Republican Senate a boon to carbon bill — Whitehouse

Source: Jean Chemnick, E&E reporter • Posted: Thursday, November 20, 2014

Sen. Sheldon Whitehouse today said the Republican takeover of the Senate may actually help pass legislation putting a price on carbon emissions.

The Rhode Island Democrat said his new bill to place a $42-per-metric-ton levy on carbon from fossil fuels production and imports may have “significant opportunities” to become law, precisely because Republicans will gain the majority next year.

“In a peculiar way, it may prove that our effort was assisted by this transfer of Senate leadership to Republican control,” he told reporters this afternoon, immediately after introducing his bill on the chamber floor.

That’s because Republicans will have the task of showing they can use their control of both chambers to govern, he argued. And with Republicans preparing for a presidential campaign and to defend incumbents in swing states including Florida, New Hampshire and Illinois in 2016, their leaders might want to moderate their stance on the issue. That’s particularly true as polls continue to show that the public accepts man-made warming, he argued.

“This is an issue where the public has already left them and where they have huge vulnerability to being in a bad position,” he said.

And Whitehouse said his measure could offer Republicans the chance to attain the long-sought goal of slashing taxes on corporate income and payroll while rolling back U.S. EPA carbon restrictions with the cooperation of Democratic lawmakers and President Obama.

“They’ve got a lot of wins that they could potentially bring back to the table going this way,” he said.

Whitehouse said EPA’s new and existing power plant proposals improve chances that Republicans will negotiate on a carbon price.

“The absolute holiday from any consequence for carbon pollution is over,” he said. Faced with a mandate to limit their emissions anyway, fossil fuel companies might decide they prefer a direct tax to “the uncertainties and complexities of regulation.”

“If the polluting industries will move on this issue, the Republican position will follow without much delay,” he predicted.

Whitehouse must strike a delicate balance when discussing the possibility of inserting language into his bill that would scrap EPA’s Clean Air Act rules for carbon dioxide and other heat-trapping emissions. The provision is not in the current version, but he said today that he would be “open” to inserting it if the carbon fee achieved similar emissions reduction results.

“I 100 percent support the EPA rules, and I would approach any interference with them with real caution,” he said. “But it is a fact that an adequate and well-enforced carbon fee will have an effect that is very corollary to what a regulatory regime would do.”

But Democrats and environmentalists have made defending EPA’s authorities their top priority in the four years since Republicans gained control of the House and seem unlikely to let them go for a new policy with unknown effect.

David Goldston, director of government affairs at the Natural Resources Defense Council, highlighted that point in his statement on the bill, which Whitehouse introduced with co-sponsor Sen. Brian Schatz (D-Hawaii).

“Their bill could be a useful complement to the Clean Air Act and other laws the president is already using to curb carbon pollution,” Goldston said. “Nothing must be allowed to interfere with the success of the [EPA’s] proposed standards to curb dangerous carbon pollution from power plants, which can produce substantial progress now under existing law.”

Meanwhile, Lori Sanders of the conservative R Street Institute said the liberal Whitehouse “is just probably the wrong messenger” to engage Republicans on a revenue-neutral carbon tax.

“It’s encouraging to see a Democrat attempting to be so flexible, but it’s unlikely that at least right now, Republicans are going to want to engage on this now when there are many easy wins coming up for them in January,” Sanders said. R Street supports a revenue-neutral carbon tax in certain circumstances.

But Whitehouse said he remains hopeful that Republican support could come from members who have backed carbon policy in the past — like Sens. John McCain of Arizona and Susan Collins of Maine — and from senators from states already affected by warming. He said he had limited his initial sponsors to Schatz because he didn’t want to release the bill with an all-Democratic lineup and squelch prospects of early Republican support.

The Whitehouse measure would increase the initial $42-per-metric-ton fee on emissions by 2 percent plus the rate of inflation each year. Revenue from fossil fuel producers and importers would go into an “American Opportunity Fund” and be distributed to shore up Social Security benefits, offset tax cuts elsewhere in the code or to pay out dividends to citizens.

The measure would allow for credits to encourage the use of carbon capture and storage technology, refunds for producers of energy-intensive products that are exported abroad, and border tariffs on goods imported into the United States from countries that lack a similar fee.

Click here to read the bill.