Cap-and-Dividend is SOOO the New Cap-and-Trade

If you were searching for a parable about the dangers of tactical absolutism (you know, my-way-or-the-highway type thinking), the rise and fall of cap-and-trade legislation would be a good place to start. 

In the months leading up to the passage of the Waxman-Markey climate bill in the House last summer, many influential enviros were in a  don’t-rock-the-boat mood. Privately, most greens agreed that the legislation was deeply flawed, especially its giveaway of 85 percent of polluter permits and its cave-in to agribusiness interests. But the conventional wisdom among green mandarins was that any discussion of other options was politically naïve, quixotic even. The cap and trade defenders were often so convinced of their own sophistication that they descended to condescension. At Climate Progress, Joe Romm upbraided NASA Scientist James Hansen for backing a carbon tax: “Your opposition to Waxman-Markey is ill-conceived and unhelpful,” a headline there blared. “There isn’t going to be a carbon tax nor should there be. Get over it and move on.” columnist David-shut-yer-piehole-Roberts was nearly hysterical in his defense of cap-and-trade, trashing a Thomas Friedman column in support of a carbon tax and concluding that “It’s Friedman who doesn’t seem to ‘get’ cap-and-trade.”

After Waxman-Markey passed, all eyes turned to the Senate and, to their credit, critics of cap-and-trade kept up their debunking in an effort to influence legislation in the upper chamber. At the same time, cap-and-trade defenders continued to proclaim that other options had no legislative chances and so should stay out of the discussion. When the Story of Stuff’s Annie Leonard had the temerity to question cap-and-trade’s logic, Roberts slammed her for her “Romanticism.” He wrote: “This is the worst feature of the C&T bashers (and carbon tax advocates): their utter political naivete.” Environmental Defense Fund, which has staked its reputation on cap-and-trade success, hastily put together a rip off video, “The Facts of Cap and Trade.” The video tries to impress viewers with its seriousness by highlighting the fact that the presentation comes “From an Economist.”

As the debate continues ad naseum, a funny thing has happened: An alternative solution called cap-and-dividend is gaining ground and could  supplant the much heralded (and equally hated) cap-and-trade proposal. Under cap-and-dividend, producers and importers of fossil fuels will have to buy polluter permits that will be auctioned off by the government. Some of that money will go toward making investments in clean energy. But the rest will be returned to Americans in the form of a rebate — about $1,000 a year for a family of four. Everyone except for the wealthiest 20 percent of us would get some kind of rebate. By raising energy prices, the system would discourage people from being fossil fuel hogs, and would over time reduce emissions.      

Pie in the sky? Not exactly. Senator Maria Cantwell, a Democrat from Washington, is pushing a cap-and-dividend bill. She even has a Republican co-sponsor, Susan Collins of Maine. What gives the Cantwell-Collins bill a chance of success is its simplicity: A mere 40 pages long, the CLEAR Act boasts the virtue of brevity; it’s a fraction of the length of the Waxman-Markey bill. And the measure is picking up media endorsements. The Economist recently wrote: “Of all the bills that would put a price on carbon, cap-and-dividend seems the most promising. … The most attractive thing about the bill is that it’s honest.” The Washington Post gave the Cantwell-Collins proposal a nod, writing last week in an editorial that “there is a chance that the failure of the House’s bill in the Senate and the search for a Plan B will yet produce better legislation.”

So, with cap-and-trade on the ropes and a sensible alternative, cap-and-dividend, gaining momentum, I’m wondering if the chorus will change its tune. Will EDF, for example, be willing to ditch their pet project and support another carbon-reduction mechanism? Will the green bloggers lend their support to a different tactic?  

I think it’s only fair to ask: Who’s being politically naïve now?


Courtesy The EnvironmentaList, the blog of Earth Island Journal, the award-winning environmental journal published for over 25 years by Earth Island Institute, an incubator of nonprofit organizations devoted to environmental issues, animal rights and social justice.


photo credit: thanks to Kenneth Hynek via flickr

By Jason Mark, Editor, Earth Island Journal


Leanne B.
Leanne B7 years ago


Linda J.
Linda J8 years ago

Article was good ...thanks

Sheila L.
sheila l8 years ago

Let those hypocrits in Wash.DC, practice what they preach. INstead of ramming these outrageous high taxed bills down our throats, let us see Sen. John Kerry NOT take a private jet where he is the sole passenger to Sweden. They are hypocrits these senators and congressmen, they want the avg. citizen to pay high costs for these so-called green bills; but they act recklessly with the environment themselves. We need to VOTE them OUT of office in 2010. Send the phonies home.

Gulu Uttamchandani
GR U8 years ago

"Cap period, no trade."
Fantastic Idea. There should be more action and less talk.
Don't people see the effects CO2 is creating on the environment?
Hurry and act before it's too late.

Dovid Miller
Dovid Miller8 years ago

How many "reasonable" people do you figure you can find in Congress? Can we find even one not on the payroll of private interests?

Mary Carolyn Perry
Mary C Perry8 years ago

This sounds like a reasonable idea...let us have it explained more in detail to make sure there are no loopholes for corporations to jump thru!

Ellinor S.
Ellinor S8 years ago

thank you

Heather B.
Past Member 8 years ago

Fascinating. Thanks for the article, Nicole.

Dave C.
David C8 years ago

I'm afraid anything left to discussion among politics will be limited and minimally helpful. Look at the health care debate.
We need to cap and cap!

Too many people only look at what effect it will have on themselves and the current time period. We need a future thinking and bigger picture-world thinking attitude to truly solve this issue.

Lisa F.
Lisa F8 years ago

Thanks for the article. At least SOMEONE is keeping us informed and not deciding for us what information we should know.