Admittedly, it's a long shot that Rep. Pete Stark's (D-CA) Save Our Climate Act of 2011, introduced Monday, will ever make it out of committee, but having been a Mets fan in 1969, I do believe in miracles.
If nothing else, Stark's bill reopens the conversation that abruptly ceased after the 2010 mid-term election about climate change and how best to address it. Rather than nibbling at the edges with a regulation here and a higher fuel efficiency standard there -- good things, for sure, but insufficient to tackle the problem -- Stark's bill goes right to the heart of the problem: The need to put a price on carbon that weans our nation off fossil fuels and reduces the greenhouse gases that are altering the Earth's climate.
Remarkably simple at 18 pages, the Save Our Climate Act calls for a tax starting at $10 per ton on the carbon dioxide that a fuel would emit when burned. The tax would be imposed at the first point of sale -- at the mine, well or port of entry. Each year, it would increase by $10 a ton, sending a clear predictable price signal to the investment community that wind, solar and other alternative sources of energy will be a smart bet.
Underscoring the importance of a clear price signal on carbon is the recent 2011 Global Investor Statement on Climate. Representing 285 investors holding assets of $20 trillion, the statement concluded:
"Private investment can and must play a critical role in addressing the risks and opportunities posed by climate change. However, private sector investment will only flow at the scale and pace necessary if it is supported by clear, credible and long-term domestic and international policy frameworks -- "investment-grade climate change and energy policies" -- that shift the balance in favour of low-carbon investment opportunities."
If enacted, Stark's bill would generate massive amounts of revenue, a tantalizing prospect in cash-strapped Washington. But rather than spend the money on a plethora of pet projects or sops to the fossil fuel industry, the Save Our Climate Act would divvy up most of the revenue and return it to American consumers as an annual payment. The "dividend" from the carbon tax would therefore offset rising energy costs that households will experience from the carbon tax. And the more people do to reduce their carbon footprint -- increasing energy efficiency, driving electric or hybrid vehicles -- the more dividend they get to keep.
As I said, "most" of the revenue would be returned to households. The legislation will take a small portion of the money to pay down the national debt. The Carbon Tax Center estimates that in 10 years time this would eliminate close to half a trillion dollars of our nation's $15 trillion debt. In the second year of the tax, $10 per ton would go to debt reduction and be applied to that purpose in subsequent years. The amount returning to households would continue to rise as the tax increases each year. In 10 years time, when the tax reaches $100 per ton, $10 of every $100 would be devoted to debt reduction and $90 would be given back to consumers. At that point, the Carbon Tax Center estimates the average annual dividend would be $1,170.
The timing of Stark's bill appears propitious, as the campaign to stop the Keystone XL pipeline has re-energized the anti-carbon fuel movement. The turning point for that campaign occurred around Labor Day with the arrest of more than 1,200 peaceful protestors outside the White House calling for Obama to reject the pipeline. The campaign, spearheaded by 350.org's Bill McKibben, has galvanized support throughout the environmental community, making it harder and harder for the administration to say "yes" to TransCanada. Those efforts will culminate in a protest on Nov. 6, where thousands of people are expected to circle the White House.
Stopping Keystone XL, of course, is only the beginning. It will temporarily curtail the supply of oil, but not our insatiable thirst. To preserve a livable world, we must also reduce demand for fossil fuels, and the best way to reduce demand is to increase the price. If the people who responded to the call to action on Keystone XL expend a similar effort to support Stark's bill, there may be hope for us yet.