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Give Kids the Money From Carbon Taxes

It will make the policies more politically palatable. And it will help compensate kids for the heated world they're inheriting.

Four-year-olds wear face masks during California wildfires in 2003. (Getty Images/Sandy Huffaker)

Children’s increasing prominence in efforts to slow climate change has provoked mixed reactions. Many, myself included, laud recent Time Person of the Year Greta Thunberg and her fellow youth activists as heroic leaders. Others consider them disrespectful pawns. Whatever one’s view, it’s clear that the young are going to be a major part of the climate fight moving forward. But there’s one way they could be incorporated that policymakers aren’t currently exploring and that could make a huge difference both for young people and for addressing climate change. We could decide to make children the direct beneficiaries of carbon taxes and cap-and-trade programs intended to mitigate the crisis.

Joining the two may seem arbitrary at first glance, but there’s a compelling moral case for funneling carbon tax revenue to educational and child-benefiting programs, even before one gets to the political payoff. Children are going to suffer disproportionately from the impacts of climate change. Reports estimate young children globally are going to suffer nearly 90 percent of the “disease burden” from climate change in terms of life-expectancy years lost, higher rates of disability, resurgence of previously dormant diseases, etc. This says nothing of the everyday impacts on childhood from having, for instance, far fewer days to play outside due to extreme heat and weather—or the effects of crop disturbance, home destruction, mass migration, and resource conflict throughout their lives.

It seems fair and just for children, therefore, to receive funds to help compensate for these damages.

This kind of logic has been used before, notably with funds from the Tobacco Master Settlement Agreement (MSA), originally established in 1998 to settle lawsuits between the four biggest U.S. tobacco companies and 46 state governments. These funds have been used to support both smoking-cessation efforts, and, since smoking ads and marketing targeted children specifically, everything from literacy to after-school programs. Similar to how the MSA required tobacco companies to pay for the ill effects of tobacco on society, carbon pricing serves to pull down money from large-scale emitters. (Any possible future lawsuit settlement or fine for fossil fuel companies, who knew about climate change decades ago and consciously fought to mislead the public, would offer an even more apt analogy to the tobacco situation.)

The idea behind dedicating carbon revenues to children’s services such as child care and public education would be to increase the next generation’s resilience when asked to face the challenges of climate-caused chaos. Since the physiological and neurological foundations of human development start at birth or before, the more we can ensure early physical, cognitive, and relational health—as well as high levels of educational attainment—the more capable children will be as adults when they are forced to adapt to an overheated world. And furthermore, the more we can invest in addressing current inequalities in child health and education, the more we can close the gaps climate change–related disruptions and disasters are predicted to magnify: Climate change is, after all, projected to hit low-income and historically marginalized communities particularly hard.

But there’s also a practical, political reason to insert children into carbon-pricing proposals. Children are the spoonful of proverbial sugar: They make any policy easier to message and easier for the public to accept. For instance, amid the highly divisive debate over American health care policy, public support for national children’s health insurance is incredibly robust, with large majorities of all political persuasions backing it. Similarly, successful soda tax campaigns have gotten over the line by dedicating revenues to children’s services: Philadelphia, for instance, tethered pre-Kindergarten slots to its victorious effort.

Carbon-pricing programs are an important target because they are proven both to reduce emissions and raise significant revenue. Take, for instance, the Regional Greenhouse Gas Initiative, a cap-and-trade coalition of 10 northeastern and mid-Atlantic states (with Virginia poised to become the eleventh). Between 2009 and 2016, the RGGI halved power-sector carbon dioxide emissions in member states while having no negative impacts on state economies. Meanwhile, the sale of carbon allowances raised, in 2016 alone, over $436 million.

At the moment, essentially all of the RGGI revenue is redirected into clean energy development. Around half goes to energy efficiency improvements, one-fifth to clean and renewable energy projects, and the rest is divided among other greenhouse gas reduction efforts, as well as direct energy-bill assistance. This is proper: After all, reducing emissions is ultimately what shapes how damaged a planet today’s children will inherit.

The Canadian province of British Columbia took a different tack. It instituted a straight tax instead of a cap-and-trade system, and it also decided to return every dollar of revenues back to residents via a series of tax credits and breaks. As with the U.S. states, British Columbia found the tax (one of the world’s most aggressive) had no deleterious effect on the economy and, in 2016, raised $1.2 billion for a province with a population slightly smaller than Colorado’s. However, unlike the RGGI, there were no investments in clean energy. The emissions reductions have been smaller, on the order of 5 to 15 percent.

The most promising path, then, seems to wind between these two approaches. If, say, 25 percent of carbon revenues were set aside for children, that creates a potentially game-changing pot of money for kids, while the bulk is reinvested in improving green infrastructure. As an illustrative example, consider a hypothetical in which Colorado mirrors British Columbia. Twenty-five percent of British Columbia’s carbon tax receipts equals $300 million. That figure would nearly triple the funding level of Colorado’s state pre-K program—which can currently serve fewer than half of eligible children—while reserving hundreds of millions for reducing emissions.

States are going to need to find what works for them when it comes to carbon-pricing mechanisms. There are pros and cons to a tax versus a cap-and-trade system—and its variants, such as cap-and-dividend, which explicitly returns revenues to consumers. As a World Resources Institute brief found in 2016, (emphasis in original), “[W]hile there are legitimate reasons to favor one form of pricing carbon over the other, if well designed, either a carbon tax or a cap-and-trade program can be the centerpiece of U.S. efforts to reduce greenhouse gas emissions.” In either case, bringing children into the mix is a viable, promising, and perhaps politically critical inclusion.

Carbon-pricing proposals—particularly more aggressive schemes—are not always popular ideas. In Oregon last year, Republican legislators literally fled the state to spike a vote on cap-and-trade. In 2014, Australia repealed a carbon tax that had only been in place for two years. One major reason, as Charles Frank of the Brookings Institution wrote, was that “the costs … were all too apparent, immediate, and substantial. The benefits were not apparent or easily explainable to the body politic.” A large body of climate communications literature confirms it’s hard for people to make perceived sacrifices for what feels like a vague, faraway gain. A policy that directly benefits children in the here and now is both apparent and easily explainable.

As the current federal administration continues to actively hinder efforts to fight climate change, leadership is increasingly flowing to the states. With more states considering carbon pricing while also wrestling with underfunded child care and public education systems, marrying these two seemingly unrelated policy areas could help solve multiple problems at once. Children could provide carbon-pricing programs a much-needed jump start in many states. And the pricing programs, in turn, could help secure those children’s future.