.’s clean energy use to 50 percent by 2032.

However, we are not on track to meet the city’s overall greenhouse gas goals. That’s why we need a strong, economy-wide policy like a carbon fee and rebate.

Now it’s time for us to ensure Councilmember Cheh continues to be a progressive champion on our issues, while helping D.C. meet ambitious sustainability goals! Councilmember Cheh wants to hear from her constituents, so the best thing you can do is contact her directly.

Send a message to Councilmember Cheh thanking her for her leadership and asking her to support our carbon fee and rebate policy.

We marched. We rallied. Now we organize. Our moment is now.

Voices from the Peoples Climate March: Why We Need A Carbon Price

Voices from the Peoples Climate March: Why We Need A Carbon Price

Guest post from DC resident Roger LeBlanc, Jr.

Culminating a year of of people-powered resistance, more than 200,000 people marched in DC and around the world on April 29 to wake up our society to the climate crisis. People across many generations, backgrounds, faiths and communities stood up to say that enough is enough with polluters threatening the health of our humanity

I spoke with two protesters and DC Ward 5 residents about why they were motivated to march. Continue reading