Reps. Ted Deutch, D-Fla., and Francis Rooney, R-Fla., plan to revive a carbon tax bill Thursday, the Washington Examiner has learned.
The pair, who co-lead the bipartisan Climate Solutions Caucus, plan to reintroduce legislation, first unveiled in November, that was the first bipartisan carbon tax bill in nearly a decade. The reintroduction is necessary since it’s a new session of Congress.
The bill is intended as a test for a carbon-tax-and-dividend model that distributes all of the revenue from the tax into monthly rebates, divided into equal portions, to American households, protecting them from higher energy costs. The approach differs from that of other proposals that would spend the proceeds of the tax on other things, such as government-funded clean energy investments, or offsets of other taxes.
“I am supportive of a carbon fee as a non-regulatory, revenue-neutral and market-driven incentive to move toward natural gas and away from coal, and to support emerging alternate sources of energy,” Rooney told the Washington Examiner. “This bill provides a method of ensuring that any fees are rebated back to the public.”
The legislation would impose a tax of $15 per ton of carbon dioxide in 2019, a relatively low starting number. But the price would increase $10 each year, a rapid pace, rising to nearly $100 per ton by 2030, and potentially higher if the emissions targets set in the bill are not met.
It levels the carbon tax primarily on producers of fossil fuels at the “upstream” level of the economy, meaning coal is taxed at the mine, natural gas at the processing plant, and petroleum at the refinery. The legislation exempts agricultural fuels. The new version of the bill also exempts fuel used by the military.
The bill also restricts the ability of the government to regulate greenhouse gases under the Clean Air Act, which would be duplicative with a carbon tax.
A bipartisan coalition of former Federal Reserve chairs, and top economic advisers to recent presidents of both parties, this month endorsed a carbon tax and dividend approach, which also has the support of oil and gas companies.
But Congress is unlikely to pass carbon pricing legislation anytime soon. The vast majority of congressional Republicans oppose carbon pricing as a tax increase. Progressives, meanwhile, increasingly prefer government mandates proposed in the “Green New Deal” to carbon taxes.
