By: Don Matheson

Don Matheson — Thu, 30 Apr 2026 07:23:39 +0000

A couple points on the comments by Mr Colbath and Mr. Rauch:
I share fear that, “anything that can be characterized as a tax on consumers is political suicide.” Hence, the care to call it “Fee and Dividend.” One of the well-known conservatives who supports this strategy is George Shultz, who has said, “If the government doesn’t keep the money, it isn’t a tax. It is a fee.” I’m not naive, and I know the Republicans will call it a tax anyway, but it is important that we who support it do the best we can to make that distinction. These bills remove no money from the private economy to be spent by the government. They are strictly market based, the holy grail for Republicans. The bills have been carefully designed to avoid waving that red flag at the Grover Norquists of the world.
The numbers from the recent IPCC report and the 4th Climate Assessment, very well described in David Posnett’s most recent post, render the fear of “political” suicide somewhat trivial in my view. They make clear that we are, practically speaking, either already beyond salvation or on the hairy edge. Bill McKibben is fond of saying, “Winning late on climate change is the same as losing.” I’ve been working with Citizens Climate Lobby (CCL) for several years now, and the assessments just keep getting worse. Just today I saw the latest from Science magazine that, yes, the ocean has been warming 3 times faster than recently reported by IPCC, and are in line with the models from several years ago… the models that skeptics have been sneering at for years. We either win this battle very quickly or it may well be game over. So, in my view, we must take the risk and fight to push one of these bills to fruition.
I agree it is beyond comprehension that Trump would sign it, but it takes time to build support for something like this in congress, and I can only pray that Trump will be gone by the time it would actually come to a vote. In the last congress, 50 plus Republicans had joined the Climate Solutions Caucus. (Some retired or lost, so not sure what the number is now.) I’m sure there are more lurking who will step forward as the news has been more clear on this issue this year than ever before. At least it is possible… remember how fast the tide turned on gay marriage, and how the Republicans who were screaming kill Obamacare backed off once they realized their constituents were for it.
The version of Fee and Dividend CCL has been advocating was intentionally kept very simple; much like the House version. While many of us would like to see the improvements made in the Senate Bill and much more, the more progressive enhancements we put into it, the less likely it will pass. We must get a significant number of Republicans to sign on, or it will never pass. The REMI Study (see below) also predicts it will increase GNP and add jobs, so there are no losers except the fossil fuel purveyors. Government finger-on-the-scale moves to make it more progressive will be red meat for Republicans, so I would urge caution. The simple version projects to 40% reduction of fossil emissions in 12 years, other things being equal, and that would be a miracle versus where we are now.
As to skepticism about whether the poor and middle class will be kept whole by the dividend, on the CCL website you could find a major study done by Regional Economic Models, Inc, (REMI Study)(a recognized consulting firm with no skin in the game… they work for governments and even the American Petroleum Institute) Their calculations predict that families up to 65th percentile in economic status will get as much or more back than their increase in cost of living. The most poor use very little fossil fuel, and for them it will be major increase in income. (this the economic stimulus, putting money in hands that will spend it.) That is in line with climate justice, as they have no wherewithal to control the lives they lead, and are bearing the brunt of the excesses of others. The higher up the income scale one goes, the more access one has to make less polluting choices. Starting with only $15/ton of emissions gives people time to react.
When one considers how top heavy income is in the country, it becomes easier to understand that the folks living in large houses and multiple houses and flying many times a years are the ones who will pay the lion’s share of the fees, which will be embedded in everything that is bought, as there is nothing, no product, that won’t carry some degree of fossil influence in the manufacturing and transportation and marketing, and since the fee happens at the mine or wellhead, everything will be impacted. (Far more all encompassing than cap and trade, and no new bureaucracy to administer it… another republican gold star.)
Therein lies the real impact of the strategy. Companies who have ignored fuel costs for processes and buildings and transportation as a level playing field will be looking five years out and realizing if they don’t do everything they can to minimize that cost as its steady increase is guaranteed will have competitive incentive to minimize that cost. States will have an incentive to push utility companies to use renewables, or lose business to states that do. (Iowa, of all places, is expected to hit 40% of its state electrical grid powered by wind this year. They won’t be paying much in fossil fuel fees, so that will be a lure for businesses that need lots of electricity.)

By: David

David — Thu, 30 Apr 2026 07:23:39 +0000

Thanks Don. This is great and very comprehensive.

Comments on: Carbon Dividends: 2 New Proposals

By: Don Matheson

By: David