A cap-and-dividend way to a cleaner nation and more jobs

By Maria Cantwell and Susan Collins
Friday, June 18, 2010

There has been much talk recently about whether Republicans and Democrats in Washington can produce a bipartisan clean-energy and jobs bill. The answer is: We already have. We are leading a bipartisan effort to put a lid on carbon pollution and in so doing unleash a massive investment in clean-energy technology. If we can tackle this issue in a predictable, transparent and free-market way, we can create millions of high-paying jobs while limiting the worst effects of climate change and reducing both our dependence on foreign oil and the risk of another oil spill.

We have authored a bill that takes on this challenge, empowering America's private sector to take the lead in the $6 trillion global energy market while shutting out Wall Street speculators and protecting low- and middle-income families from associated price increases for energy.

Those are the guiding principles behind the Carbon Limits and Energy for America's Renewal Act, or Clear Act, which we introduced in December. We believe that when coupled with other new energy policies and tax incentives, this can be the basis for a clean-energy and job-creation package that can pass the Senate. The act takes a fresh approach to the persistent problem of how to end this country's dangerous addiction to fossil fuels without harming our economy.

At only 39 pages, it contrasts starkly with other thousand-plus-page energy and climate proposals, which are full of often confusing and bureaucratic provisions, windfalls for special interests and higher energy costs for the American people.

Our concept is simple: Instead of cap-and-trade, our approach is "cap-and-dividend," with the dividends going where they belong: into the pockets of hardworking Americans.

The legislation would set up a mechanism for selling "carbon shares" to the few thousand fossil fuel producers and importers through monthly auctions. Seventy-five percent of the auction revenue would be returned to every citizen and legal resident of the United States through equally divided rebate checks -- averaging $1,100 for a family of four each year. The remaining 25 percent would finance clean-energy research and development; help reduce emissions in agriculture, forestry and manufacturing; and provide transition assistance for workers and communities in carbon-intensive regions. The legislation aims to reduce greenhouse gas emissions 20 percent by 2020 and 83 percent by 2050.

Researchers at the New York University School of Law found that the legislation would generate good, "green jobs" in areas such as construction, solar power and mass transit because a predictable carbon price spurs investment in efficiency and cleaner-energy solutions.

Our Senate colleagues understand that the energy status quo threatens our economy, environment and national security. But consensus can quickly break down when disputes among various regions take over, leading to hyperpartisanship, an overload of legislative giveaways and, ultimately, stalemate.

The framework we propose all but eliminates regional disparities, ensuring that consumers are treated fairly even if they currently get most of their electricity from coal.

Allocating pollution credits entirely by an auction with minimum and maximum prices -- as opposed to giving some of them away to selected emitters, as other legislation proposes -- means that our legislation avoids picking winners and losers. We create a level playing field instead of providing pollution credits to whichever entities have the best lobbyists.

The act cuts out Wall Street speculators and price manipulators. It minimizes destructive price volatility.

Our legislation can generate bipartisan support because it addresses our nation's dangerous overreliance on fossil fuels while opening the door to vibrant economic growth. Instead of a behemoth bill designed to conceal backroom deals and giveaways, our framework is a straight path that all Americans can follow.

Maria Cantwell is a Democratic senator from Washington. Susan Collins is a Republican senator from Maine.

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