The letter below was published in the Bernardsville News on October 9, 2014.
EDITOR:
We have abundant evidence that the earth is warming. This warming is already producing harmful changes in climate, sea level, and other conditions in the natural world. All will get worse as warming continues, and new problems will appear.
We don’t need more evidence of problems. We do need action to slow warming.
We also don’t need more stories with gloom and doom, even though some projections are scary. Meeting challenges has been our history. We can meet this challenge too.
Most important now is action to phase down burning of fossil fuels and the associated emission of carbon dioxide (CO2), the most important greenhouse gas. The good news is that there are several ways to do this. The best, I believe, is called “carbon fee and dividend” or CFD.
A fundamental holding in economics is that the use of something in a market economy declines as its price rises. The most effective way to reduce use of fossil fuels is to raise their prices.
With CFD, impose a fee on each kind of fossil fuel at its source: mine, well, or port of entry. Base the fee on the amount of CO2 emitted when the fuel is burned. Start the fee low and raise it each year in accordance with a published long-term schedule. Design the schedule to achieve long-term CO2 reduction goals. Review progress towards the goals and the overall economy at regular intervals, and adjust the fee schedule and/or goals if appropriate.
The fee schedule will provide a common basis for all to plan for the long term.
Some, who resist the evidence of global warming, may do so because they fear that acceptance will lead to larger government and more restrictions on private decisions. CFD can ease these concerns.
Here’s how it works.
• The federal government will collect fee revenue, divide it into equal shares, and return it to citizens as dividends.
• The rising fee will gradually raise the price of fossil fuels and send a price signal to conserve energy and to replace fossil energy with non-fossil sources.
• The business community—existing firms, inventors, investors, entrepreneurs—will respond with ways to do this. Examples: better insulation of buildings, more efficient appliances, solar and nuclear energy.
• The dividends will help citizens adjust to rising energy costs, and to buy what will help them use less energy. They will enable the transition from fossil fuels.
• People will make billions of individual and corporate purchase decisions.
• The drives to conserve energy and develop non-fossil energy sources will create new products, services, and jobs.
With CFD, the private sector will determine winners and losers, not government.
CFD can reduce government intrusion in the economy. Government can stop trying to pick and support winners–no more Solyndras, and then focus on basic research where it does a good job–like the early internet. The tax code can be simplified, because it will no longer be necessary to use it to subsidize conservation and energy.
Those, who like free markets and want less government, should like CFD.
Note also:
• The work to phase down fossil fuels and “re-energize” the economy will probably stimulate it.
• All participants in the economy will be affected by rising energy prices; all can contribute to the transition from fossil fuels; and all can take pride in progress towards the goals. This will be team effort on a national scale.
I describe here one thing that America can and should do. Global warming is a global problem and we should also consider what the rest of the world can and should do. I will leave that for another day and limit comment here to a firm belief:
If America leads by actions, not just words, the world will follow.
Citizens’ Climate Lobby (CCL) is a nonprofit, nonpartisan, volunteer organization with this mission: persuade Congress to adopt legislation for a system of carbon fee and dividend. I’m a member and will send these comments to Senators Robert Menendez and Cory Booker and Congressmen Rodney Frelinghuysen and Leonard Lance.
I urge readers to do the same.
To learn more about CFD and CCL, go to the CCL website. Or email me at wwallen29@verizon.net.
Bill Allen