Carbon tax shows new signs of life in Congress

By Miranda Green - 07/26/19 06:00 AM EDT  thehill.com

Members of Congress on both sides of the aisle are introducing competing bills that aim to put a tax on carbon.

The push to regulate greenhouse gas emissions come as both Democrats and Republicans face pressure from their constituents, and in some cases the fossil fuel industry itself, to regulate carbon emissions that lead to climate change.

Sen. Chris Coons (D-Dela.), Rep. Francis Rooney (R-Fla.) and Rep. Dan Lipinski (D-Ill.) all introduced carbon tax bills on Thursday that each take a shot at cementing the long tossed-around idea of a carbon fee. Those three bills join two other bipartisan measures proposing a carbon tax introduced earlier this year in the House and the Senate.

The influx of legislation is surprising some observers who have long called for action on climate change. They say they wouldn’t have believed a year ago that there would have been such a push.

“I can tell you from what I know is that we are worlds apart from the Congress that I left at the beginning of this year,” said Carlos Curbelo, a former Republican congressman from Florida who lost his reelection bid last year. 

Curbelo last year was the first Republican to introduce a carbon pricing bill in nearly a decade. He’s since joined Alliance for Market Solutions, a Republican to Republican focused carbon tax coalition.

“During my four years I think we made a lot of progress on changing the culture to make it acceptable to discuss this challenge, to name it for what it is — but even then a lot of Republicans were not anxious to engage,” he said.

“Today, not just rank and file from moderate districts, but leading Republicans, senior Republicans are stepping out on the issue, making it clear that the debate should be over solutions, not over science or anything else of that nature, and for me it’s a sign of real progress.”

Coon’s bill with Sen Dianne Feinstein (D-Calif.), the Climate Action Rebate Act of 2019, would start greenhouse gas fees at $15 per metric ton of carbon and gradually increase the fee over time.

It estimates the tax would bring in $12 billion in revenue, which would then be distributed in part as a rebate to low income families. A portion also would be used to invest in clean energy. The bill aims to reduce U.S. carbon emissions 55 percent by 2030 and achieve net zero emissions by 2050.

Rep. Jimmy Panetta (D-Calif.) has introduced a companion bill in the House. Coons had previously introduced a similar bill along with former Sen. Jeff Flake (R-Ariz.) last year. 

A second bill introduced by Rooney with Lipinski as a co-sponsor, the Stemming Warming and Augmenting Pay (SWAP) Act, would impose a $30 tax per metric ton of carbon. Revenues would be largely paid out to individuals through payroll taxes.

The tax would apply to fossil fuel producers and large industrial emitters, and would reduce energy-related carbon pollution by approximately 42 percent by 2030. It would also bar new regulations on power plants as long as they meet the emissions targets set by the bill. 

The final bill introduced by Lipinski with Rooney as the co-sponsor, entitled the Raise Wages, Cut Carbon Act of 2019, would spend revenue collected from the tax to cut payroll taxes, with a portion dealt to Social Security beneficiaries. That bill would start taxing carbon at $40 per ton but would raise the rate at a slower pace than the other bills.

Climate change has risen as a top issue for Democratic voters, and recent polls have shown it's a growing issue for young conservatives.

The flurry of bills suggest a new willingness on the part of lawmakers to try to take action.

While the various pieces of legislation differ largely based on what price carbon is initially set at, how quickly the rate is raised over time, and where the profits or dividends will be ultimately distributed or invested, some lawmakers involved expressed a willingness to negotiate over the details.

Coons described his introduced legislation as his “ideal bill” on carbon pricing, and then said it would be necessary to change parts of the bill to win GOP support.

“In order to get to a bipartisan bill there are a number of things that might have to change,” he said on a call with reporters Thursday.

As examples, he mentioned some of the money might have to go towards the research and development of new energy technologies and may have to consider a way to balance regulations so that power plants and other fossil fuel industries aren't both taxed and heavily regulated under the Clean Air Act.

Curbelo predicted that a final bill would likely see a mix of both a dividend return to Americans and a regulated investment somewhere.

“I certainly think that and thing that passes will have a dividend component to it, especially for low income families because that’s more of a moral issue,” Curbelo said. “But I doubt that whatever passes is going to include a universal dividend, or have all the money go out in the shape of a dividend because I think most members of Congress will want to direct some of those resources to other priorities.”

Long-time supporters of a carbon tax praised the spark of new legislation.

“We are excited to see Republicans and Democrats focusing their attention on the effective tool of carbon pricing,” said Danny Richter, vice president of government affairs for the Citizens Climate Lobby.

“The climate is neither Democratic nor Republican, nor is it waiting around for us to resolve our political differences... We need to build more bridges between the two parties, and have more bipartisan dialogue, if we are to take meaningful action.”

Many Republicans have opposed the idea of a carbon tax.

House Minority Whip Steve Scalise (R-La.) introduced a resolution earlier this year that expressed “the sense of Congress that a carbon tax would be detrimental to the United States economy.”

President Trump also seems unlikely to sign a carbon tax, though some Democratic presidential candidates have been embracing the issue.

“As long as our president continues to insist climate is a hoax and as long as he is the most forceful voice in the Republican party, that creates a headwind,” Coons said.

Curbelo, however, didn’t discount the idea that Trump could back a carbon tax.

“Like with all things Trump, it’s totally unpredictable. I could see him doubling down on what I think is highly responsible approach to this, or I can see him drastically changing course and concluding this is a good issue politically,” he said.

Coons described the bills as a first step.

“I think long term, part of what we are doing here is putting out ideas and seeing what the response is both from other members and advocacy organizations.