Is 2019 The Year a Federal Carbon Tax Will Finally Pass?February 4, 2019
In 2018, carbon dioxide emissions in the United States rose an estimated 3.4 percent compared to previous years. Despite coal plants retiring last year, greenhouse gas emissions from “factories, planes, and trucks soared.” As climate change impacts continue to be realized both internationally and domestically, U.S. legislators are seeking innovative solutions to mitigate and account for the impacts from greenhouse gases and other harmful emissions.
Legislators at the state and federal level continue to propose policies to try to combat this growing problem. California legislators were successful in enacting the California Cap and Trade Program, which began in 2012. Similarly, the Regional Greenhouse Gas Initiative (“RGGI”) comprised of Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont is a market-based program to reduce greenhouse gas emissions, which began in 2009. At a federal level, legislators up to this point have been unsuccessful in passing a carbon pricing program.
On January 24, 2019, Representative Ted Deutch of Florida, along with six other Representatives (five Democrats and a Republican) reintroduced a bipartisan bill in the U.S. House of Representatives to enact a carbon tax. H.R. 763’s goal is “to create a Carbon Dividend Trust Fund for the American people in order to encourage market-driven innovation of clean energy technologies and market efficiencies which will reduce harmful pollution and leave a healthier, more stable, and more prosperous nation for future generations.” The Bill has been referred to the Committee on Ways and Means, the Committee on Energy and Commerce, and the Committee on Foreign Affairs.
On January 24, 2019, Representative Ted Deutch of Florida, along with six other Representatives (five Democrats and a Republican) reintroduced a bipartisan bill in the U.S. House of Representatives to enact a carbon tax.
The proposed Bill is similar to H.R. 7173, The Energy Innovation and Carbon Dividend Act of 2018, that was introduced in November 2018, but remained stuck in Congress during last session. H.R. 7173 proposed a $15 per metric ton of emissions on producers or importers of fuels that are used to emit greenhouse gases into the atmosphere. H.R. 763 proposes to begin at a similar $15 per metric ton tax, but then to raise the carbon tax to “$100 per metric ton within a decade, making it one of the most ambitious carbon-pricing policies in the world.” H.R. 763 also differs from H.R. 7173 by updating the emission targets. As proposed in H.R. 7173 agricultural fuels would remain exempt in H.R. 763.
The proceeds generated from H.R. 763 are proposed to be directed to individual households that would have higher energy costs due to the carbon tax. The goal of the bill is to ensure those who may be most impacted by higher electric bills or gasoline prices will be protected. Not only will vulnerable populations be protected financially, but also H.R. 763 is estimated to reduce deaths related to air pollution by 114,000 per year. Prior to the November 2018 Energy Innovation and Carbon Dividend Tax Act, it was a decade since a bipartisan carbon pricing program was introduced. The reintroduced H.R. 763 bill only has one Republication co-sponsor. With the current Republican Senate and the Trump Administration’s opposition to climate change related programs, it is unclear what action will be taken on the proposed H.R. 763. Other concerns with H.R. 763 are with regards to the administrability. There are concerns related to applying the tax across various industries and how it would be tracked with overseas emissions.
Erin Grubbs, 28 January 2019