Today, Senators Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI) and Congressmen Earl Blumenauer (D-OR) and David Cicilline (D-RI) introduced legislation to place a price on the carbon pollution driving global climate change and putting Americans’ health and safety at risk. The American Opportunity Carbon Fee Act, which Schatz and Whitehouse will unveil at the American Enterprise Institute on Wednesday afternoon, would significantly lower the nation’s greenhouse gas emissions while generating substantial revenue to boost the economy and aid American consumers.
“A basic principle of market economics is that the price of a product should reflect the cost of the harm it causes,” said Senator Whitehouse. “That’s why virtually every serious conservative expert backs a price on carbon to address climate change. This bill would fight carbon pollution with the full power of the free market, driving down emissions and leveling the playing field for carbon-free energy. It could also boost American competitiveness by lowering taxes for businesses, offsetting costs to families, and helping American workers in coal country and around the nation. I look forward to presenting this bill with Senator Schatz today, and thank Congressmen Blumenauer and Cicilline for joining us to introduce it. Now I hope our Republican colleagues join the conservative push for a carbon fee and help us move this bill forward.”
Senator Whitehouse’s as-prepared remarks at the American Enterprise Institute event today can be accessed here.
“A price on carbon pollution is one of the best options we have for bipartisan action, and it is one of the best options we have for tackling climate change,” said Senator Schatz. “Climate change can no longer be a partisan issue. We need bipartisan leadership, and market-based solutions have support across the ideological spectrum. Our bill would establish a set of incentives that allows capital to flow and businesses to thrive when they use clean energy, letting the free market pick winners and losers. The price on carbon in our bill is predictable, straightforward, and gets the carbon pollution reductions we need to fight climate change.”
Senator Schatz’s as-prepared remarks at the American Enterprise Institute event today can be accessed here.
Carbon pollution from human activity is changing our climate, harming our economy, health, and environment. The United States is currently the second-largest source of carbon pollution in the world and has emitted more carbon dioxide than any other nation in history.
“If we don’t act on climate now, future generations will shoulder the devastation of increased temperatures, rising sea levels, and environmental degradation,” said Congressman Blumenauer. “The United States is a major contributor to global carbon pollution. Putting a price on our emissions is critical in our fight against climate change. Our proposal is the jumping off-point we need to put the burden on polluters and not our most vulnerable, as well as grow the clean economy and create jobs.”
“Climate change is a real and growing threat to all Americans,” said Congressman Cicilline. “This bill implements important strategies to address this danger and strengthen our economy. It will drive down greenhouse gas emissions and make American companies more productive in a global economy.”
To ensure emitters are held responsible for the harm they offload onto the American people, the American Opportunity Carbon Fee Act would assess a fee on fossil fuels and other sources of greenhouse gases. The fee would start at $49 per metric ton of emissions in 2018—the mid-range of the Obama Administration’s 2016 estimates of the “social cost of carbon,” which measures the long-term damage done by carbon pollution—and increase annually by 2 percent over inflation. It would be assessed on fossil fuels when mined, processed, refined, or imported; on large emitters of non-fossil-fuel-based greenhouse gases; and on producers and importers of certain industrial gases with high global warming potential. The fee on fossil fuels would be adjusted to account for methane emissions from venting, carbon dioxide from flaring, and other greenhouse gas emissions that escape throughout the fossil fuel supply chains. The Treasury Department would assess and collect the fee, and impose border adjustments to level the playing field for manufacturers of energy-intensive goods.
A growing number of prominent Republicans have come out in support of a carbon fee, including former Treasury Secretaries James Baker, George Shultz, and Henry Paulson; former Environmental Protection Agency Administrators William Ruckelshaus, Lee Thomas, William Reilly, and Christine Todd Whitman; and leading economists and former presidential economic advisors Arthur Laffer, Gregory Mankiw, and Douglas Holtz-Eakin.
According to the independent, nonpartisan think tank Resources for the Future, the bill would reduce energy-related carbon dioxide emissions by 36 percent compared to 2005 levels by 2025. By the middle of the next decade, it would lead the United States to beat its carbon emissions targets set forth in the 2016 Paris Agreement pledge, Resources for the Future found, and it would deliver more than twice the utility-sector carbon reductions by 2030 than the Obama administration’s Clean Power Plan.
The revenue generated through the fee—an estimated $2.1 trillion in the first decade—would be used to:
- Reduce the top marginal corporate income tax rate from 35 percent to 29 percent;
- Offer workers an annual inflation-adjusted $550 refundable tax credit to offset payroll taxes paid ($1,100 for married couples filing jointly);
- Provide Social Security and veterans’ program beneficiaries and other retired and disabled Americans with an inflation-adjusted annual benefit beginning at $550; and
- Deliver at least $10 billion annually in grants to states to help low-income and rural households and workers transitioning to new industries.
Earlier this year, American companies like Procter & Gamble, General Motors, PepsiCo, and ExxonMobil announced support for a “gradually rising” carbon fee—not unlike the American Opportunity Carbon Fee Act. The corporations and conservative leaders took out a full-page ad in the Wall Street Journal stating that such a plan “would achieve significantly greater emissions reductions than all current and prior climate regulations, while helping America’s businesses and workers get ahead.”
Summaries of the American Opportunity Carbon Fee Act can be accessed here and here.
