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.
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.

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.