Ken Richards. Courtesy photo
IU professor Ken Richards thinks there’s a better way to move U.S. companies away from fossil fuels than the strategy advanced by the Citizens' Climate Lobby.
That group is encouraging Congress to approve its plan to implement a fee on the carbon dioxide emission content of fossil fuels and give the revenue from the fee back to American households in the form of a dividend.
It’s a concept different from the carbon allowance auctions that are now used in the United States to regulate greenhouse gases. The auctions allow companies that create greenhouse gases to pay for their emissions. If they have fewer emissions, they can sell their allowances; if they use more, they can purchase allowances from others. The process allows the market to work out the price of the allowances, Richards said.
“The question is, how much of a difference does it make?” said Richards, a professor of environmental economics and policy with IU’s School of Public and Environmental Affairs, who met recently with members of the local chapter of the climate lobby to discuss fees, dividends and the economy.
He explained that with allowance auctions, the government sets the number of allowances. Each year, that number is lowered, thus reducing carbon emissions. In the Citizens’ Climate Lobby carbon fee proposal, the government instead sets the price of carbon dioxide emissions.
After meeting with the Citizens’ Climate Lobby members, Richards said he thought it was “one of the most thoughtful groups working on climate change. I agree with far more than I disagree.”
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