Watching Government: Carbon tax idea reappears

Did the Democrats regaining majority control of the US House in the recent midterm elections improve the legislative climate for a federal carbon tax? Its prospects certainly look brighter now than when the Republicans were in charge and opposed to any proposal for a new federal tax.

Rep. Theodore E. Deutch (D-Fla.) introduced H.R. 2173, the Energy Innovation and Carbon Dividend Act of 2018, on Nov. 27, with Reps. Charlie Crist (D-Fla.), John K. Delaney (D-Md.), Francis Rooney (R-Fla.), and David A. Trott (R-Mich.).

The measure, which was referred immediately to the Ways and Means Committee, would price carbon initially at $15/tonne and increase the price by $10/year, Deutch explained. The bill would help reduce carbon pollution in the US by 40% over 12 years, with a 91% reduction target by 2050, he said.

It would require the US Department of the Treasury to return 100% of the revenue to the American people, a policy Deutch said a Treasury Department report highlighted as helping lower and middle-income families.

“This aggressive carbon pricing scheme introduced by members from both parties marks an important opportunity to begin to seriously address the immediate threat of climate change,” he said. “The status quo is unsustainable; the time to act is right now.”

Deutch said H.R. 2173 has the support of several environmental and similar organizations. He apparently did not check in with the American Petroleum Institute, US Chamber of Commerce, or National Association of Manufacturers. All have said their members have made marked progress already in reducing US carbon emissions from their own operations as well as from the growing use of more natural gas than coal to generate electricity domestically.

Could stop at Senate

Any carbon tax the House approves still would need to clear the Senate, which Republicans will continue to control. Majority Leader Mitch McConnell (R-Ky.) has vowed to block any new taxes, so the matter could end there.

But there also are indications that Republicans and others who would oppose Deutch’s proposal might be ready to consider a different approach. Alliance for Market Solutions Executive Dir. Alex Flint, in a Dec. 3 column in The Hill newspaper, argued that a revenue-neutral carbon tax would be a more reasonable way for GOP lawmakers to address growing concerns about climate change consequences.

“Politically, this policy is desirable for conservatives for a number of reasons,” he said. “For one, it’s revenue-neutral, meaning that with the money government receives taxing carbon pollution, it could cut other, more harmful taxes an equal amount. Second, it would negate the need for and enable the repeal of a host of carbon regulations that currently inhibit economic growth.”