Washington, DC – As President Obama and Senate Democrats continue to make clear that they are not backing off in the fight against climate change following the election, U.S. Senator Sheldon Whitehouse today unveiled legislation that would reduce carbon pollution and generate as much as $2 trillion dollar over ten years – all of which would be returned to the American people. Whitehouse’s American Opportunity Carbon Fee Act, which is cosponsored by Senator Brian Schatz (D-HI), would correct a market failure that currently allows polluters to push the costs of their pollution onto everyone else.
“Right now we are subsidizing big polluters to the tune of hundreds of billions of dollars annually by allowing them to pollute for free,” said Whitehouse. “We all pay the costs of this subsidy through higher health costs, property damage from rising seas, warming waters that affect our fishing industry, and more. This legislation will put the costs of carbon pollution back on the polluters, and in doing so, will generate significant revenue – all of which will be returned to the American people.”
“With this bill we can take control of our economic future. This is one of the most straightforward solutions to climate change, and has growing support across the ideological spectrum,” said Schatz. “Republicans in the Congress are going to take some time to warm up to this proposal, but I am confident that they will listen to their consciences and their constituents, and join us on the right side of history.”
The American Opportunity Carbon Fee Act would require polluters to pay a fee for every ton of carbon pollution they emit. The fee would start at $42 per ton in 2015 and increase annually by an inflation-adjusted 2 percent. The price of the fee follows the Obama Administration’s central estimate of the “social cost of carbon,” the value of the harms caused by carbon pollution including falling agricultural productivity, human health hazards, and property damages from flooding.
The fee would be assessed on all coal, oil, and natural gas produced in or imported to the U.S. and cover large emitters of non-carbon greenhouse gases and carbon dioxide from non-fossil-fuel sources. The U.S. Department of Treasury would assess and collect the fee, working with the Environmental Protection Agency and Energy Information Administration to ensure the best research methods and data are used.
A study from Resources for the Future, a non-partisan think tank, estimates that a carbon fee tracking the social cost of carbon would reduce carbon pollution by about 50% within a decade from the electricity sector alone compared to business-as-usual. The electricity sector is the largest source of carbon pollution, emitting about 40% of annual emissions.
All revenue generated by the carbon pollution fee – which could exceed $2 trillion over ten years – would be credited to an American Opportunity Fund to be returned to the American people. Possible uses include:
- Economic assistance to low-income families and those residing in areas with high energy costs
- Tax cuts
- Social security benefit increases
- Tuition assistance and student debt relief
- Infrastructure investments
- Dividends to individuals and families
- Transition assistance to workers and businesses in energy-intensive and fossil-fuel industries
- Climate mitigation or adaptation
- Reducing the national debt
Senator Whitehouse spoke at length about this legislation on the Senate floor in introducing it. Video of his remarks can be seen here, and text is available here.
To download a copy of the bill, click here.
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