Want a Carbon Tax? Wait Until Next Year, Advocates Say

Want a Carbon Tax? Wait Until Next Year, Advocates Say

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A top advocate for carbon taxes argued in a report yesterday that a $40 levy on greenhouse gases would lead to a dramatic reduction in U.S. emissions—so much so that it would exceed the 2025 targets set by the landmark Paris Agreement.

But there’s a catch.

In order for the plan to work, Congress would have to pass a carbon tax as soon as next year and put it in place by 2021. Both are extremely tall orders—even for a group like the Climate Leadership Council, which is promoting the carbon tax plan and is supported by corporate heavy hitters such as BP PLC, Exxon Mobil Corp. and General Motors Co.

It’s a challenge both advocates and activists said underscores the difficulty in quickly addressing climate change—and one that first could require a realignment of Congress, including a Democratic takeover of the House.

“We just need to have more adults in the room,” said Marty Hayden, vice president of policy and legislation at environmental group Earthjustice.

The proposal put forward by the Climate Leadership Council would slap an initial $40-per-ton tax on carbon emissions that would increase steadily over time. In doing so, U.S. industry would have an economic incentive to reduce its carbon footprint.

At the same time—to make a carbon tax more palatable to the public and the corporate world—checks or “carbon dividends” would be sent to U.S. families, and industry would be freed from a slate of existing carbon regulations.

The report, published yesterday by the Climate Leadership Council, estimated that by 2025, this approach would cut U.S. emissions 32 percent below 2005 levels—a pace beyond the U.S. goal of 26 to 28 percent.

“The plan would accomplish this through a series of grand bargains, including trading a robust and rising carbon price for regulatory relief, thereby appealing to environmentalists, businesses and conservatives at the same time,” wrote a group of supporters that includes former Federal Reserve Chairwoman Janet Yellen and former Treasury Secretary Lawrence Summers.

One of the biggest hurdles to a grand bargain, however, is the legislative branch.

Just a few months ago, the House passed a resolution sponsored by House Majority Whip Steve Scalise (R-La.) that labeled carbon taxes as “detrimental” to the U.S. economy; just six Republicans joined with the Democratic minority to oppose it.

Meanwhile, a separate carbon tax plan proposed by Rep. Carlos Curbelo (R-Fla.) has barely budged—and is unlikely to go anywhere in the current session of Congress.

It’s for this reason that Hayden, of Earthjustice, suggested that a Democratic House majority is likely a prerequisite for near-term attempts to address climate change.

“A Democratic House might give more chance for action on climate, period,” he said.

A spokesman for the Climate Leadership Council said the coalition plans next year to release a detailed carbon tax proposal that lawmakers could turn into a federal bill.

“We would certainly hope it would inform future legislation,” said Greg Bertelsen, a spokesman for the group.

He said buy-in from both parties is critical to getting a carbon tax through Congress.

“Members who are interested in finding a serious solution understand this will have to be bipartisan,” he said. “As with every major piece of legislation, there will have to be some give and take.”

One potential sticking point is what Congress would do with the revenue from a carbon tax—a question that has led to a variety of ideas.

The Climate Leadership Council wants to send the money back to taxpayers, but Democrats and other carbon tax supporters have advocated a variety of other uses, from tax cuts to infrastructure spending to job programs.

Alex Flint, executive director of the conservative Alliance for Market Solutions, said his group likes the idea of using it for tax cuts—and that this kind of carrot could be a way to sell the idea to Republicans.

“Carbon tax is emerging as the conservative alternative to cap and trade,” he said.

Flint added that Curbelo’s introduction of carbon tax legislation this summer signaled a potential turning point among GOP voters and lawmakers.

“We think that’s indicative of a change that’s happening in the Republican caucus,” he said.

Still, support is far from widespread. As of yesterday, only two Republicans had signed onto Curbelo’s bill as co-sponsors.

Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.

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Jim Staab

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