What if there was a simple and powerful solution to climate change that would benefit the economy, avoid government growth, and preserve personal freedom? What if that solution would also grant a pass on agriculture fuel?

Sound too good to be true? The Energy Innovation and Carbon Dividend Act, introduced in the last Congress with 86 cosponsors, will be introduced again in this Congress. If you’re concerned about impacts of climate change on future generations of agriculture, it merits your consideration.

This legislation is based on the carbon fee and dividend concept. A steadily increasing price on the carbon content of fossil fuel is applied as close to the source (mine, well, or import) as practical. That price signal is passed on through the economy, raising the price of fossil fuel and carbon-intensive products for utilities and consumers.

After paying for the modest administrative costs of this simple policy, the net revenue is returned to the economy in the form of equal monthly dividends to each legal resident (those under 19 get half a share).

Dividend recipients are free to use it as they wish. If they want to keep using their gas guzzler, they can use their dividend to pay more for gasoline. They can use it for food if it costs more. With the increasing price on carbon, many will use their dividend to reduce their carbon use, for example, by purchasing a new or used electric vehicle. The market will provide more carbon-free products.

The carbon fee on fuel used for agriculture would be refunded under this legislation, like the highway fuel tax is refunded when fuel is used for agriculture. In addition, if the carbon emitted during fertilizer production is sequestered permanently underground, the carbon fee can be refunded to the manufacturer.

The price on carbon is substantial, increasing by $10 per ton CO2 emitted each year (equivalent to about 10 cents per gallon of gasoline), with national emissions reduction targets of 40% in 12 years and 90% by 2050.

The dividends are also substantial, rising to more than $3,400 per year for a family of four after ten years. For 61% of households, their dividend in the first year would exceed what they’d pay in carbon fees, and for 85%, it would be at least 98% of their carbon fees.

But what about China and India? To discourage businesses from shifting operations to countries without an equivalent price on carbon, this legislation includes a border adjustment that adds a carbon fee to imports from such countries, and distributes the revenue from that fee to U.S. exporters. This also motivates trading partners such as China and India to implement effective climate policies. Global carbon emissions decline.

Economists love this climate policy because it relies on market forces rather than mandates to drive down emissions. The market, not the government, picks the winners.

Republicans will love the policy because the government doesn’t keep the revenue.

Democrats will appreciate it because the dividend means more to the poor than the wealthy. (Note that neither the fee nor the dividend depends on personal income.)

Farmers can support it because it’s powerful enough to drive down most of the greenhouse gas emissions driving climate change but waives most costs of the policy to farmers.

Studies of its impact on the economy conclude that jobs will shift from carbon-intensive industries like fossil fuel extraction and refinement to a wide variety of carbon-lite industries, with a small net overall gain in jobs.

While this legislation is powerful, it is limited to emissions of CO2 and HFCs (hydrofluorocarbons used as refrigerants). Other legislation is needed to support reductions in emissions of other important greenhouse gases such as methane and nitrous oxide, and to reward CO2 removal and long-term storage. We’ve already written about the Growing Climate Solutions Act, which facilitates a market for sequestering carbon in soils and trees. Future columns will address emissions of methane and nitrous oxide.

You can be part of this solution to climate change by communicating your support for it. For more information, see energyinnovationact.org.

Steve Ghan is a highly cited climate scientist and leads the Tri-Cities Chapter of the Citizens Climate Lobby. He meets with mid-Columbia farmers to discuss agriculture and climate change. Kathleen Walker was raised by a hard-working Washington state farmer.

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