“These jobs will offer relatively high wages in industries that are experiencing overcapacity and unemployment. The economic incentives in the CLEAR Act will begin to mop up some of the slack in the market,” said Michael Livermore, the executive director of the group, in a prepared statement. “Presently unemployed construction workers will find more opportunities as green investment kicks in.”
The Cantwell-Collins plan employs a so-called cap-and-dividend approach under which carbon allowances are bought at federal auctions. Seventy-five percent of the proceeds go directly back to consumers, while the balance are steered into a new trust for green technologies, aid to affected workers and other programs.
The new study notes that capping carbon dioxide emissions can have regressive effects because low-income families spend proportionately more on energy. But this is addressed by the legislation, the Institute contends, stating:
A per capita dividend helps smooth out disparities. First, an equal dividend on a per capita basis provides greater aid to lower-income individuals because it will make up a larger share of their total income. The impact of a carbon cap on prices is also greatest for higher-income earners in absolute terms, because they consume both more energy and more energy-intensive goods. As a consequence, the dividend smoothes out distributional imbalances and even benefits households with below-average incomes.
The Cantwell-Collins plan regulates “upstream” sectors that produce or import fossil fuels, like mining and oil companies. It allows limited trading of what it calls “carbon shares” but freezes out Wall Street banks and other parties from the trading market.
The expected bill from Kerry, Graham and Lieberman is expected to employ a different approach to capping greenhouse gases that includes a cap-and-trade system applied to power plants and eventually other industrial facilities, while motor fuel emissions would be handled through a separate fee.