Real relief from high gas prices

Gasoline prices rose. Consumers get hurt. Politicians rub their hands and talk about “rest”. The Biden administration has Exploitation of strategic oil reserves Trying to lower prices. That action will depend on whether the Saudis, Russians, and other members of the oil-producing OPEC+ cartel retaliate by tightening the screws even further. Others demand Suspension of state taxes on gasolineA sedative that does not address the causes of our current plight.

What would real relief from rising gas prices look like? The answer has a surprising twist: true convenience does not mean lower prices. It means changing who gets the money.

Imagine that instead of the profits from rising gas prices going to oil producers, the money went directly into the hands of consumers as equal monthly payments — like COVID-19 stimulus checks, but it’s recurring.

Imagine that instead of enticing consumers to remain addicted to gasoline, subject to periodic price gouging, we decided to raise gas prices ourselves, generating reliable price signals to incentivize more energy-efficient vehicles and transportation alternatives.

Imagine that by weaning ourselves off gas, we gain an additional benefit: getting rid of polluted air It kills tens of thousands Every year in the United States and Millions around the world; Relief from constant bleeding government support For fossil fuels and from the wars for oil that the staggering human and financial wars have been fought cost; Above all, mitigate the continuing instability of the Earth’s climate.

Imagine that breaking free from gasoline addiction also brings freedom from politicians who bemoan high gas prices as they fill their campaign coffers with contributions from oil companies.

None of this is impossible. We can defeat OPEC at their own game by placing hard roof on the amount of fossil carbon we allow into our economy. Permits will be issued up to the limit set by this cap. Oil companies will buy these permits at quarterly auctions, just as energy companies have been doing since 2009 in eastern states under Regional Greenhouse Gas Initiative. Revenue will be recycled to the public as carbon profitsJust as Alaska now pays dividends to its residents from the state’s oil revenue.

Slowly but surely, this idea is gaining ground here and in other countries.

In the United States, carbon dividends were first proposed in 2009 in a bipartisan bill Co-sponsored by Sens. Maria CantwellMaria Ellen CantwellGOP Resistance to Biden’s FCC Nominee May Endanger the Board’s Democratic Majority Scott says he will bar candidates until Biden officials testify about the supply chain crisis Airlines staff get ready for vacation more (D-wash) and Susan CollinsSusan Margaret CollinsBiden signs four bills aimed at helping veterans Hill Morning Report – Submitted by Facebook – The omicron threat and Biden’s plan to beat it Senate blocks defense bill, puts it in a bind more (R-min) a House of Representatives bill Sponsored by a former actor. Chris Van HollenChristopher (Chris) Van HollenSenators demand construction of Smithsonian Latino Women’s Museums on National Mall Schumer-McConnell connects to the debt ceiling drama Democrats are scrambling to figure out their shutdown strategy more (D-Md.), now a member of the Senate. But at the time, the Democratic leadership chose instead to lay its eggs in the “cover and commerce” basket. Their political calculation was that the free permits, and the resulting promise of windfall profits, would neutralize opposition from fossil fuel lobbyists. did not work. The Cap-and-trade program in Washington has since died, but today Several new bills Carbon dividend alternative adopted.

In 2019, more than 3,000 economists endorsed the carbon dividend policy open letter Signed by four former Fed chairs, including the current Secretary of the Treasury Janet YellenJanet Louise YellenIn The Money – Powell, Yellen faces inflation pressures Paul Willen says they underestimate inflation and supply crises On the money – Powell pivots with high inflation moreand 15 former chairs of the Council of Economic Advisers and 28 Nobel Prize laureates.

Canada recently launched its first carbon dividend program in all provinces that didn’t already have their own carbon price, including Ontario. The initial price is set low, but the government plans to raise it to around $135 per ton by 2030. The main weakness of the Canadian system is that it returns the money as an income tax adjustment, rather than more clearly and transparently. Check in the mail or electronic bank deposit.

Carbon dividends are now actively discussed in Germany. Two of the three coalition partners in the next government — the Environmental Greens and the market-oriented Liberal Democrats — supported the idea in their party platforms. The leader of the Social Democratic Party, Olaf Schulz, who will head the new government, says he wants to be “climate advisor. ”

Rather than addressing the symptoms of rising gas prices dictated by forces beyond our control, “do-it-yourself” carbon prices along with profits will cure the underlying disease. Instead of empty rhetoric and temporary fixes, consumers will finally get real relief, by controlling where our money goes.

James K. Boyce He is a senior fellow at the University of Massachusetts Amherst Research Institute of Political Economy and author of “Carbon profits issue. “

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