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Had enough yet? Last month was the hottest March on record worldwide; global carbon emissions are tracking the IPCC’s worst-case scenario; poverty-stricken India is now shouldering a carbon mitigation burden greater than ours; and the Senate’s score on cap-and-trade is holding steady at zero. The latest effort collapsed on Saturday, when the sole Republican co-sponsor of proposed legislation, Senator Lindsay Graham, tossed his glove to the Democrats and walked off the field.

The bill was a shambles anyway, after a lobbyist frenzy left little more than the carcass of cap-and-trade, wrapped in a shroud marked Green Jobs and hidden under a table groaning with pork for other interests.

The message here is clear: This kind of boodling masquerade is simply not going to work.

Fortunately, the bipartisan alternative is also CLEAR – the Carbon Limits and Energy for America's Renewal Act (S. 2877), co-sponsored by Democratic Senator Maria Cantwell of Washington and Republican Senator Susan Collins of Maine. The bill is simply designed and easy to explain:

  • 100% focus on carbon emissions reduction;
  • a steadily-declining cap on the carbon content of fossil fuels;
  • 100% auction of tradable permits within the cap;
  • flexibility to increase auctioned permits if the auction bumps into a steadily-escalating price ceiling;
  • no offsets allowed;
  • revenues split among tax free “energy security dividends” to be distributed to U.S. residents, subsidies for clean energy promotion, and a fund to help firms disadvantaged by international competition. 

The details are negotiable, but there’s no doubt that this approach can put us on the path to globally-responsible emissions reduction. And, equally important, it gets the politics right. As I argued in a working paper and a blog two years ago after the Warner-Lieberman bill failed, cap-and-trade can only succeed if America’s working families get behind it. And they won’t, unless they get a piece of the action big enough to allay their concerns about affording higher energy costs. The CLEAR Act opens the way, with its proposal for distributing a large portion of the auction revenues as dividends to American families.

CertificateI would go one step further, as I argue in my working paper on the failure of Warner-Lieberman: Give Americans tangible, tradable claims on the stream of dividends, so that families can treat them as stocks and sell them to help finance college educations, homes, or household clean energy systems, as CLEAR raises the relative price of fossil-fired energy. In the paper, I call these tangible claims CASH (Certified Atmospheric SHare) certificates, and show how they will benefit American taxpayers, especially poor working families.

Bravo, Senators Cantwell and Collins! In spite of the turmoil and posturing around you, you’ve stayed bipartisan, focused, and fair. And you’ve demonstrated that excellent bipartisan legislation is indeed possible. Now it’s up to us to get behind you and convince America’s working families to join us. They have everything to gain, and we all have everything to lose if they don’t. Putting some CASH into Americans’ pockets would be a great way to give this solid legislation a boost.

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CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.