Policy Update: Cap-and-Dividend Legislation Introduced in Congress

For the first time in eight years, a federal carbon cap program is back on the table. This past Monday Senator Chris Van Hollen (D-MD) and Representative Don Beyer (D-VA) introduced The Healthy Climate and Family Security Act of 2018, a cap-and-dividend program that would set a nationwide cap on emissions, charge our country’s worst polluters, and give funds back to all Americans.
The bill was announced on a conference call with Mike Tidwell of Chesapeake Climate Action Network, as well as Reverend Lennox Yearwood of the Hip Hop Caucus, a grassroots organization that promotes political activism through hip-hop culture. The messaging around this bill is clear – it is “simple, fair, and built to last.”

The Bill:

  • Sets a gradually diminishing cap to reduce emissions by 20% in 2020, 40% in 2030, and 80% in 2050 (compared to 2005 levels)
  • Auctions off permits to the first sellers of oil, coal, and natural gas, through the Department of Treasury
  • Distributes proceeds quarterly to every lawful resident with a valid Social Security number
  • Designs permit structure similar to established cap-and-trade programs such as California and Regional Greenhouse Gas Initiative
  • Allows trading of permits between firms and/or saving permits for future years. A portion of permits are reserved for price stability.
  • Does not allow the use of offsets – companies must pay in full for their greenhouse gas emissions.

A federal carbon cap has not been proposed since The American Clean Energy and Security Act of 2009, which passed the House but not the Senate. However, the current bill’s co-authors are hopeful that by rebating 100% of funds to homeowners, the legislation can find renewed bipartisan support. And while the current body and Administration may not support carbon pricing policy, Van Hollen is hopeful that the political winds will shift in upcoming seat changes.

Both Sen. Van Hollen and Rep. Beyer also addressed the common concerns associated with carbon pricing programs, namely how to ensure working families don’t end up footing the bill. According to their analysis, between 70 and 80 percent of all households will come out ahead or even, meaning that the quarterly rebate will exceed increased fuel prices from the program. “By turning it into a dividend, folks on the lowest end of the economic scale actually benefit most,” noted Rep. Beyer.

So, if this bill is unlikely to pass in the current governmental body, what is our path forward? “Lay the groundwork and build momentum around a proposal that will be well-supported,” states Sen. Van Hollen. “The key is to make sure we come together,” adds in Rep. Beyer. While there are design differences between cap-and-dividend, cap-and-trade, and carbon tax, climate change advocates cannot afford to splinter into factions over granularity.

Fortunately, nationwide support for a federal carbon cap bill is building at all levels. Sen. Van Hollen highlighted the support of several prominent Republicans and corporate CEOs, including Exelon and Exxonmobil, for market-based climate policy. The bill has clear appeal to working and middle class families due to its simplicity and financial returns. Reverend Lennox Yearwood was featured on the call to assert that “indigenous and colored communities are a part of this conversation. They have to be part of the solution in order to make this equitable.”

Whether or not this bill succeeds depends on whether it can build and maintain the universal support that it strives for. While the EPA and Clean Power Plan continue to crumble under the current Administration, Sen. Van Hollen emphasizes that the cost of doing nothing is rising every day. If you want to sign the petition or get involved in other ways, you can visit CCAN’s website to learn more.

Jonah is currently a Masters candidate of Sociology at Northeastern University, where he completed his Bachelors. He developed an appreciation for the environment at a young age, growing up on Lake Massapoag in Sharon, MA. He recently held multiple positions at Oxfam America as a grasstops and grassroots organizer, prior to which he served as an outreach coordinator for the Mass Save program. His academic expertise includes renewable energy policy, urban development, and gerrymandering. In his spare time, Jonah enjoys playing/coaching Ultimate Frisbee, traveling, and eating food he can’t afford.