The Solution

Co-chaired by former Senators John Breaux and Trent Lott, Americans for Carbon Dividends is an industry-backed education and advocacy campaign to build support for the Baker-Shultz Carbon Dividends Plan. The Baker-Shultz plan is based on the conservative principles of free markets and limited government, and offers the most popular, equitable and politically viable climate solution.


The Four Pillars of the Baker-Shultz Carbon Dividends Plan


I. A Gradually Rising Carbon Fee

The first pillar of a carbon dividends plan is a gradually rising and revenue-neutral fee on carbon dioxide emissions, to be implemented at the refinery or the first point where fossil fuels enter the economy, meaning the mine, well or port. Economists are nearly unanimous in their belief that a carbon fee is the most efficient and effective way to reduce carbon emissions. A sensible carbon fee might begin at $40 a ton and increase steadily over time, sending a powerful signal to businesses and consumers, while generating revenue to reward Americans for decreasing their collective carbon footprint.

II. Carbon Dividends for All Americans

All the proceeds from this carbon fee would be returned to the American people on an equal and monthly basis via dividend checks, direct deposits or contributions to their individual retirement accounts. In the example above, a family of four would receive approximately $2,000 in carbon dividend payments in the first year. This amount would grow over time as the carbon fee rate increases, creating a positive feedback loop: the more the climate is protected, the greater the individual dividend payments to all Americans. The Social Security Administration should administer this program, with eligibility for dividends based on a valid social security number.

III. Border Carbon Adjustments

Border adjustments for the carbon content of both imports and exports would protect American competitiveness and punish free-riding by other nations, thereby encouraging them to adopt carbon pricing of their own. Exports to countries without comparable carbon pricing systems would receive rebates for carbon fee paid, while imports from such countries would face fees on the carbon content of their products. Proceeds from such fees would benefit the American people in the form of larger carbon dividends. Other trade remedies could also be used to encourage our trading partners to adopt comparable carbon pricing.

IV. Significant Regulatory Simplification

The final pillar is the elimination of regulations that are no longer necessary upon the enactment of a rising carbon fee whose longevity is secured by the popularity of dividends. Much of the EPA’s regulatory authority over carbon dioxide emissions would be phased out, including an outright repeal of the Clean Power Plan. Robust carbon fees would also make possible protecting companies from federal and state tort liability for historic emissions. To build and sustain a bipartisan consensus for a regulatory simplification of this magnitude, the initial carbon fee rate should be set to exceed the emissions reductions of current regulations.


The Baker-Shultz Carbon Dividends Plan is: