HomeMy WebLinkAboutR-10701 - NATIONAL REVENUE- NEUTRAL CARBON FEE AND DIVIDEND PROGRAMAPPENDIX A
To the City of San Luis Obispo Resolution in Favor of
National Revenue-Neutral Carbon Fee and Dividend Legislation
Findings:
1. Causation: there is a consensus 1, 2 among climate scientists, domestic and international science
bodies such as the National Academy of Sciences and the International Panel on Climate
Change and the World Meteorological Organization (IPCC, WMO), that greenhouse gas
emissions from human activities such as the burning of fossil fuels are driving the current rise in
global temperatures and climate change,3
2. Mitigation (Return to 350 ppm or below): the weight of scientific evidence also indicates that a
return from the current concentration of more than 400 parts per million (“ppm”) of carbon dioxide
(“CO2”) in the atmosphere to 350 ppm CO2 or less is necessary to slow or stop the rise in global
temperatures,4
3. Endangerment: further increases in global temperatures pose imminent and substantial dangers
to human health 5, the natural environment 6, the economy7, national security8, and an
unacceptable risk of medium and long-term future harm 9,
a. Climate change caused by global warming-related greenhouse gas emissions including
CO2 already is leading to large-scale problems including increasing acidity of oceans and
rising sea levels; more frequent, extreme, and damaging weather events such as heat
waves, storms, heavy rainfall and flooding, and droughts; more frequent and intense
wildfires; disrupted ecosystems affecting biodiversity and food production; and an
increase in heat-related deaths 10; and
b. We are approaching a dangerous threshold whereby, if it is crossed, humans will no
longer be able to influence the course of future global warming, as tropical forests, peat
bogs, permafrost and the oceans 11 switch from absorbing carbon to releasing it; and
4. Local effects on agriculture: the following effects of climate change are likely to occur if we do not
reduce our CO2 emissions to 350 ppm by 2050:
a. Bay Area and Central Coast temperatures are predicted to rise significantly. The number
of days over 95° is expected to increase from an average of 12 per year today to 20-29
by 2050 and 32-65 by 2100,12
b. Given increased heat waves, droughts and higher temperatures,13, California farmers will
face an increasingly uncertain future, where current crops may fail and water may be
even more scarce,14, 15, 16
c. If heat-trapping emissions continue to rise at today’s levels the snowpack in the Sierra
Nevada is likely to decline as much as 40% from historical levels by 2050 and as much
as 90% by 2100, thus severely reducing the availability of water in summer. However if
we make significant emissions reductions the decline by 2050 could be as little as 12%.17
d. Two thirds of California’s 2,400 endemic plants could lose more than 80% of their current
ranges if climate change worsens,18
e. The number of chilling hours at the end of this century is expected to be half or less than
during the 20th century such that many currently lucrative crops will no longer be
commercially viable in large areas of California,19, 20, 21
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R 10701
San Luis Obispo City Council, March 15, 2016
Support for National Revenue Neutral Carbon Fee and Dividend Legislation
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f. We can expect a range expansion and rapid increase in populations of insects already
present and the arrival of new insect pests to newly warmer regions amid ecosystem
changes thus negatively affecting agriculture and health,22, 23
5. The present costs of fossil fuels are externalized: Presently the environmental, health, and social
costs of CO2 emissions are not included in prices paid for fossil fuels, but rather these
externalized costs are borne directly and indirectly by all Americans and global citizens; and
6. Co-Benefits: the measures proposed in this legislation will benefit the economy, human health,
the environment, and national security, even without consideration of global temperatures, by
correcting market distortions, reducing non-greenhouse-gas pollutants, reducing the outflow of
dollars to oil-producing countries, and improving energy security of the United States,24
7. Benefits of Carbon Fees: phased-in carbon fees on greenhouse gas emissions are (1) the most
efficient, transparent, and enforceable mechanism to drive an effective and fair transition to a
domestic-energy economy, (2) will stimulate investment in alternative-energy technologies, and
(3) will give all businesses powerful incentives to increase their energy-efficiency and reduce their
carbon footprints in order to remain competitive,25
8. Equal Monthly Per-Person Dividends: monthly dividends (or “rebates”) from carbon fees paid
equally to every American household will stimulate the American economy and help ensure that
families and individuals can afford greenhouse gas-free energy,
Therefore the National Revenue Fee and Dividend Act 26 contains the following elements:
1. Collection of Carbon Fees/Carbon Fee Trust Fund: The Act would impose a carbon fee on all
fossil fuels and other greenhouse gases at the point where they first enter the economy. The fee
shall be collected by the Treasury Department. The fee on that date shall be $15 per ton of CO2
equivalent emissions and result in equal charges for each ton of CO2 equivalent emissions
potential in each type of fuel or greenhouse gas. The Department of Energy shall propose and
promulgate regulations setting forth CO2 equivalent fees for other greenhouse gases including at
a minimum methane 27, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons (HFCs),
perfluorocarbons, and nitrogen trifluoride. The Treasury shall also collect the fees imposed upon
the other greenhouse gases. All fees are to be placed in the Carbon Fees Trust Fund and be
rebated 100% to American households as outlined below.
2. Emissions Reduction Targets: To align US emissions with the physical constraints identified by
the Intergovernmental Panel on Climate Change (IPCC) to avoid irreversible climate change, the
yearly increase in carbon fees including other greenhouse gases, shall be at least $10 per ton of
CO2 equivalent each year. Annually, the Department of Energy shall determine whether an
increase larger than $10 per ton per year is needed to achieve program goals. Yearly price
increases of at least $10 per year shall continue until total U.S. CO2-equivalent emissions have
been reduced to 10% of U.S. CO2-equivalent emissions in 1990.
3. Equal Per-Person Monthly Dividend Payments: Equal monthly per-person dividend payments
shall be made to all American households (½ payment per child under 18 years old, with a limit of
2 children per family) each month. The total value of all monthly dividend payments shall
represent 100% of the total carbon fees collected per month.
4. Border Adjustments: In order to ensure that U.S.-made goods can remain competitive at home
and abroad and to provide an additional incentive for international adoptions of carbon fees,
Carbon-Fee Equivalent Tariffs shall be charged for goods entering the U.S. from countries
without comparable Carbon Fees/Carbon Pricing. Carbon-Fee-Equivalent Rebates shall be used
to reduce the price of exports to such countries and to ensure that U.S. goods can remain
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R 10701
San Luis Obispo City Council, March 15, 2016
Support for National Revenue Neutral Carbon Fee and Dividend Legislation
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competitive in those countries. The Department of Commerce will determine rebate amounts and
exemptions if any.
1 Anderegg, William R. L. et al. “Expert Credibility in Climate Change.” Proceedings of the National
Academy of Sciences 107.27 (2010): 12107–12109. www.pnas.org.
2 Doran, Peter T., and Maggie Kendall Zimmerman. “Examining the Scientific Consensus on Climate
Change.” Eos, Transactions American Geophysical Union 90.3 (2009): 22. CrossRef.
3 IPCC, 2013: Summary for Policymakers. Cambridge University Press, Cambridge, United Kingdom
and New York, NY, USA: Intergovernmental Panel on Climate Change, 2013. Climate Change
2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change.
4 Hansen, J. et al. “Target Atmospheric CO2: Where Should Humanity Aim?” The Open Atmospheric
Science Journal 2.1 (2008): 217–231. arXiv.org.
5 McMichael, Anthony J, Rosalie E Woodruff, and Simon Hales. “Climate Change and Human
Health: Present and Future Risks.” The Lancet 367.9513 (2006): 859–869. CrossRef.
6 Hughes, I. “Biological Consequences of Global Warming: Is the Signal Already Apparent?” Trends
in Ecology & Evolution 15.2 (2000): 56–61.
7 Nordhaus, William D. “A Review of the ‘Stern Review on the Economics of Climate Change.’”
Journal of Economic Literature 45.3 (2007): 686–702
8 Hagel, Chuck. Department of Defense: 2014 Climate Change Adaptation Roadmap. Alexandria,
VA: Office of the Deputy Under Secretary of Defense for Installations and Environment, 2014.
9 Borgerson, Scott G. “Arctic Meltdown.” Foreign Affairs Apr. 2008. Foreign Affairs.
10 IPCC, 2013: Summary for Policymakers.
11 Archer, David, Bruce Buffett, and Victor Brovkin. “Ocean Methane Hydrates as a Slow Tipping
Point in the Global Carbon Cycle.” Proceedings of the National Academy of Sciences 106.49
(2009): 20596–20601. www.pnas.org.
12 From Boom to Bust? Climate Risk in the Golden State, Risky Business Project, March 20, 2015,
http://www.georgetownclimate.org/resources/from-boom-to-bust-climate-risk-in-the-golden-state
13 Moser, Susanne, Julia Ekstrom, and Guido Franco. Our Changing Climate 2012 - Vulnerability &
Adaptation to the Increasing Risks from Climate Change in California - A Summary Report on
the Third Assessment. California Climate Change Center, 2012.
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R 10701
San Luis Obispo City Council, March 15, 2016
Support for National Revenue Neutral Carbon Fee and Dividend Legislation
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14 Gleick, Peter H. Water -- the Potential Consequences of Climate Variability and Change for the
Water Resources of the United States. Pacific Institute for Studies in Development, Environment,
and Security, 2000. agris.fao.org.
15 Joyce, B. et al. Climate Change Impacts on Water Supply and Agricultural Water Management in
California’s Western San Joaquin Valley, and Potential Adaptation Strategies. California
Climate Change Center, 2009.
16 Purkey, D. R. et al. “Robust Analysis of Future Climate Change Impacts on Water for Agriculture
and Other Sectors: A Case Study in the Sacramento Valley.” Climatic Change 87.1 (2007): 109–
122. link.springer.com.
17 Cayan, Dan et al. Climate Change Scenarios and Sea Level Rise Estimates for the California 2009
Climate Change Scenarios Assessment. California Climate Change Center, 2009.
18 Meadows, Robin. “UC Scientists Help California Prepare for Climate Change” in California
Agriculture.” California Agriculture 63.2 (2009): 56–58.
19 Weare, Bryan C. “How Will Changes in Global Climate Influence California?” California
Agriculture 63.2 (2009): 59–66.
20 Baldocchi, Dennis, and Simon Wong. “Accumulated Winter Chill Is Decreasing in the Fruit
Growing Regions of California.” Climatic Change 87.1 (2007): 153–166. link.springer.com.
21 Luedeling, Eike, Minghua Zhang, and Evan H. Girvetz. “Climatic Changes Lead to Declining
Winter Chill for Fruit and Nut Trees in California during 1950–2099.” PLoS ONE 4.7 (2009):
e6166. PLoS Journals.
22 Trumble, John T., and Casey D. Butler. “Climate Change Will Exacerbate California’s Insect Pest
Problems.” California Agriculture 63.2 (2009): 73–78.
23 Bale, Jeffery S. et al. “Herbivory in Global Climate Change Research: Direct Effects of Rising
Temperature on Insect Herbivores.” Global Change Biology 8.1 (2002): 1–16. Wiley Online
Library.
24 Nystrom, Scott, and Patrick Luckow. The Economic, Climate, Fiscal, Power, and Demographic
Impact of a National Fee-and-Dividend Carbon Tax. Regional Economic Models, Inc. (REMI)
and Synapse Energy Economics, Inc., 2014.
25 Nystrom, Scott, and Patrick Luckow (REMI study)
26 “Carbon Fee and Dividend.” Citizens’ Climate Lobby. N.p., n.d
https://citizensclimatelobby.org/carbon-fee-and-dividend/. 12 Apr. 2015.
27 Methane is a much more potent greenhouse gas than CO2 with both direct and indirect effects
contributing to warming. It is therefore important to place a fee on methane that leaks to the
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R 10701
San Luis Obispo City Council, March 15, 2016
Support for National Revenue Neutral Carbon Fee and Dividend Legislation
Page 5 of 5
atmosphere. Some of this leakage will occur after the fee has been assessed on methane under
the assumption that it will be burned to yield the less potent CO2. To ensure the integrity of the
program and that markets receive accurate information with regard to the climate forcings caused
by various fossil fuels, the carbon fee shall be assessed on such leaked methane at a rate
commensurate with the global warming potential (“GWP”) of methane including both its direct
and indirect effects. Given the importance of tipping points in the climate system, the 20-year
GWP of methane shall be used to assess the fee, and not the 100-year GWP. As proper
accounting for such leakage is necessary for honest assessment of progress towards program
goals, reasonable steps to assess the rate of methane leakage shall be implemented, and leaked
methane shall be priced accordingly. The entity responsible for the leaked methane shall be
responsible for paying the fee.
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