Carbon Fee and Dividend: Legislative Action Needed
Sen. Jerry Moran, R-Kan., was certainly right when he told a group of energy executives that cheap energy was necessary for our economy to be competitive and that legislation is needed to keep energy costs low (Wichita Eagle, Oct. 1 Business).
Fossil fuels provide cheap energy because they do not pay their external costs, which include cost to people’s health, the environment, and to the economy. Renewable energy is becoming less expensive and does not have the external costs that fossil fuels do.
The best solution is legislation that would favor a shift to renewable energy.
The effect of rising energy costs on the economy could be offset by a carbon fee and dividend system, in which a fee would be added to fossil fuels at the source to cover their external costs. All the money collected would be distributed equally to every household as an energy dividend. Those who switch to renewable energy or who save energy would have more to spend, which would stimulate the economy.
We should all hope that the legislation that Senator Moran is considering would be a carbon fee and dividend system, as it uses market principles to reduce air and water pollution while protecting the economy from rising energy costs.
(c) 2016 – J.C. Moore