Posted
July 1, 2009

Scientific American Endorses Cap and Dividend

Although not part of legislation recently passed in the U.S. House, this idea remains the most pragmatic approach to curbing global warming

The U.S. House of Representatives narrowly passed the first-ever federal bill to address global warming, which establishes a Cap-and-Trade policy that sets a limit on overall carbon emissions and gives companies the chance to buy and sell the rights to pollute. This legislation, the Waxman-Markey Bill, now awaits action in the Senate.

Some Democratic Congress members oppose the bill because it would hand over 85 percent of the pollution permits absolutely free to energy companies, and it would result in higher energy costs for everyday Americans.

There is an alternative bill, sponsored by key House leader Chris Van Hollen (D-Maryland), which would minimize those problems. The Cap-and-Dividend approach in this bill is similar to Cap-and-Trade in curbing pollution, but it requires companies to pay for pollution permits with the resulting revenues being returned as a rebate to every U.S. citizen on an equal basis. That would help low- and middle-income households deal with rising energy costs.

Cap-and-Dividend uses a commons-oriented approach based on the idea that sky belongs to everyone and private companies should not be allowed to pollute it for free. The idea was developed by Peter Barnes, an energy and financial entrepreneur who is cofounder of OnTheCommons.

Cap-and-Dividend has gained some influential supporters recently, including the Washington Post editorial page, California governor Arnold Schwarzenegger, leading environmentalist Bill McKibben and, most recently, the editors at Scientific American.

After careful study of climate change legislation, the authoritative science journal editorialized, “We urge Congress to set a cap on fossil-fuel production…and send the proceeds back to the taxpayer.”

That is the fairest way to curb carbon emission, and it will prove more politically popular over the long run than penalizing average American families while enriching the companies that cause global warming in the first place.