This paper analyzes the benefits and costs of a carbon fee‐and‐dividend (CFD) policy to
individual rural Alaska households. The three study area regions are the Bethel Census Area,
the Kusilvak Census Area, and the Northwest Arctic Borough. These three regions have the
state’s highest fuel prices and very cold climates.
The CFD policy consists of two elements. The first is a fee of $15 per metric ton of CO2
beginning in 2016 and increasing by $10 per ton in each subsequent year. The second is the
complete return of all fees to households in the form of dividends, which are estimated to
equal $300 for each adult plus $150 for each child (up to two). The annual dividends would
increase in future years commensurate with the nationwide total amount of fees.
Baseline conditions. The study area has a total population of about 32,000 people, many of
whom live in large households with low cash income. Fuel prices averaged $6.62 per gallon in
Table of Contents
Summary / Introduction / Dividends to households / Carbon fees paid by households / Discussion / References / Appendix A. Residential electricity use per household
Institute of Social and Economic Research, University of Alaska Anchorage
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