The Best Way to Reduce Carbon Emissions

Carbon Pricing: “A Fee and Dividend” Approach

Our fossil fuel emissions pose two, now very familiar, hazards to the quality of life in the State of Utah: the adverse health effects of a lifetime of breathing air that is frequently out of compliance with federal air pollution standards, and the disproportionate impact that climate change is having on the rapidly warming and drying southwest region of our country. Two bills that are under consideration during the 2022 legislative session are aimed at tackling these problems head-on by increasing the cost that each of us pays to fuel our vehicles, heat our homes and businesses, and jet-around the planet. The approach of taxing fossil fuels is a market driven approach to incentivize switching to clean sources of energy and has long been championed by economists as the single most effective way to rapidly reduce carbon emissions. The good news is that both bills, if adopted, support returning the carbon tax receipts to our pockets through dividends or reductions in other taxes and expenses.

Approaches to Federal Action

House Bill HJR 3Joint Resolution Supporting Federal Carbon Fee and Dividend Program, sponsored by Representative Raymond Ward, supports the use of nation-wide, border-adjusted carbon fees and dividends as the best way to encourage the development of clean energy technologies. Currently, there are two such fee and dividend plans being discussed at the national level: the Baker-Shultz Carbon Dividends Plan, which is advocated by the Climate Leadership Council, and the Energy Innovation and Carbon Dividend Act advocated by the Citizens Climate Lobby. Specifically, the highlighted summary introducing Representative Ward’s HJR 3 “supports the principle of coupling a border adjusted carbon fee and dividend program with a decrease of individual regulations on and government support for individual industry segments or specific companies; opposes any requirement of reparations from the fossil fuel industry; and supports a loosening of federal requirements placed on the mining industry to facilitate acquisition of the minerals needed for clean energy technologies.

A Utah Bill

Senate Bill 187Fossil Fuels Tax Amendments, sponsored by Senator Derek Kitchen, would impose a modest tax on fossil fuel emissions in Utah: motor fuels (gasoline, diesel, and aviation fuel), natural gas, fossil-fuel generated electricity, and certain other fossil fuels burned in industrial facilities. The bill would return much of the added cost of these fuels by eliminating our regressive state sales taxes on grocery store food and residential and commercial electricity and other fuels; making public transit free; and funding a 10% refundable match of the federal Earned Income Tax Credit for low-income working families. Senator Kitchen’s bill is in many respects similar to Representative Joel Briscoe’s 2019 carbon pricing bill H.B. 304 and a proposed 2024 ballot initiative to create a carbon fee and dividend program. Kitchen’s bill would shift the state of Utah from taxing potatoes to taxing pollution. (Note that the proposed ballot initiative would become moot if the Legislature passes SB 187.)

Can Utah Get Ahead of the Game?

Utah’s double burden of toxic air pollution and a warming, drying climate may give Utah unusual potential for leadership on a broader scale. Although we are a relatively conservative state, our citizens are motivated to take action to clean our air and cool the planet. Both HJR 3 and Senate Bill 187 represent opportunities for the state of Utah to provide leadership at the national level. Although Kitchen’s SB 187 may not pass, the Utah Citizens’ Counsel urges you to help build momentum with your legislators and the public at large for the time, someday soon, when carbon taxing will be recognized as a necessary tool to deal with carbon emissions. We urge you to voice your support for these bills now by contacting your legislators.