Tuesday, June 25, 2013

The Senate Will Soon Have a Total of Three Carbon Tax Proposals. Why Not Band Behind One?

On Thursday, The Hill reported that Sen. Diane Feinstein (D-CA) plans to introduce a new carbon tax proposal that would entail a $10-per-ton fee on carbon emissions "just for the utility industry."  The timing of such legislation geared at regulating power plants seems to have had the President's upcoming speech on a national climate plan in mind.  However, when reading the article, I could not help wondering why DiFi is introducing another carbon tax bill when there are already two standing proposals:  that designed by Barbara Boxer (D-CA) and Bernie Sanders (I-VT) and that designed by Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI).  Granted, her bill sets the fee much lower, but that won't foster any more political will.

If the White House has already asserted its lack of interest or, more accurately, initiative in carbon tax legislation, why not band together to put the momentum behind a single proposal?" Jay Carney always says that the White House will not "propose" such legislation.  That indicates a lack of initiative, but not necessarily a lack of interest or future support.

If the White House has already expressed its lack of initiative on the issue and it will be hard enough to push in the Senate, let alone the House, why not band together to put the momentum behind a single proposal?

I want to review the Boxer-Sanders legislation and the Whitehouse-Schatz draft legislation and then offer some closing thoughts.


Back in 2007, Barbara Boxer and Bernie Sanders drafted the Global Warming Pollution Reduction Act, which would have established a cap-and-trade system. The bill had 17 additional co-sponsors, including Barack Obama, Joe Biden, and Hillary Clinton, and it had the support of a wide array of environmental groups: Earth Day Network, Earthjustice, Environmental & Energy Study Institute, Friends of the Earth, Greenpeace, League of Conservation Voters, National Audubon Society, National Environmental Trust, Natural Resources Defense Council, Physicians for Social Responsibility, Public Citizen, Sierra Club, Union of Concerned Scientists, and U.S. PIRG.

Although that legislation failed (Remember who was president in 2007?), Boxer and Sanders, two of our biggest climate heroes in the Senate, are at it again with a fee-and-dividend proposal.
Barbara Boxer and Bernie Sanders released their comprehensive proposal, consisting of the Climate Protection Act and the Sustainable Energy Act, during a press conference on February 14th. With them at the press conference, showing support for the legislation, were representatives from various environmental, consumer, and liberal groups:  Bill McKibben, founder of 350.org; Mike Brune, executive director of Sierra Club; Tara McGuiness, executive director of the Center for American Progress Action Fund; Tyson Slocum, Public Citizen’s energy director; and Meg Power of the National Community Action Foundation. Unlike the Whitehouse-Schatz effort or the new DiFi effort (as far as I can tell), this legislation actually has backing from activists and think tanks.  The CAP support, in my opinion, is particularly important because of CAP's close ties to the administration.  (CAP does, however, tend to outflank Obama to the left on environmental and climate issues.)

Pricing Carbon: First, their proposal would enact a carbon fee of $20 per ton of carbon or methane equivalent, set to rise 5.6% each year over a ten year period.  The fee would be applied upstream---at the coal mine, the oil refinery, the natural gas processing point, or the point of importation; it would, consequently, apply to 2,869 of the largest fossil fuel polluters and would cover 85% of U.S. greenhouse gas emissions.  The tax would, according to the Congressional Research Office, generate $1.2 trillion in revenue over the next decade.  Additionally, the Climate Protection Act would set a long-term emissions reduction goal of 80% or more by 2050 (as science demands) and would reduce emissions by approximately 20% from 2005 levels by 2025.

Protecting Communities from Fracking: In order to ensure that a carbon fee does not harm communities through increased extraction of natural gas, the Boxer-Sanders legislation would end the "Halliburton exemption" from the Safe Drinking Water Act for fracking and would include all the provisions from the FRAC Act to guarantee disclosure of chemicals used in the fracking process.

Investment in Energy Efficiency and Sustainable Energy: The Boxer-Sanders legislation would use some of the revenue gained from the carbon tax to invest in energy efficiency and sustainable energy technologies in order to create jobs and further reduce emissions. The bill would provide funds to weatherize 1 million homes and would triple the budget of ARPA-E for energy research and development.  It would create a Sustainable Technologies Financing Program that would leverage $500 billion, through public-private partnerships, in for investments in wind, solar, geothermal, advanced biomass and biofuels, ocean and tidal energy, hydropower, advanced transportation projects, and energy efficiency technologies. It would invest in domestic manufacturing and energy-intensive industries to promote energy efficiency and would fund $1 billion a year in worker training to help transition to a clean energy economy.

Family Clean Energy Rebate Program: The Boxer-Sanders bill would use 3/5th of the revenue from the carbon fee for this program, based on the design of Alaska's oil dividend, to provide a monthly rebate to every U.S. resident in order to offset potential increases in utility bills.

Fair Trade and International Cooperation
: The Boxer-Sanders legislation would levy the same carbon fee on all imported fuels and products unless the exporting nation has a similar program or carbon fee in place. The revenue gained here would help communities make infrastructure more resilient and fund adaptation projects that protect natural resources and wildlife, and it would help the U.S. to meet international commitments to assist in global climate adaptation. The bill intends for the fee to spur other nations to take similar actions and to work towards an international treaty.

Debt Reduction: Part of the revenue raised from the carbon fee, along with that raised by ending fossil fuel subsidies, would contribute approximately $300 billion to debt reduction over the next decade.

During the press conference, Boxer described the legislation as the "gold standard" climate legislation right now, and I think I'd agree.  It is bold and comprehensive and has strong support among progressive and environmental groups, many of whom I greatly trust.

Barbara Boxer has expressed her intention to bring her bill up in committee (Environment and Public Works) this July, with hopes of getting it to a vote on the floor.  We all know that a carbon tax would be DOA in the House and (if it could even muster 50 votes) couldn't break a filibuster in the Senate.  However, unfortunately, I'm not even sure if it could make it out of the EPW Committee.  The committee has 9 Democrats and 8 Republicans.  There used to be 10 Democrats; however, Frank Lautenberg (D-NJ) has sadly passed away.

Those 9 Democrats are the following (in order of rank in committee): Barbara Boxer (D-CA), Chair; Max Baucus (D-MT), Tom Carper (D-DE), Ben Cardin (D-MD), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Tom Udall (D-NM), Jeff Merkley (D-OR), and Kirsten Gillibrand (D-NY).  Of those, we have 7 liberals with solid environmental voting records (90%+ lifetime LCV scores), a centrist Democrat with a mixed-but-still-good environmental record (Carper, LCV score: 80%), and a conservative Democrat (Max Baucus, LCV score: 68%).  All of the Democrats on the EPW Committee except Baucus voted for Sheldon Whitehouse's (symbolic) carbon tax amendment during the budget "vote-a-rama" back in March.  We can safely assume that none of the 8 Republicans would vote for any climate legislation.  That leaves us with a likely vote of 8 to 9, unless Baucus changes his mind and stays with the Democrats.


On March 12th, one month after Boxer and Sanders released their proposal, Sheldon Whitehouse and Brian Schatz--along with Representatives Henry Waxman (CA-33) and Earl Blumenauer (OR-03)--released draft carbon-pricing legislation.  In doing so, they sought input from various stakeholder groups in order to shape a final proposal. Their draft was much narrower in focus than the Boxer-Sanders legislation as it lacked companion clean energy/EE legislation, emissions reduction goals, a pre-determined price, or a pre-determined use of revenue.

Key differences between Boxer-Sanders and Whitehouse-Schatz

Whereas the Boxer-Sanders legislation targets upstream carbon emitters (coal mines, oil refineries, etc.) with its carbon fee, the Whitehouse-Schatz proposal targets power plants.

The Boxer-Sanders legislation establishes a goal of reducing emissions by at least 80 percent below 2005 levels by 2050.The Whitehouse-Schatz proposal does not specify targets or timetables except for for a 90 percent reduction of emissions from HFCs attributed to specified entities.

The Boxer-Sanders legislation sets a carbon fee of $20 per ton, to rise by 5.6% per year. The Whitehouse-Schatz draft proposal contains three alternative carbon prices---$15, $25, and $35 per ton--and a range of potential escalation rates between 2% and 8%.

The Boxer-Sanders proposal has a detailed discussion of the use of revenue to stimulate the transition to a clean energy economy and to provide rebates to homeowners to offset potential increases in utility bills. The Whitehouse-Schatz draft proposal does not designate a use for the revenue raised by the carbon fee, but rather presents four options for discussion: (1) mitigating energy costs for consumers, especially low-income consumers; (2) reduce the federal deficit; (3) protect the jobs of workers at trade-vulnerable, energy intensive industries; (4) reduce the tax liability for individuals and businesses; and (5) invest in other activities to reduce carbon pollution and its impacts.

The EPA would be the regulatory authority tasked with enforcing the Boxer-Sanders legislation. The Whitehouse-Schatz system would be jointly administered by the EPA and the IRS.  The EPA would implement and enforce emissions reporting under EPA's Greenhouse Gas Reporting Rule, and the IRS would assess, collect, and enforce the fee requirements.

For a more detailed side-by-side analysis, see the chart designed by the Center for Climate and Energy Solutions.

Although there are substantive differences in the proposals, I don't see why Whitehouse, who also serves on the EPW Committee, wouldn't just co-sponsor the Boxer-Sanders legislation and try to tweak it in committee, where it will likely see changes. As Boxer holds the gavel, she can guarantee that her bill gets a hearing. Joining forces on a single bill puts much more momentum behind the issue. And if there's any issue that could use momentum because of the disconnect between urgency and political will, it's this one.

As I noted earlier, during the Senate's budget "vote-a-rama" back in March, Whitehouse put forth a carbon tax amendment:
"To establish a deficit-neutral reserve fund relating to ensuring that all revenue from a fee on carbon pollution is returned to the American people."
The phrase "deficit-neutral reserve fund" was standard language for the amendments of the vote-a-rama because they were largely symbolic and had to indicate that they would not affect the total budget itself. The vote-a-rama just offers the members of the Senate to put themselves and their peers on record on various issues. 
The amendment was rejected 41 to 58. 13 members of the Democratic caucus voted against it: Max Baucus (D-MT), Joe Donnelly (D-IN), Kay Hagan (D-NC), Heidi Heitkamp (D-ND), Tim Johnson (D-SD), Tim Kaine (D-VA), Mary Landrieu (D-LA), Joe Manchin (D-WV), Claire McCaskill (D-MO), Mark Pryor (D-AR), Jay Rockefeller (D-WV), Jon Tester (D-MT), and Mark Warner (D-VA).

Of those 13, five also voted against Roy Blunt (R-MO)'s amendment requiring a point of order (i.e. required 60 vote threshold) for a tax on carbon: Kay Hagan (D-NC), Tim Johnson, Tim Kaine (D-VA), Jon Tester (D-MT), and Mark Warner (D-VA).  I'd say that puts them in a "swing" category.
In other words, as it stands, it is unlikely that more than 46 senators would vote for a climate bill. If you want to create momentum behind a bill, for the sake of generating press attention or support for executive action, then you would want to consolidate the support of as many of those 46 as possible rather than breaking off into competing groups.

No comments:

Post a Comment