California Considering a Fee and Dividend System. By Rebecca Smith and Keith Johnson, WSJ, January 12, 2010. "California might start paying people to cut their energy use. On Monday, a state panel proposed that the lion's share of new fees California plans to impose on greenhouse-gas emissions should be returned to consumers in the form of tax cuts or annual dividend checks that eventually could exceed $1,000 for a family of four. The proposal is part of an effort to find the best uses for proceeds from a carbon allowance auction. The panel argues that higher prices will drive consumers to use less of the fossil fuels that produce greenhouse gases. At the same time, state officials hope to compensate for the pain inflicted on households by higher energy prices.
"They are considering using most of the money collected from the new fees to reduce taxes or pay annual dividends to consumers -- regardless of their energy spending. Consumers would benefit the most financially if they dramatically reduced their fuel bills. Although federal climate-change legislation appears to be at a standstill, California is forging ahead with implementing its own law. The state plans to essentially tax air emissions and fuels that produce them when burned. Emitters will have to purchase carbon allowances after 2012... The plan to offer California consumers a payback is an offshoot of the state's 2006 climate law, the Global Warming Solutions Act. A 16-member panel, the Economic and Allocation Advisory Committee, is charged with figuring out the simplest, most cost-effective way to design the program."
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