Top Down or Bottom Up ???

Letter below was submitted to the Bernardsville News on 02-19-21.  It was published on line on 02-22-21, and in the print edition on 02-25-21,  with the title “Strong climate legislation needed to ReEnergize America” and with some small differences.

Editor:

With new political leadership in Washington, it is near certain that Congress will address the climate crisis during this session.  It is likely that it will adopt legislation of some kind.  The question now is what kind of legislation it will be.

Many agree, probably most, that we need to slow the emission of carbon dioxide (CO2) and other greenhouse gases to near zero by 2050, and by doing this slow global warming, climate change, sea level rise, and ocean acidification.  Most important will be to stop almost all burning of fossil fuels and the consequent production of CO2.

We will need to reduce our carbon footprints by learning how to use less energy and by switching to non-fossil, clean energy.  I call this the program to ReEnergize America.

There is less agreement on how to proceed.  People divide roughly into two camps:  those who prefer action from the top down, in the form of government regulations, and those who prefer action from the bottom up, using mechanisms of the free market.

I am a member of the Citizens’ Climate Lobby.  We are bottom-up people and propose a system of carbon fee and dividend (CFD).  This will put gradually rising fees on all fossil fuels, divide the fee revenue into equal shares, and each month send one dividend share to each adult and one half share to each child.

This proposal is sometimes characterized as a revenue-neutral price on carbon.  It has several attractive features.

• It is simple and can be implemented quickly at relatively low cost.
• Rising prices on fossil fuels will send price signals throughout the economy and encourage conservation of energy and moves to clean energy. Millions of decisions on how to do this will be made by actors in the private sector.
• The business community will see opportunities and work to provide products and services to help this transition.
• The Apollo space program in the 60s and 70s produced new technologies and new jobs. ReEnergize America will do this again.
• Because dividends will be distributed equally, and because low income households have relatively small carbon footprints, the dividends they receive will be greater than the price increases for the things they buy. CFD will be fair.
• By our actions and purchase decisions each of us can participate in the program to ReEnergize America. And we all can watch and applaud as we drive our national CO2 emissions towards zero.

Consider the example of energy consumed in homes.  This is about 12% of the total for our national economy.  Top-down advocates will try to reduce energy use by stricter regulations for insulation, heating and cooling equipment, and appliances.

The system of CFD will put funds in the hands of individual households.  They can use them and work with local contractors and suppliers to find the best ways to reduce energy consumption in their homes.

CFD was the basis for the Energy Innovation and Carbon Dividend Act that was introduced in the House in the last session.  It had 86 co-sponsors, including our District 7 Congressman Tom Malinowski and three others from NJ.

For a climate strategy to be successful over the long term, it must have bipartisan support, both in the short term and in the long term.  With the closely divided House and Senate, passage of legislation will require support from both sides.

Supporting a bottom-up strategy with carbon pricing are people like businessman Bill Gates, investor Warren Buffet, former Secretary of Treasury and State George Shultz (whom we lost two weeks ago), current Secretary of Treasury Janet Yellin, virtually all economists, and organizations like ExxonMobil and the U.S. Chamber of Commerce.

There is also, however, strong support for a top-down strategy, principally on the Democratic left.  I believe that it will be possible for moderate Democrats to reach across the aisle and find sufficient Republican support to adopt climate legislation using a bottom-up strategy.  But our members of Congress need to know that this is what we want them to do.

I urge all readers–both Democrats and Republicans–to contact their senators and representatives and ask them to enact strong climate legislation in this session.  Legislation that will incorporate a revenue-neutral, carbon pricing system like CFD, and that will put us on a path towards zero CO2 emissions by 2050.

Bill Allen    02-18-21