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The U.S. is facing multiple challenges: increasing levels of poverty, greater economic and social inequity, an unaffordable housing crisis, large/growing government deficits, and the underlying threat multiplier of climate chaos with its immediately obvious multibillion dollar weather disasters including hurricanes, tornados, fires, and floods.

Longer-term damage includes biodiversity loss, coral reef destruction, ocean acidification, melting ice sheets and rising sea levels. Everyone in Hawaii is already being adversely affected to some degree or other. Hawaii must play a role in addressing these statewide and nationwide problems.

The Hawaii State House responded by passing resolution urging the Federal government to adopt a national Carbon Fee and Dividend policy.

While it seems daunting to simultaneously tackle all these challenges, it must be done for the health of our planet, the people, and our government. The single most effective solution, one of many, that will directly address these challenges is a carbon fee and dividend policy.

Without burdensome rules and regulations, without increasing the national debt, and while protecting the purchasing power of lower income folks, a fee or tax on fossil fuel emissions can accomplish much:

• help achieve net zero carbon emissions by 2050, and a 50% reduction by 2030;
• encourage increased production of affordable clean energy;
• put money in people’s pockets via a monthly dividend payment; and
• save tens of thousands of lives by reducing fossil-fuel particulate air pollution.

The policy is simple to implement and impactful. A carbon fee and dividend charges polluters a fee for the damage their carbon pollution does to our environment. The money collected from the carbon fee goes to the American people in the form of a monthly payment to use as they choose.

CFD And Action On Climate

Over 3,600 economists, including 28 Nobel laureates and 15 former chairs of the Council of Economic Advisers, view it as the most effective policy to address climate change. 

The economists’ with, “A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.” 

A fee on carbon allows us fossil fuels by incorporating into their price the true cost of their environmental impact, including local air pollution, sea level rise, weather extremes, and coral bleaching.

Sure, fossil fuel companies can pay the fee and keep polluting, but their impacts are now very public.
Including the costs that fossil fuels impose on the environment and our health complements and strengthens existing policies that address these issues.

A CFD levels the playing field by no longer allowing fossil fuels to avoid the hidden costs that arise from their use. Correcting this existing market failure will incentivize consumers and businesses to increase energy efficiency and adopt cleaner technologies.

CFD And Social Equity

The Economists’ statement concludes: “To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. Most American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.”

The policy is equitable because each adult receives the same dividend or rebate, which means each adult is given the same rights to or benefits of the environment. Carbon emissions result from the production of almost all goods and services.

Since the consumption of goods and services increases with income, the more income one has, the more emissions one emits and hence the more one pays in fees. Therefore, in general, wealthier people will pay more in fees than poorer people.

But since everyone receives the same dividends, lower income people fare better than higher income people. A study done by Ummel finds that 96% of the lowest income households would benefit financially from this policy. 

CFD Can Use Existing Programs 

A carbon fee and dividend would take advantage of many existing government programs so as to minimize the cost of implementation. The government currently tracks the production of fossil fuels and taxes them so existing accounting could be used to levy fees on fossil fuels in accordance with their carbon content. 

As for distributing the revenues to people, the government can take advantage of many of the institutions that already distribute money to people such as the Department of Treasury.

In addition, because of the CARES Act, the government has experience distributing money to all households below a certain income threshold.

Hawaii Can Lead The Way

Hawaii declared a climate emergency in 2021 (), a recognition of the threat of global warming and the need for urgent effective action. Unfortunately,  we’re experiencing increasingly egregious climate impacts every year. We need to act now in every way possible to mitigate the emergency by lowering emissions and health-impacting pollution!  

The Hawaii House voted 49 to 1 to adopt and , urging “the U.S. Congress to adopt national carbon fee and dividend legislation.”

Passing this resolution would send a message that Hawaii is in support of carbon pricing. It would magnify the support offered by Sen. Brian Schatz, who has introduced bills supporting carbon pricing, and former Rep. Kai Kahele, a co-sponsor of a carbon fee and dividend house bill, which had 95 cosponsors in the 117th Congress.

We owe today’s youth and future generations a livable planet and an equitable society. We can achieve this by enacting policies that protect the planet and the most vulnerable. A carbon fee and dividend policy will help us achieve this.

Editor’s note: Helen Cox, chair of the Kauai Climate Action Coalition and co-lead of Kauai Citizens’ Climate Lobby; Bobbie Best, co-lead of Maui Citizens’ Climate Lobby; and Matthew Geyer, founding member of Hawaii Environmental Change Agents, also co-authored this Community Voice.