Cantwell-Collins Cap-and-Dividend Climate Legislation

U.S. Senators Maria Cantwell (D-WA), left, and Susan Collins (R-ME), right, introduced bipartisan legislation to reduce global warming pollution, spur job growth in clean energy technology, and return money directly to consumers on December 11, 2009. The Cantwell-Collins Carbon Limits and Energy for America's Renewal (CLEAR) Act (S. 2877) would set up a mechanism for selling “carbon shares” to fuel producers and would return most of the resulting revenue in checks to every American. The legislation will achieve a reduction in greenhouse gas emissions of 20 percent by 2020 and 83 percent by 2050.

The Center does not support auctioning allowances.

Along with the legislation, Cantwell issued a report today detailing the positive economic impact of the dividends to be returned directly to consumers. According to the report, a typical family of four would receive tax-free monthly checks from the government averaging $1,100 per year, or $21,000 between 2012 and 2030.

Cantwell and Collins highlighted the findings of a recent report by the Institute for Policy Integrity at New York University School of Law that concluded: “carbon pricing is the only signal that can cut through the noise and direct diverse economic actors towards smart, green investments – investments that will create jobs, encourage technological development, and maximize returns.”

By establishing a predictable price on the carbon associated with fossil fuels, the bill provides the business incentive needed to develop and deploy clean energy technology. The International Atomic Energy Agency estimates that over the next half-century, the investment needed to meet global energy needs and reduce greenhouse gas emissions will reach $45 trillion.

Producers would bid in monthly auctions for “carbon shares.” The resulting revenue generated by the auctions is used for two vital functions:

~ 75 percent would be refunded to every individual residing legally in the United States. This dividend would more than compensate for the increase in carbon-based fuel that producers would pass on to consumers.

~ The remaining 25 percent would be used exclusively toward clean energy research and development, regionally-specific assistance for communities and workers transitioning to a clean energy economy, energy efficiency programs, and reductions in non-CO2 greenhouse gases.

For more background information on the CLEAR Act and a copy of the report on the dividend economic impact, consult Senator Cantwell’s web site and see the legislative descriptions:

One Page Summary

Detailed description

Legislative Text

[See also Grist discussion]