Climate Change Terminology

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carbon dividend

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A payment made to citizens from revenue generated by a carbon tax. A carbon dividend could incentivize public support for environmental taxes.

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market-based solution

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A solution relying on supply and demand rather than regulation. Market-based solutions can be more flexible than government-imposed restrictions.

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bipartisan

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Supported by members of both political parties. A bipartisan agreement is crucial to implement long-term climate reforms.

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emissions reduction

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The act of lowering greenhouse gas output. Effective policies must result in significant emissions reduction to curb climate change.

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revenue-neutral

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A tax system in which all revenue collected is returned or offset. A revenue-neutral carbon tax may avoid opposition from taxpayers.

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fee-and-dividend system

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A carbon tax system where fees are collected and redistributed. The fee-and-dividend system appeals to both environmentalists and fiscal conservatives.

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technological innovation

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Development of new technology to solve problems. Technological innovation is often driven by market signals and government incentives.

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regressive impact

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An effect that disproportionately burdens the poor. Carbon taxes may have a regressive impact unless properly offset with dividends.

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fossil fuel companies

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Companies involved in the extraction and sale of coal, oil, or gas. Fossil fuel companies are likely to resist carbon pricing schemes.

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price signal

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An economic indication that guides consumer or producer behavior. A rising carbon fee sends a strong price signal to reduce fossil fuel consumption.