A small group of Democratic and Republican House members plans to introduce a carbon tax bill this week, the first bipartisan climate legislation in a decade.
While it has virtually no chance of moving during the lame-duck session of Congress, the bill could be a starting point for climate legislation after Democrats assume House control in January.
According to a bill summary obtained by Bloomberg Environment, the measure would apply a $15-per-metric-ton carbon fee to the U.S. oil, gas, and coal industries, but rebate all of the revenue as a dividend to households to shield them from increased fossil fuel costs related to the carbon fee.
The bill, which has been in the works for months, is set to be introduced this week by Rep. Ted Deutch (D-Fla.), joined by Republican Reps. Brian Fitzpatrick (Pa.) and Francis Rooney (Fla.). It is meant to plant a flag for climate change efforts in the 116th Congress that opens in January, where Democrats will be in charge of the House for the first time since 2010.
Congress needs to act, Deutch said, citing increasingly dire scientific warnings of economic damage from climate change, including the latest U.S. National Climate Assessment issued Nov. 23.
“More than a dozen federal agencies just warned us that if we don’t take dramatic action, climate change will knock 10 percent off of our GDP by the end of this century,” Deutch said in a statement to Bloomberg Environment. “Putting a price on carbon can help change the behavior of polluters. We hope our bipartisan bill will spur action on climate change before it’s too late.”
Effort to Spark Discussion
The Energy Innovation and Carbon Dividend Act is meant to spark debate in what remains a long-shot bid to move broad climate legislation in the next two years—given that Republicans will still control both the Senate and the White House.
The bill’s backers also hope to bring some additional Democratic co-sponsors aboard before its formal introduction.
The bill’s $15-per-metric-ton carbon price is a modest starting point compared to the $24-per-ton proposal offered over the summer by Rep. Carlos Curbelo (R-Fla.), co-chairman of a bipartisan House climate caucus who lost his re-election bid Nov. 6.
While details could change before the bill is introduced, the Deutch bill as drafted would increase that $15-per-metric-ton carbon price by $10 per metric ton per year until certain targets are reached, which the authors project would lead to dramatic cuts in greenhouse gas emissions: a one-third cut over the next decade and a 90 percent emissions cut by 2050, all compared to 2015 levels.
Exemption for Agricultural Fuels
As drafted, the bill would exempt agricultural fuels from the carbon fee. It proposes a “regulatory adjustment” to avoid “duplicative” climate regulations, though which specific regulatory authority might be rolled back isn’t clear. Corporate Average Fuel Economy (CAFE) vehicle efficiency standards would remain in place, according to the bill description.
Democratic control of the House beginning in January comes nearly a decade after the collapse of President Barack Obama-backed cap-and-trade legislation. It’s unclear whether House Democrats next year might rally behind a carbon tax, or perhaps might try to resurrect cap and trade legislation.
“I think the likelihood that any significant climate legislation being agreed upon by a Republican Senate and a Democratic House is very slim, " said Alex Flint, a former Republican staff director for the Senate Energy and Natural Resources Committee.
And Sarah Hunt, CEO of the nonprofit Joseph Rainey Center for Public Policy, said Congress should “focus on achievable climate solutions first,” like increased support for energy technologies and research and development.
“Republicans and Democrats can agree on several greenhouse gas emissions reducing strategies, including building efficient infrastructure, clean energy sector job growth, and advanced energy technology R&D,” Hunt said.
Climate Solutions Caucus
But Flint, who now heads the Alliance for Market Solutions—which works to persuade Republicans to embrace a carbon tax—claimed that unveiling a bipartisan carbon tax bill now “confirms there has been an evolution among Republicans on how to address climate.”
“Climate change is much more important than partisan politics, and we’re gratified this group is moving forward together to address this urgent threat,” Mark Reynolds, executive director of the environmental group Citizens’ Climate Lobby, which has pushed for bipartisan carbon fee legislation that refunds the revenue to consumers, said in a statement to Bloomberg Environment. The group also sent volunteers to Washington earlier in November to advocate.
Deutch co-chairs a 90-member bipartisan House climate caucus formed in 2016 that, until Curbelo’s July bill, had produced little in the way of climate legislation or policy proposals.
Curbelo’s Market Choice Act (H.R. 6463) had only Republican backing—co-sponsored by Fitzpatrick and Rooney.
The fate of the Climate Solutions Caucus is unclear after Republican losses from the midterm elections, which along with retirements means nearly two dozen Republican members, nearly half of the party’s caucus membership, won’t return.
The focus of congressional efforts to grapple with climate change have shifted since the defeat of the cap-and-trade legislation backed by President Obama.
Democratic-led bills have focused on a carbon tax, including the American Opportunity Carbon Fee Act (S. 2368), introduced in the Senate in February by Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii), as well as the Healthy Climate and Family Security Act, introduced in the Senate in January (S. 2352) by Sen. Chris Van Hollen (D-Md.) and in the House (H.R. 4889) by Rep. Don Beyer (D-Va.).