Shrink Government while Shrinking Climate Risks
/A very interesting group of people descended on Washington last month. In stark contrast to the hordes of protesters that make DC the target of their ire, these 600 came armed with economic reports, good cheer and thank-you cards to woo congress to their cause. Unpaid and traveling in coach from points as far away as Alaska the 600 came to talk about... tax policy. Yes, you read that right. Citizens from all over the country came to Washington to talk about tax policy but not just any tax policy. They came to talk about one that shrinks government & fights global warming.
Today we look at what this group, Citizens Climate Lobby, was proposing & how it can boost your sales. First some basics.
+ 1,000,000 in 4 years The number of jobs that will be added under the proposed law. That number increases to 2mm jobs in nine years and
+ $55 Billion The amount of GDP growth from the proposed law.
47 out of 50 The number of States whose own budgets rely on REMI, the economists who generated these numbers.
520 out of 535 The number of Congressional offices that the CCL volunteers met with to introduce and explain their plan.
Let's get back to what happened. On June 24th the volunteers of Citizens Climate Lobby were in Washington and had meetings with nearly every member of congress or their staff. This is on top of the nearly 150 meetings they'd had this year before the June event. What's remarkable about their plan, and the reason we're talking about it here, is that the plan will actually shrink the size of government and eliminate the need for some regulations currently on the way. Take a look.
A business-focused plan to fix the climate
Citizens Climate Lobby is a non-partisan organization and they're pitching their solution as one that's based on conservative values. It's called "Fee & Dividend" and it relies on the power of markets and the crowd.
Fee & Dividend- Most action on climate change is ad-hoc. Stop this or that pipeline. Regulate this or that activity. Add or remove some tax loophole or loan guarantee. CCL believes that the simplest way to deal with the climate crisis is to put a price on emissions. Lots of conservative economists agree this is the right move. Normally you'd expect the business community to hate an idea like this because it pulls down efficiency whenever a new cost is imposed. Not so this time because of the second half of the program- the dividend. The draft legislation returns 100% of all fees collected back to households. So goods and services get marginally more expensive and households get marginally more income. And that's it. That's the whole plan.
How much more expensive?- Not much. Planet Money, the spectacular podcast on topical economics did a show on this a while back where they explored the costs. It's about 20 minutes long and if you're interested you should listen to it HERE. The short version is that you'd be paying about ten cents more at the pump and less than five bucks more for an expensive trip to the grocery. The dividend however kicks back roughly $290/month by 2024 for a family of four. And that's where the real magic happens.
An Economic Boost- Two things happen at this point. First lots of little things are a tiny bit more expensive and what we know from the last hundred years of economics is that families start to look for ways to avoid that pain. The do that with better insulation, better windows, maybe looking at more efficient cars or different light bulbs or other things. Whatever the means they start finding ways to cut out the expense that causes the pain. That creates a multiplier effect. The hardware store sells more caulk and weatherstripping etc. That money is spent in other places growing the overall economy. The real winners are Main Street businesses who find that long after their customers have changed their windows those customers are still getting a dividend and that money generally stays local.
No cash for Uncle Sam- Businesses and conservative groups are especially happy with the plan because it drives out room for government mis-management and prevents additional bloat from regulation. For the last decade the US Supreme Court has awarded the EPA an unbroken winning streak of victories. Most recently those come in the form of not just a validation that the EPA can regulate CO2 emission but an insistence that it must do so. Although this is a good thing for everyone it's a sloppy way to create a solution and will add regulations and personnel to a government body reviled by half of the Congress which oversees it. CCL's proposed law is a far more elegant solution and it requires a lot less energy and bureaucracy to charge a fee when carbon enters the system than to measure and monitor emissions from the hundred of ways that it can be burnt.
Businesses should get on board with this right away. The proposal is smart, simple and stimulative. It removes excessive government waste before it's even created and prevents the mismanagement of funds by returning those funds to the people who know how to use them best... everyone.
Consider joining the fine people at Citizens Climate Lobby here. Read more about the study here.
