Carbon Pricing Bills in Congress

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Carbon pricing bills submitted in the past three sessions of the U.S. Congress are reviewed in terms of price, the rate of increase, where the fee is assessed, revenue distribution destination, border, COequivalency, exemptions, notes, and CCL’s overall take.
 
116th Congress

Rep. Deutch: Energy Innovation and Carbon Dividend Act of 2019

Bill number: H.R. 763, Introduced on January 24, 2019.

Status: Introduced by Representatives Ted Deutch (FL-27), Francis Rooney (FL-19) Daniel Lipinski (IL-3), Charlie Crist (FL-13) Scott Peters (CA-52), Anna Rep. Eshoo (CA-18), and Judy Chu (CA-27).

Initial price: $15 per ton of CO2-eq in 2019.

Rate of increase: $10 annually above inflation unless emissions targets for previous year have not been met in which case the increase is $15 for that year. Fee stops increasing when emissions reach 10% of 2016 levels.

Where assessed: Upstream.

Revenue destination: Revenue generated would distributed evenly to citizens or lawful resident of the United States on a monthly basis. Pro Rata Adults 1 share, Children half share. Administrative costs may not exceed 2% after the first 5 years (8% years 1-5). 

CO2-eq: Includes non-CO2 GHGs and places the fee according to their global warming potential (GWP). A fee is also levied on the GHG potential of certain fluorinated gases at 10% of carbon fee rate. 

Border: Fossil fuels and carbon intensive goods are border adjusted, imports pay a fee equivalent to current US price and exports receive a refund.

Exemptions: Exemption and refund of fee for fuels not combusted (e.g. oil used in plastics) as well as Military and Agriculture. Fuels for military and farm use are exempted via refund. Refund available for when qualified carbon dioxide is captured and sequestered in a safe and permanent manner.

Regulatory Adjustment: To avoid imposing both taxation and regulation of greenhouse gases, this bill adjusts certain existing greenhouse gas regulations which would become redundant, conflicting, or duplicative by enactment of this policy. 

CCL's take: CCL is excited to have the carbon fee and dividend style bill we have been working on for over 8 years introduced as the Energy Innovation and Carbon Dividend Act. 

Van Hollen: Healthy Climate and Family Security Act of 2019

Bill number:  S. 940, introduced on 3/28/2019

Status: Introduced, referred to the Senate Finance Committee.

Initial prices: Set at auction, beginning in 2020. The Secretary of the Treasury, in consultation with the EPA Administrator, will determine the initial quantity of carbon permits to be auctioned. At least 4 auctions per year. Permits turned in at end of year. Secretary has the authority to set a minimum auction price.

Decrease in cap: Cap begins in 2020 and requires CO2 emissions reductions of 35% by 2025, 50% by 2030, and 80% by 2040 below 2005 levels.

Where assessed: Midstream to upstream (coal mine, oil refinery, entity delivering natural gas to end user, importer).

Revenue destination: Deposits carbon permit auction proceeds into a Healthy Climate Trust Fund at the Treasury and instructs the Treasury to distribute auction proceeds quarterly on a pro-rata basis in the form of a Healthy Climate Dividend to every lawful resident of the United States with a valid Social Security number. No mention of minors or children. Dividends excluded from gross income.

The cap: Entities that fail to obtain a permit in time will have to pay 3x the previous year’s average permit price. If price increases more than 50% above previous 2 years’ average, can issue extra permits from permit reserve or from 2030-2040, reducing cap in each of these years by an equal percentage.

Trading: Lawful holder of a permit may sell, exchange, or transfer the carbon permit to a covered entity consistent with the limits established by the Secretary. Establishment of a system for issuing, recording, holding, and tracking carbon permits.

Border: Includes border adjustment provisions to ensure U.S. manufacturers are not disadvantaged when competing against companies operating in countries without equivalent greenhouse gas emissions reduction requirements.

CO2-eq: Directs study, due in 2 years, to investigate non-CO2 GHG emission. Emissions related to animal or food production explicitly excluded. Uses regulations to attack other GHGs, beginning 4 years after implementation (25% of GHGs covered), and no later than 10 years 100% of GHGs have regulations.

Exemptions: Non-emitting uses, “safe and verifiable” carbon capture and sequestration.

CCL’s Take: We full-heartedly applaud the revenue neutrality of this bill, as well as the decision to return the revenue as a dividend. Furthermore, the structure of the cap in this 28-page bill appears both elegant and effective. However, CCL chose in 2009 to support a fee instead of a cap-and-trade program for reasons that are as true today as they were then. Cap-and-trade is our second-favorite solution, but we continue to believe a straightforward rising fee is a more efficient mechanism for reducing emissions than a declining cap, and that it has a better chance of winning bipartisan support.

Rep. Don Beyer: Healthy Climate and Family Security Act of 2019

Bill number: H.R. 1960, introduced on 3/28/2019

Bill text the same as Van Hollen Healthy Climate and Family Security Act of 2019
 

Sens. Whitehouse-Schatz-Heinrich-Gillibrand: American Opportunity Carbon Fee Act of 2019

Bill number: S.1128, Introduced on April 10, 2019.

Status: Introduced by Senator Whitehouse (RI) with Senator Schatz (HI), Senator Heinrich (NM), and Senator Gillibrand (NY) as original co-sponsors.

Initial price: $52 per ton of CO2-eq in 2020.

Rate of increase: 6% annually above inflation until emissions goal (i.e. 80% of 2005 emissions) is reached. Then, increases only with inflation.

Where assessed: Upstream to midstream.

Revenue destination: Revenue generated would be used to: 

  1. Give carbon fee offset credit against the tax imposed by this subtitle for the taxable year an amount equal to the lesser of— 6.2 percent of the earned income of the taxpayer, or $900. 
  2. Provide Social Security and veterans’ program beneficiaries and other retired and disabled Americans with an inflation-adjusted annual benefit 
  3. Deliver at least $10 billion annually in grants to states to help low-income and rural households and workers transitioning to new industries.

CO2-eq: Includes non-CO2 GHGs and places the fee on them immediately according to their global warming potential (GWP). Fluorinated gases produced in the US or imported are taxed at a fee that equals the applicable percentage (table included in bill) of CO2 equivalent multiplied by the same rate for CO2.

Border: Fossil fuels are border adjusted, as are other goods which the Secretary of the Treasury has determined are at a competitive disadvantage.

Exemptions: Refund available for sequestered carbon and non-emitting uses of fossil fuels. Exemption for exports of fluorinated greenhouse gases produced or imported into the US if they are in equipment precharged or in closed cell forms. Refunds are also given for entities that use fluorinated greenhouse gases so that it cannot be emitted later or that destroys the gas without emissions.

CCL's take: This bill is aimed very clearly at attracting Republican co-sponsors, and for the Senator sponsors are to be roundly applauded and thanked. This bill also pioneers new ground in just how a dividend could be efficiently returned to households at low cost. We fear the initial price is too high, and the rate of increase is too low (even though it has been raised since the last introduction). Of course, we prefer a straightforward and equal 100% dividend of net revenue to households.

Similar Bills 115th Congress.pdfSimilar Bills 115th Congress.pdf117 KB
115th Congress

1. Rep. Delaney: Tax Pollution, Not Profits Act of 2017
Bill number: H.R. 2014, April 6, 2017

2. Whitehouse–Schatz: American Opportunity Carbon Fee Act of 2017
Bill number: S.1639, July 26, 2017

3. Reps. Blumenauer - Cicilline: American Opportunity Carbon Fee Act of 2017
Bill number: H.R. 3420, July 26, 2017

4. Rep. Larson: America Wins Act of 2017
Bill number: H.R.4209, November 1, 2017

5. Sen. Van Hollen: Healthy Climate and Family Security Act of 2018
Bill number:  S.2352, January 29, 2018

6. Rep. Beyer: Healthy Climate and Family Security Act of 2018
Bill number: H.R.4889, January 29, 2018

7. Rep. Curbelo: Market Choice Act of 2018
Bill number: H.R. 6463, July 23, 2018

Similar Bills 114th Congress.pdfSimilar Bills 114th Congress.pdf215 KB
114th Congress

1. McDermott: Managed Carbon Price Act of 2015
Bill number: H.R. 972, February 13, 2015.

2. Van Hollen: Healthy Climate and Family Security Act of 2015
Bill number: H.R. 1027, February 24, 2015.

3. Delaney: Tax Pollution, Not Profits Act of 2015
Bill number: H.R. 2202, May 1, 2015.

4. Whitehouse-Schatz: American Opportunity Carbon Fee Act of 2015
Bill number: S. 1548, June 10, 2015.

5. Larson: America’s Energy Security Trust Fund Act of 2015
Bill number: H.R. 3104, July 16, 2015.

6. Sanders: Climate Protection And Justice Act of 2015
Bill number: S. 2399, December 10, 2015

7. McNerney: Consumers Rebate to ban Emissions and Boost Alternative Energy (REBATE) Act
Bill number: H. R. 4283, December 17, 2015

 
Similar Bills 113th Congress.pdfSimilar Bills 113th Congress.pdf136 KB
113th Congress

1. Sanders-Boxer: Climate Protection Act of 2013
Bill number: S. 332, February 14, 2013.

2. Larson: America’s Energy Security Trust Fund Act of 2014
Bill number: H.R. 5307, July 31, 2014.

3. McDermott: Managed Carbon Price Act of 2014
Bill number: H.R. 4753, May 28, 2014.

4. Van Hollen: Healthy Climate and Family Security Act of 2014
Bill number: H.R. 5271, July 30, 2014.

5. Whitehouse-Schatz: American Opportunity Carbon Fee Act
Bill number: S. 2940, Nov. 19, 2014.

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