The costs of gas and electricity have been ratcheting up in recent years, becoming a larger burden on family budgets.
So, opening our April utility bills brought a pleasant surprise.
The Southern California Edison bill came with an $86 credit; Southern California Gas posted a $73 credit.
Even better, another $86 credit will appear on our October Edison bill and, for the foreseeable future, we can expect similar credits twice a year, in April and October.
These direct credits are part of the California Climate Credit program, which aims to offset rising utility prices for households while reducing the state’s reliance on fossil fuels.
The money for this program comes from California’s Cap-and-Trade Program, which sets an annually decreasing limit (cap) on total allowable pollution generated from large polluters (power plants, fossil fuel providers and large industrial facilities).
It calculates the number of pollution allowances not to exceed the cap and auctions them off to the polluting companies.
This process effectively reduces emissions, makes the polluters pay for their carbon pollution, and raises money to fund programs that help California make the transition away from fossil fuels to a clean energy.
Cap-and-Trade was created from legislation passed in 2006: Assembly Bill 32, the Global Warming Solutions Act. Its goal was to lower California’s greenhouse gas emissions to 1990 levels by 2020.
In 2016 that goal was achieved, the program was extended to 2030, and a new goal to reduce greenhouse gases by another 40% below the 2020 goal was set.
Despite its success, however, Cap-and-Trade does not provide the best model for state or nationwide climate legislation.
The program requires a large administrative infrastructure with cumbersome regulations that would expand government and thus be unattractive to Republicans.
It also fails to affect secondary consumption, that is, the carbon pollution generated offshore for goods we import and consume.
Further, its use of pollution offsets, such as reforestation projects in the Amazon or sequestering carbon in agricultural soil, is easily corrupted by polluting companies.
In recent years a better method of pricing pollution has emerged. It’s called “carbon fee and dividend.”’
A fee on the carbon pollution content of each ton of coal, oil or gas is collected directly from fossil fuel companies at the well, mine or port of entry.
This plan is far more transparent, covers the whole economy and prevents cheating.
The fee would start low at $15 per ton and increase steadily by $10 annually.
Within a decade, clean energy would become much cheaper than fossil fuels, giving investors and entrepreneurs an incentive to back clean energy development.
Instead of adding to government coffers, the revenue collected from carbon pollution fees would be held in a trust account and distributed equally as cash rebates to all American households, effectively offsetting increasing energy costs of goods and services.
This approach delivers economic justice to low- and middle-income families whose dividends would more than offset increased prices of products derived from fossil fuels.
The fee and dividend plan also includes a border adjustment mechanism to apply the fee as a tariff on the carbon content of imports.
Countries without comparable carbon pollution policies would be required to pay the U.S. fee.
This feature protects American businesses and incentivizes foreign governments, including China, to implement their own carbon pricing policies.
Rep. Salud Carbajal, D-Santa Barbara, introduced a carbon fee and dividend bill into Congress last year.
This legislation, he says, will spur the transition from fossil fuels to a clean energy future while protecting vulnerable American households, adding thousands of clean energy jobs, and growing the economy.
Carbajal contends the proposed legislation, House Resolution 5744, the Energy Innovation and Carbon Dividend Act, would reduce emissions 50% by 2030 and reach 100% reduction of net emissions by 2050.
The fee and dividend approach is highly recommended by scientists, economists, political leaders, national health organizations and religious leaders.
There is broad agreement that this approach is the single most effective policy to reduce carbon pollution, phase out fossil fuels, and transition to a clean energy future, at the scale and speed required.
When we see climate credits appearing on our utility bills, let’s remember that these funds are not coming from Edison’s benevolence, nor do they come from our tax dollars.
They come directly from fees collected from coal, oil and gas companies whose products are harming our health and devastating our climate.
Those credits are a vital part of programs to reduce our reliance on fossil fuels, make the polluters pay for the harm their products are causing, and redirect those revenues to help households cope with the transition to clean energy.
Carbajal is leading the way with climate legislation. We need to support his efforts as well as find ways to become a part of the solution.
At home, we can become more energy efficient, improve insulation, install solar panels, add LED lighting and replace gas appliances with electric.
When possible, we can leave the gasoline car behind, take the bus or walk. We can invest in a hybrid or fully electric car.
All of us will need to do our part. The goal could not be more important or urgent: to achieve a healthy livable world for ourselves, our children and future generations.
