“We do not inherit the Earth from our ancestors; we borrow it from our children.” — Anonymous
We are obliged to leave our keiki and future generations a healthy planet. However, the increasing frequency, severity and impact of climate-related disasters make it abundantly clear that we are not doing enough to honor this obligation.
For more than half a century, we have known that carbon pollution from burning fossil fuels contributes to global warming. Atmospheric carbon dioxide has persistently increased, and so has the average global temperature. This warming is triggering weather extremes and natural disasters. It is threatening the planet and humanity.
We know the cause of the problem, so we can fix this. In the next decade, we must drastically reduce greenhouse gas emissions, especially carbon, to avoid even more catastrophic impacts and to begin to heal the planet.
Putting a price on carbon pollution is an effective way to reduce emissions. It would disincentivize polluting activities by financially penalizing them and rewarding behaviors that reduce carbon pollution.
This is the idea behind carbon cashback, a policy that charges a fee on fossil fuels based on their carbon pollution potential. It would increase the cost of fossil fuels. As a result, people and companies would pay the fee based on the pollution their activities emit.
But carbon cashback goes beyond that. It takes the fees collected, divides the total by the number of Hawaii residents, and gives each person a share of the money as a dividend. This makes carbon cashback progressive.
People who pollute little would pay a small amount but get the same dividend as everyone else. According to a University of Hawaii study, most households would come out ahead financially or at least break even. Low-income families, on average, would come out ahead financially because of their relatively low consumption of fossil fuels. This makes carbon cashback equitable.
A carbon emissions fee would be determined using the existing barrel tax, which assesses a fee on fossil fuels but at a low level. The fee would increase incrementally each year, and would fund a dividend distributed to people as a refundable tax credit.
Calculations show that after the program’s first 10 years, the fee increases only to account for inflation, and the dividend starts to decline after the 14th year.
Every resident who files a state income tax would be eligible for the dividend. Married couples filing jointly would be eligible for double the dividend. Each dependent would be eligible for half of the dividend. The average-sized family of three people, consisting of two adults and a child, would be eligible for just over $1,500.
Carbon cashback funds the program’s administration by using a small portion of the revenues from the carbon emissions fee.
Thus, the program is budget-neutral and doesn’t grow government. Further, implementation costs are low since the program uses existing government mechanisms.
Carbon cashback will reduce planet-warming pollution while financially benefiting Hawaii families. It’s a win for the environment, our families and future generations.
Carbon cashback bills — Senate Bill 2525 and House Bill 2178 — have been introduced this legislative session. Let’s support them.
Ashley Boggs advocates for a clean environment for future generations; John Kawamoto is a former legislative analyst and good-government advocate; Noel Morin is a sustainability and climate advocate.
