This compensation is to offset the cost of products produced by companies that raise prices to consumers as a result of this policy.
Under the cap and dividend system, public revenues raised from the sale of pollution credits is rebated to citizens or to consumers as a subsidy for increasing efficiency.
The concept is simple: a limit or cap is placed on greenhouse gases from certain sources; these sources are required to obtain permits to cover their greenhouse gas emissions and dividends from the sale of the permits are returned directly to consumers through rebates or tax credits to compensate for increased energy costs.
[4]For definitions on Cap-and-Trade, see emissions trading The idea was first proposed by American entrepreneur Peter Barnes under the name "Skytrust" in his 2001 book, Who Owns the Sky?.
[5] The name was changed in advance of the 2008 elections by Barnes as he began an effort to raise the profile of the idea with a new book, Climate Solutions: A Citizens Guide[6] and numerous media interviews.
[10] The policy was vigorously debated with Joe Romm calling it "fatally incomplete"[11] and Time magazine hailing it as a way to "Win the War on Global Warming".
put a bill before Congress on April 1, 2009, pertaining to carbon reductions and including the cap and dividend system.
[14][16] Congressman Van Hollen again tried to introduce a Cap and Dividend bill in July 2014, but it did not pass as an act.
[17][18] Several elder statesmen of the Grand Old Party (GOP), namely former Secretaries of State James Baker and George Shultz and former Treasury Secretary Hank Paulson, co-authored a report with Ted Halstead of Climate Leadership Council; and economists Martin Feldstein and Greg Mankiw; calling upon President Trump to introduce cap and dividend.
With a policy like this it will affect not only the major companies that will be taxed but also every household through a chain reaction of product price increases.
This will benefit the poor the most because of their living situations and this is found to be a problem with many people critiquing the policy.