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A lot happened this past week. Climate strikes, a presidential impeachment inquiry, rejection emails from various companies regarding my applications, and most importantly, my first Citizen’s Climate Lobby (CCL) meeting. If you don’t know what the CCL is, it is a non-profit, nonpartisan, grassroots advocacy organization focused on national policies to address climate change. And in the meeting, we discussed national policies and what we can do on the local level to raise awareness.
So here’s my stab at making you aware.
Energy Innovation & Carbon Dividend Act
Now if you didn’t know, there is a legislative solution that pushes for a carbon fee, carbon dividend, border carbon and regulatory adjustment. It is called the Energy Innovation and Carbon Dividend Act and on today’s newsletter, I am going to focus on a very specific part of the Act: the carbon fee AKA carbon pricing. It is the idea that we, as a society, need to tax carbon emissions because the emitters of greenhouse gases are not facing the full social cost of their actions.
British economist Arthur Pigou
From an economic perspective, the carbon tax is known as a Pigovian tax, a tax recommended back in 1920 by British economist Arthur Pigou, on any market activity that generates negative externalities. In English, that means it is a tax on anything that has negative side effects.
The carbon tax proposed in the Energy Innovation & Carbon Dividend Act puts a fee on fossil fuels like coal, oil, and gas and this fee increases over time. Currently, there are 40 countries that have implemented this tax and it is working e.g. Britain. Unfortunately in the US, Congress remains stuck on climate policy and it’s pretty clear where the current White House Administration is aiming to take it.