What is “cap and dividend’?



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    I have attached an animation that is the basic overview of how this program works. Allow me to also put it in text. The main concern is that we are polluting the earth with carbon, and are looking to expand more renewable energy sources. The idea is to “cap” the carbon flow into the economy, thereby “capping” the production. Then, permits will be auctioned off for hte right to use carbon and each year, the permits will be fewer and thus more expensive. In theory, as less people are buying into production of carbon, they are looking other energy sources.

    Here comes the divident part. It seems evident that now we, as citizens, will have to pay more for energy, which is true, but there is something sweet to this. The auction money (for the permits) will not be redistributed to citizens as dividents. As prices rise, you will see more money presented to you as a divident.


    Summary : Carbon flow into the economy is “capped”, permits for carbon are sold, the money from the permits is distributed amongst americans to compensate (at least partially) for the higher cost of energy.

    The idea is to move forward to clean energy sources and we are doing this by making it costly to use carbon.

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