A carbon fee and dividend or climate income is a system to reduce greenhouse gas emissions and address climate change. The system imposes a carbon tax on the sale of fossil fuels, and then distributes the revenue of this tax over the entire population (equally, on a per-person basis) as a monthly income or regular payment. Since the adoption of the system in Canada and Switzerland, it has gained increased interest worldwide as a cross-sector and socially just approach to reducing emissions and tackling climate change. Designed to maintain or improve economic vitality while speeding the transition to a sustainable energy economy, carbon fee and dividend has been proposed as an alternative to emission reduction mechanisms such as complex regulatory approaches, cap and trade or a straightforward carbon tax. While there is general agreement among scientists and economists on the need for a carbon tax, economists are generally neutral on specific uses for the revenue, though there tends to be more support than opposition for returning the revenue as a dividend to taxpayers. Structure The basic structure of carbon fee and dividend is as follows: A fee is levied on fuels at their point of origin into the economy, such as the well, mine, or port of entry. The fee is based upon the carbon content of a given fuel, with a commonly-proposed starting point being of carbon that would be emitted once the fuel is burned. The fee is progressively increased, providing a steady, predictable price signal and incentivizing early transition to low-carbon energy sources and products. A border tax adjustment is levied on imports from nations that lack their own equivalent fee on carbon. For example, if the United States legislated a carbon fee-and-dividend system, China would face the choice of paying carbon fees to the United States or creating its own internal carbon pricing system. This would leverage American economic power to incentivize carbon pricing around the world. Some or all of the fee is returned to households as an energy dividend. Returning 100% of net fees results in a revenue-neutral carbon fee-and-dividend system; this revenue neutrality often appeals to conservatives, such as former Secretary of State George Shultz, who want to reduce emissions without increasing the size and funding of the federal government. In order to maximize effectiveness, the amount of the fee would be regulated based on the scientific assessments from both economic and climate