Costs And Benefits Of The Primary Cost

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COSTS AND BENEFITS The primary cost is increased energy costs. For example, gas prices will be raised 15 cents per gallon the first year, and 10 cents each year afterwards. However, some households who minimize their fossil fuel consumption will actually turn a profit from the monthly dividend, which will encourage further reduction in fossil fuel use. Estimates show that about 2/3 of all households would break even or receive more in their dividend checks, which helps to protect the poor and middle class (“Carbon Fee and Dividend” 2015). Critics of this plan have highlighted the burden on farmers, because they rely heavily on fossil fuels to power machinery and produce fertilizers. While this is true, climate change would impose a much greater cost than the carbon fee. A 2008 report by the USDA established that climate change would lead to widespread crop failure, northern migration of weeds, increased disease pressure, a reduction in livestock production, increased drought, increased flooding, and strained resources (USDA 2008). This would lead to millions of dollars in damage and would severely threaten the livelihood of farmers and US food production. By contrast, farmers can actually benefit financially from a carbon fee program. The Union of Concerned Scientists highlight the potential for farmers to lease their land for wind turbines, or turn unproductive land into solar farms (Union of Concerned Scientists 2015). Another potential drawback of a carbon fee would be the risk of damage to the economy. Analysis by the Congressional Budget Office showed that the potential economic impact of carbon fees varies, depending on the details of the program (Congressional Budget Office 2013). The CBO report highlights that even with... ... middle of paper ... ...ue neutral so as to not violate the ‘no new taxes’ pledge (Epstein 2012). Several Republicans have indicated support for a fee and dividend program, including William Ruckelshaus, Lee Thomas, William Reilly, Christine Whitman, George Shultz, and Richard Burr (Carr 2014). The REMI report finds that “A strong economy and environmental quality are not mutually exclusive propositions from each other. In fact, when understood as tax reform, environmental policies can have positive effects on the economy [thus removing] the “infernal tradeoff” between two priorities” (Nystrom and Luckow 2015). While rallying the necessary political will, getting Republicans on board, and fighting off the fossil fuel lobby is no easy task, I believe that a carbon fee and dividend has a remarkably high level of political feasibility in proportion to its impact on mitigating climate change.
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