Benefits and Costs to Rural Alaska Households from a Carbon Fee and Dividend Program

Institute of Social and Economic Research, University of Alaska Anchorage / by Steve Colt

[Anchorage Dispatch News] Most rural Alaska households would benefit financially from a proposed national program designed to increase energy efficiency and move away from fossil fuels by charging a fee for carbon and returning dividends to households, a recent study by the University of Alaska Anchorage found.

Under the proposed “carbon fee and dividend” plan, all American households would pay extra for heating, electricity, transportation and other uses of energy in which heat-trapping carbon dioxide is a byproduct. To prevent the proposed plan from being punishing, especially to low-income households, the revenue collected would be distributed back to residents on the basis of household size. The dividend to Alaska residents of the Arctic would exceed the cost of the carbon fee, said the study that was released Wednesday, coincidentally, on the same day President Barack Obama announced federal “climate resilience” funding for the Arctic.

The plan, a market approach with some bipartisan support but also opposition in Congress, would bring an estimated $900 in net income for rural Alaska households of four or more in 2016, increasing to more than $3,600 by 2025. For small households of one or two people, carbon dividends would also exceed the higher cost of living…


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