Emissions Projections for the Climate Leadership Council Carbon Dividends Plan: 2021

In February 2017, the Climate Leadership Council (CLC), led by Ted Halstead and Republican statesmen George P. Shultz and James A. Baker III first introduced “The Conservative Case for Carbon Dividends.” CLC’s Founding Members represent a diverse group of individuals, NGOs, energy companies, consumer good companies, and other multi-national firms.CLC’s updated Carbon Dividend Plan rests on four pillars:A Gradually Increasing Carbon Tax: “The first pillar of our bipartisan plan is an economy-wide fee on CO₂ emissions starting at $40 a ton (2017$) and increasing every year at 5% above inflation.”Carbon Dividends for All Americans: “All net proceeds from the carbon fee will be returned to the American people on an equal and quarterly basis.”Significant Regulatory Simplification: “In the majority of cases where a carbon fee offers a more cost-effective solution, the fee will replace regulations. All current and future federal stationary source carbon regulations, for example, would be displaced or preempted.”Border Carbon Adjustments: “Carbon-intensive exports to countries without comparable carbon pricing systems will receive rebates for carbon fees paid, while carbon-intensive imports from such countries will face fees on the carbon content of their products.”The purpose of this RFF analysis is to assess the impacts of the Carbon Dividend Plan on US energy-related CO₂ emissions if the policy were to be fully implemented in 2023. This analysis uses the EIA definition of energy-related carbon dioxide emissions. The EPA’s Inventory of Greenhouse Gas Emissions and Sinks reports levels of energy-related carbon dioxide emissions that exclude emissions from international bunker fuels and includes emissions from US territories. The analysis does not consider the economic impacts of any of the four pillars on households or industry.