What problem does it solve? • Responds to climate change by triggering a much faster transition to a low carbon energy (like wind and solar) and transportation systems (like electric vehicles) • Boosts the economy by creating green jobs and avoiding health care costs caused by fossil fuel pollution • Reduces the Cost of State Government by eliminating multiple state programs and subsidies that become superfluous as carbon fees and dividends achieve carbon emission reductions faster and cheaper than existing frameworks What is your solution and who does it apply to? The strongest action New Jersey can take to respond to climate change is to unleash market forces with a carbon fee and dividend program. On behalf of the State of New Jersey, I request authorization to initiate and lead a coalition of other willing states (and provinces?) to institute a fee on the carbon content of fuels, including oil, gasoline, natural gas, coal, or products derived from those fuels. The fee would apply to producers or importers of carbon-containing fuels. Monies generated by the carbon fee would be rebated back to the public and/or used for carbon reduction projects. In exchange for the carbon fee, a large basket of “green” programs would become superfluous and could be eliminated. The initial carbon fee would be in the range of $25 to $35 per ton, and rise at a rate of about $5 per ton per year until climate goals are met. The program would be replaced by a national program, if and when a comparable national program is created. What is the anticipated impact? Carbon fees and dividends will have a positive transformation impact on the environment and the economy. Market forces will drive innovation to reduce carbon emissions quickly and efficiently. Carbon fees increase the price of highly polluting fuels, rendering cleaner fuels (like offshore wind and solar) and transportation systems (like electric vehicles) relatively less expensive, accelerating their growth. Green jobs would be created to implement these projects. Health care costs would be reduced because the air quality would improve. The carbon dividend could put money directly into people’s pockets, and/or finance carbon reduction projects. The cost of state government would go down substantially, because multiple state programs become unnecessary when carbon pricing achieves goals faster and cheaper. The following “green” subsidies/programs are examples of what potentially could be eliminated: ZECs, SRECs, ORECs, RECs, RGGI, and numerous BPU’s Clean Energy Program grants.
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