Bipartisan group to introduce carbon fee bill

Source: Nick Sobczyk, E&E News reporter • Posted: Tuesday, November 27, 2018

A bipartisan group of House lawmakers is planning to introduce carbon fee legislation this week, a potential marker for cooperation on climate change across the aisle in the new Congress.

The bill would put a $15-per-metric-ton fee on carbon starting in 2019 and rising by $10 a year until certain emissions reduction goals are met, according to draft text obtained by E&E News. The fee would primarily target the oil, gas and coal industries, and the money would be distributed to households through a trust fund administered by the Treasury Department.

Climate Solutions Caucus co-Chairman Ted Deutch (D-Fla.) is leading on the measure, to be introduced as the “Energy Innovation and Carbon Dividend Act,” alongside fellow caucus members Reps. Brian Fitzpatrick (R-Pa.) and Francis Rooney (R-Fla.).

The bill is almost certain not to pass this session of Congress. But it would be the first bipartisan carbon fee measure in a decade, and centrist and eco-right climate advocates are hoping it sets the tone for climate work on Capitol Hill next year.

It’s also the second climate change bill introduced with Republican support in recent months after Rooney and Fitzpatrick signed on as co-sponsors of the carbon tax bill from outgoing Rep. Carlos Curbelo (R-Fla.).

“I’m about it,” said Joseph Majkut, director of climate policy at the Niskanen Center, a libertarian think tank. “Let’s let a thousand flowers bloom.”

The latest bill has been in the works for months. It closely mirrors the fee and dividend approach long advocated by Citizens’ Climate Lobby, the group behind the House climate caucus.

The group had more than 600 volunteers on Capitol Hill for a lobby day earlier this month, and part of their goal was to pitch CCL’s policy proposals to lawmakers and staff.

The targets laid out in the bill are ambitious, even if the initial $15 price is lower than similar proposals. The carbon fee would stop increasing only when emissions have been reduced by 90 percent compared to 2015 levels.

The legislation lays out a schedule to get there, with annual targets set by decade. From 2022 to 2030, the goal would be a 5 percent reduction per year, and from 2030 to 2040, the target would move to 2.5 percent per year, all compared to 2015 levels.

A spokesman for Deutch stressed that the bill is still in draft form and is still being modified. But the early version does have some provisions likely to roil the environmental groups pushing for more aggressive regulatory policies.

As it stands now, the bill would exempt fuels used for farming from the carbon fee and specify that the fee should not be levied on other agricultural greenhouse gas emissions, such as methane from livestock.

It would also tweak the Clean Air Act to halt greenhouse gas regulations, though the provision appears to make an exception for vehicle fuel efficiency standards.

Those kind of regulatory changes are the linchpin of many conservative carbon tax proposals, including Curbelo’s, which would implement a rolling moratorium on EPA’s greenhouse gas regulations.

Still, the bill will undoubtedly make waves during the lame-duck session, as Democrats debate how to address climate change in the next Congress behind closed doors.

There are several Democratic carbon pricing proposals already on the table, including from well-known climate hawks, such as Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii).

Majkut noted that the conversation has now expanded, with two GOP-backed bills introduced this year and at least two returning House Republicans — Rooney and Fitzpatrick — prepared to work on climate change moving forward.

And while the $15 starting price is low, the $10 yearly increase will escalate quickly, he added.

“Can’t fault them for their ambition,” Majkut said.