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Monday, July 23, 2012 - Page updated at 03:00 p.m.
Why we need a national carbon fee and dividend
By Davis Oldham
Special to The Times
BY the time you read this, the solar panels will be pumping out electricity on my roof. Our family installed the panels and other improvements with help from a strong alternative-energy and efficiency program, including a federal tax credit, state support for Washington-made products and an agreement with Seattle City Light to buy our surplus energy.
We're a middle-class family. We couldn't have done it without these incentives.
The panels should pay for themselves in about eight years. We expect to pay as little as 75 cents a month on the loan, once the incentives and our reduced electric bill are factored in. After repaying the loan, we should net somewhere around $15,000 in savings over the life of the panels.
We made this investment largely because we wanted to reduce our environmental impact, but we're happy to know that our electric bills will go down and that we have made a small contribution to improving the job situation in hard economic times.
State and local incentives are helpful, but we still lack a coherent national policy to promote clean energy and phase out fossil fuels. As we hear about fires, floods, heat waves, droughts and freak storms across the country, the need for such a policy becomes ever clearer and more urgent.
It's long been conventional wisdom that we can't afford to invest in clean energy. The truth is we can't afford not to.
As our family's experience shows, investing in clean energy creates jobs. The solar panels cost $23,000 to purchase and install. We spent another $27,000 to reduce our energy footprint by installing a new water heater, a new heating system and insulation.
We were visited by roofers, electricians, plumbers, insulation installers, heating and air-conditioning technicians, supervisors and inspectors — employees of local businesses and government, who will spend our money locally (unlike spending on oil or gas, which goes to some mega-corporation's distant bank account).
Meanwhile, recent extreme weather reveals the cost of doing nothing. In Duluth, 10 inches of rain in a day and a half caused unprecedented floods, leading to $100 million in damage. In Colorado, the cost of controlling record-setting fires approached $40 million. The cost of heat waves across the U.S. and power outages on the East Coast are not yet tabulated. Last year, insured losses from weather and climate disasters reached $44 billion.
Floods, wildfires and heat waves are not new. What's new is their severity and greater frequency, thanks to extra energy trapped in the atmosphere by greenhouse gases.
Harder to see, but no less real, are the long-term costs of illness, lost productivity, degraded infrastructure and environmental damage. And those are just economic costs; they don't include the deaths, suffering and decline in quality of life.
We need a simple, transparent policy encouraging clean energy so that ordinary families like ours can kick the carbon habit.
We can do this by putting a revenue-neutral price on carbon-based fuels, with proceeds returned directly to consumers. A steadily rising fee on coal, oil and natural gas at the source would send a clear price signal to investors that clean energy will be the better long-term investment. Imports would pay a comparable fee, to protect American manufacturers from unfair competition. The fee factors in the hidden costs of fossil fuels while letting the market decide how to invest in alternatives. Unlike cap and trade, this approach sends a clear and consistent message to the markets with little opportunity for speculative manipulation.
Meanwhile, consumers get a check like Alaska residents' oil dividend — the fee is "revenue neutral," not used to fund government programs. Consumers can use their dividend to offset the rising cost of fossil fuels and/or invest in the emerging clean-energy market.
Similar programs in British Columbia and Germany are already producing positive results. But time is short; we must cut emissions quickly to avoid far more severe impacts. Congress should act now to implement carbon fee and dividend.Davis Oldham is a Seattle homeowner and a member of the Seattle chapter of Citizens Climate Lobby.
Copyright © The Seattle Times Company
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