Whereas, increased levels of greenhouse gases (GHG) such as carbon dioxide and methane are the primary causes of climate change; and

Whereas, climate change is an existential threat to life on earth; and

Whereas, the Obama administration estimated the economic damages imposed by climate change to be $51 per ton of carbon dioxide emissions; and

Whereas, these costs of climate change present a significant financial risk to the CalSTRS and CalPERS portfolios and the current and future retirement income security of California educators; and

Whereas, some retirement systems in the United States and Europe, including CalSTRS have made the commitment to move their investment portfolios toward net zero by 2050; and

Whereas, the CFT has supported efforts to change the behavior of fossil fuel companies by putting pressure on them through financial markets; and

Whereas, the CFT has supported efforts to change the behavior of fossil fuel companies through direct regulations, as in trying to block the use of fracking to extract oil in California; and 

Whereas, it is essential for the transition to a low-carbon economy to happen as quickly as possible, which will require multifaceted interventions beyond just financial markets; and 

Whereas, in market-based economy, people respond to prices and if the price of something goes up, people will try to find substitutes for it; and

Whereas, if the price of something is zero, too much of it will be used; and

Whereas, currently the market price for carbon pollution is zero and as a result, too much carbon is being pumped into the atmosphere; and

Whereas, it is essential to reduce the amount of carbon dioxide and other GHG being pumped into the atmosphere; and

Whereas, a use fee on all forms of carbon will increase the cost of using carbon in many different sectors of the economy; and

Whereas, this increased cost will encourage all members of society to find ways to reduce their use of hydrocarbons, whether in the form of heating, transportation, plastics or the purchase of items that must be transported over long distances; and

Whereas, the more people searching for alternatives to the use of fossil fuels to provide energy the more demand there will be for alternatives; and

Whereas, the increased demand for alternatives will lead to more experimentation to develop those alternatives; and

Whereas, paying for the full cost to society created by the use of fossil fuels will increase the cost of many (most) items sold in the economy and this will impose a burden on low- and middle-income households, who have the least resources available to adjust their spending habits; and

Whereas, the revenue raised from a carbon use fee could be used to offset this increased burden on low- and middle-income households by rebating some of the revenue back to these households; and

Whereas, some of the revenue raised from a carbon use fee could be used to subsidize the transition to low- or zero-carbon solutions in many industries, especially transportation and retrofitting residential buildings; and 

Whereas, some of the revenue raised by a carbon use fee could be used to assist and retrain workers whose jobs will be eliminated in the transition to a low- or zero-carbon economy; and

Whereas, several European Union countries, South Africa and Canada, have seen reductions in greenhouse gas emissions following the implementation of a carbon use fee; and

Whereas, multiple carbon fee and rebate bills have been introduced in Congress between 2019 and 2021; and

Whereas, carbon fee and rebate bills have also been introduced in state legislatures, including Oregon; and

Whereas, achieving a low carbon economy will require a multifaceted approach including direct regulation of the use of fossil fuels, putting a price on carbon is an essential part of this multifaceted approach;

Therefore, be it resolved, the CFT supports legislative efforts at the national or state level to implement a use fee on all forms of carbon used in the economy, as long as that legislation includes a method to rebate some of the revenue from the use fee to ensure low- and middle-income households will not see a reduction in their standard of living; and

Be it further resolved, the CFT supports the allocation of some of the revenue raised by a carbon use fee to support, assist, and retrain workers whose jobs are eliminated in the transition to a low- or zero-carbon economy; and

Be it further resolved, the CFT supports the allocation of some of the revenue raised by a carbon use fee to subsidizing the transition to a low- or zero-carbon economy, especially in the areas of transportation, residential retrofitting and energy production; and

Be it finally resolved, the CFT forward this resolution to the AFT Convention.

• Passed by State Council on March 19, 2022
• Submitted by the Retirement Policy Committee