Legislation that would pay people to improve the environment and mitigate climate change has been introduced in Congress and in the Hawaii Legislature — House Bill 2278 and Senate Bill 2732 are the state proposals.

Putting a gradually rising tax on fossil fuels coming into our economy and passing along the collected money to our residents is a strategy that will help us transition to cleaner energy and transportation. Pricing is a powerful solution as it incentivizes a system-wide change in consumer and producer behavior.

Yes — fuel and energy prices would also go up gradually. However, the increases would be offset if the revenue is returned to residents as dividends in the form of a refundable tax credit.

Importantly, residents would be rewarded for conserving energy (installing energy-efficient lighting, heating and appliances, and driving energy-efficient cars), carpooling, using public transportation, opting for renewable energy and other energy-saving and emission-reducing practices.

This change in public and business behavior will encourage additional investment in products and services less dependent on fossil fuels — pricing carbon creates a virtuous cycle.

A price on carbon is widely recognized as an effective way to reduce the emissions that threaten our planet. Governments in Canada and the European Union have implemented pricing strategies. Business organizations, including the Business Roundtable and the Silicon Valley Leadership Group, have endorsed carbon pricing.

The Intergovernmental Panel on Climate Change called carbon pricing essential to decarbonization. Scores of Nobel laureate economists have endorsed pricing carbon. Many faith groups support carbon pricing. Pope Francis declared carbon pricing essential to addressing global warming.

Hawaii’s leaders have also been at the forefront of creating the will for carbon pricing — U.S. Rep. Kai Kahele and U.S. Sen. Brian Schatz have co-sponsored carbon pricing legislation in Washington.

Locally, Representatives Nicole Lowen and Karl Rhoads have been persistent in introducing local carbon pricing. Along with the rest of the Environmental Legislative Caucus, they have introduced a legislative package that includes a carbon pricing policy.

The package covers a host of proposals designed to address critical environmental challenges — climate change, Red Hill, habitat preservation and wastewater management.

Pricing carbon creates a virtuous cycle.

The proposed carbon pricing policy would tax fossil fuels and return the revenue to residents through a refundable tax credit or a dividend check. A University of Hawaii study shows that most Hawaii households would come out ahead financially, especially low-income households.

In one scenario, the average low-income household would receive $900 more in refundable tax credits than it would spend on the tax increase.

This policy offers Hawaii a progressive approach to address social equity and enable a just transition while reducing fossil fuel consumption.

The climate crisis requires a multi-pronged approach to reducing emissions, capturing greenhouse gases and preparing for inevitable consequences. There are many important solutions in each of these areas, and we need to support those that are most effective and equitable.

Putting a price on carbon and returning revenue to people is one such solution.

Our efforts alone will not solve climate change, but we can lead by showing the way forward and encouraging others to implement one of the most effective ways to address climate change — a price on carbon with revenues returned to households.