Energy Innovation and Carbon Dividend Act a First Step

Energy Innovation and Carbon Dividend Act a First Step
The Energy Innovation and Carbon Dividend Act will impose a fee on the carbon dioxide emitted by fuels. Photo by Peter Maiden

The end of September saw the revival of the Energy Innovation and Carbon Dividend Act by Rep. Salud Carbajal (D–Santa Barbara). The act is a favorite among climate organizations, such as Citizens’ Climate Lobby, that aim to sway the “center” of the American political spectrum by calling the bill a “market-based” climate solution.

But some progressives take issue with this market focus, as well as the timeline of the bill. It’s too slow and levies the same capitalist system that got us into this mess. While these criticisms are valid, this bill is an important step in the right direction, and progressives would do well to use it as a launching pad for further change.

Overview of the Act

The Energy Innovation and Carbon Dividend Act was introduced in 2018. Despite dying in January 2019, it garnered much support from groups including the Environmental Defense Fund and publications such as the Washington Post.

The act would impose a fee on the carbon dioxide emitted by fuels as far upstream as possible. The fee starts at $15 per metric ton and increases by $10 each year. There would be exemptions for agricultural fuels and carbon capture.

All revenues from this fee would be distributed to Americans with a Social Security Number (SSN) or a Taxpayer Identification Number (TIN) as a monthly dividend and a half share would be given to children. The intent is to offset any possible downstream costs caused by increased energy prices.

Finally, to prevent companies from offshoring their activities to somewhere without this fee, imported goods must pay an “equalization” fee if their country of origin doesn’t have a carbon fee, while exports will receive a refund.

While there are a few other details, these elements make up the core of the bill. The goal is to hit 90% emission reduction by 2050 and create job growth in the green energy sector, as well as downstream industries, while drastically reducing direct pollution-related deaths—something quite poignant to Central Valley residents.

Problems with the Bill

For progressives, there are three notable criticisms of this bill.

The first is the timeline. Based on the Paris Agreement, emissions need to be reduced by 45% by 2030 and hit net zero by 2050. The Energy Innovation act does not meet those goals. Instead, it aims for 33% “within a decade” and 90% by 2050.

Second is the SSN/TIN requirement. This requirement would remove undocumented people, as well as others who don’t have or can’t access those numbers, as beneficiaries of the fee. While the carbon dividend is a huge step toward environmental justice that many other policies lack, it can’t be allowed to leave out the 10-million-plus undocumented people who often undergird the country’s workforce.

But perhaps the most worrying part, especially for those further left, is the predominance of the “market-centered” approach. Unchecked capitalism is what got us into the climate mess in the first place.

For many, utilizing that same market as a solution feels like a move in the wrong direction. Instead, we should move our culture away from the “market” and toward technologies focused on improving human life and the climate. Even for those not in that camp, there is a possibility that the market could, as it so often has, corrupt this effort, too.

These three criticisms have one thing in common: They don’t actually think the bill will do harm, they just think it doesn’t go far enough.

The Danger of Dissatisfaction

Political strategists cannot underestimate this sentiment. Voters need to be energized. Trump’s ability to energize voters (through hate and racism) is part of what catapulted him to fame, while Biden’s lack of charisma is a major fear for Democratic strategists.

Those on the right are predisposed against policies they see as “regulatory” or “raising taxes,” which will be easy criticisms of this policy. So, the bulk of support will come from the center and the left, but only if they’re excited to vote for it.

This is a symptom of the political dissatisfaction that saturates our broader sociopolitical landscape. Seventy percent of the country believes the country is on the wrong path.

For some, propaganda has them convinced the whole process is illegitimate. Others are real victims of a hostile, violent sociopolitical world. To both groups, lukewarm strategies are unappealing.

They want big, structural change, and to have this system replaced with the equitable world we know is possible. Anything less feels like a concession on our part, acceptance of mere crumbs while we starve.

Opening the Door

This train of thought is completely valid, but in our search for perfection we can’t allow ourselves to miss a good opportunity.

As it stands, the act does no harm, but it’s a big step in the right direction, and one we can use to push the discussion further toward the progress we need.

Right-wing propaganda outlets have long mastered shifting the “Overton window”—the ideas viewed as “acceptable” in society. With this bill, we can push the Overton window back in several areas: toward the idea that companies should have to pay for damaging society, that we have a responsibility to the earth, that wealth should be redistributed rather than concentrated at the top and that we can levy prices on fossil fuel companies without an economic implosion.

Likewise, climate change is an issue with a clock attached. Short of a full-blown revolution, we’re unlikely to rid ourselves of the “market” anytime in the near future. This policy actually has a decent chance of passing, and soon. It could make an impact now, by putting pressure on companies where it hurts them most: their bank account. That gives us more time to make the structural changes we want.

Idealism is important. It’s the guiding star that points us where we need to go. But, getting to that point requires strategy and a path. This policy can be a substantial first step on that path. Instead of focusing on where it’s insufficient, we should endorse it, then use it as a launching pad for further change.


  • C.J. Wilson

    C.J. Wilson is a freelance writer and outdoor/environmental educator in Fresno. When he’s not writing stories, you’ll find him out in nature, at a show or volunteering for groups such as Citizens’ Climate Lobby. Contact him at

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