Obama’s “cap-and-dividend” Road to Copenhagen

There is considerable debate about the form which a cap and a price signal should take — in recent weeks a carbon tax has even been a topic of renewed discussion. None of the options is perfect, but one of them is rising as a preferred choice because it protects low-and middle-income families from rising energy prices.



Peter Barnes, senior fellow at the Tomales Bay Institute

It’s called “cap-and-dividend.” Under this program, permits to pollute the air with greenhouse gases would be auctioned and the proceeds returned to citizens. The extra income, which should be targeted especially to the poor, will protect the most vulnerable American families from rising energy prices and will help build a long-term constituency for climate action. In the present economic crisis, the prospect of sending monthly dividend checks to families is a political winner. It makes a cap-and-dividend plan largely immune from criticism that it will be costly to the public, and it increases the chances of passage this year.


GHG Emission Simulator