The political consensus is that a carbon fee (a/k/a carbon tax) is a loser. Any new tax is a long shot, and when you’re talking about one that will increase the cost of filling your gas tank, it’s an even longer shot.

But a recent blog post by Frank Lysy, an economist who was formerly with the World Bank, takes issue with that conventional wisdom. He drives home the point that if all the tax revenue goes back to the American people, as many of us in the climate community have proposed, AND if supporters do a better job of explaining this proposal, the votes may well materialize.

Lysy emphasizes that 70 percent of Americans would receive more in the form of a “dividend” than they pay in a carbon tax. As he explains it:

“The US Treasury published a study of this scheme in January 2017, and estimated that such a tax would generate $194 billion of revenues in its initial year (which was assumed to be 2019). This would allow for a distribution of $583 to every American (man, woman, and child – not just adults). Furthermore, the authors …concluded that…the bottom 70%, as ranked by income, would enjoy a net benefit, while only the richest 30% would pay a net cost.”

Critics often argue that a tax on consumption is unfair to those with low incomes. But, Lysy points out, “[t]hose in the poorest 10% of households would receive an estimated $535 net benefit per person from such a scheme. The cost of the goods they consume would go up by $48 per person over the course of a year, but they would receive back $583.” The reality is that the well-to-do consume a lot more energy and thus would pay much more in carbon taxes.

Lysy compared this carbon tax proposal to what used to be called the food stamps program (formally now called SNAP, for Supplemental Nutrition Assistance Program). It is the largest cash income transfer program in the U.S. designed specifically to assist the poor. “The carbon tax scheme would be of greater benefit than food stamps are, on average, for lower middle-class households (those in the 3rd decile and above),” he calculated.

And it’s not as if high-income Americans would suffer. “In dollar terms,” Lysy wrote, “the richest 10% would pay in a net $1,166 per person in this scheme… But this would be just 1.0% of their per-person incomes. The 9th decile (families in the 80 to 90th percentile) would pay in a net of 0.7% of their incomes, and the 8th decile would pay in a net of 0.3%.”

Lysy compares this free market approach to the alternative: a regulatory solution to climate change. “Such systems are not good, by their nature, at handling innovations, as by definition innovations are not foreseen,” he explains. “Yet innovations are precisely what one should want to encourage… A carbon tax program would similarly encourage innovations, while regulatory schemes can not handle them well.”

What about imports? “There would also be a border-tax adjustment on goods imported, which would create the incentive for other countries to join in such a scheme (as the US would charge the same carbon tax on such goods when the source country hadn’t, but with those revenues then distributed to Americans).”

To help win over skeptics, Lysy suggests sending initial rebate checks before the carbon taxes are to go into effect, an idea termed a “prebate.” That would help overcome the fear that somehow the revenue would go into government coffers and never come back.

Please encourage your U.S. senators and House member to take a fresh look at the numbers–and vote for this common-sense solution. Let’s not wait for more hurricanes, floods, droughts and wildfires.