Carbon Fee and Cap and Trade

A carbon fee and dividend or climate income is a system to reduce GHG emission, and it imposes a carbon tax on the sale of fossil fuels, and then distributes the revenue of this tax over the entire population (equally, on a per-person basis) as a monthly income or regular payment.

Since the adoption of the system in Canada and Switzerland, it has gained increased interest worldwide as a cross-sector and socially just approach to reducing emissions and tackling Climate Crisis.

Rep. Ted Deutch (D-FL-22) reintroduced the HR 2307 Energy Innovation and Carbon Dividend Act today with 28 cosponsors. The bill would place a rising fee on carbon pollution that will get America to net zero emissions by 2050. Revenue from the fee would be distributed evenly to all Americans as monthly payments.

How does it work?

Carbon Fee: This policy puts a fee on fossil fuels like coal, oil, and gas. It starts low, and grows over time. It will drive down carbon pollution because energy companies, industries, and consumers will move toward cleaner, cheaper options.

Carbon Dividend: The money collected from the carbon fee is allocated in equal shares every month to the American people to spend as they see fit. Program costs are paid from the fees collected. The government does not keep any of the money from the carbon fee.

Border Carbon Adjustment: To protect U.S. manufacturers and jobs, imported goods will be assessed a border carbon adjustment, and goods exported from the United States will receive a refund under this policy.

Section by section analysis of the Energy Innovation and Carbon Dividend Act

For more information, please visit EnergyInnovationAct.org.