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February 28, 2013
Carbon tax on Democrats' menu

President Obama’s rejuvenated interest in tackling climate change has been matched in Congress, primarily through a new carbon tax bill co-sponsored by Senate Democratic leader Barbara Boxer (D-CA) and Senator Bernie Sanders (I-VT). 

The senators actually introduced two linked bills–the Climate Protection Act and the Sustainable Energy Act.  Together the bills would generate about $1.2 trillion by taxing 2,869 of the nation’s largest fossil fuel users and then direct portions of the revenue into energy efficiency and sustainable energy technologies.

The bills were immediately attacked by Senator David Vitter (R-LA), the ranking member of Boxer’s Environment and Public Works Committee (EPW).  According to Vitter, the carbon tax proposal is “no different” from the cap-and-trade legislation that failed to make it through Congress in 2009.  “It’s not just energy prices that would skyrocket from a carbon tax,” said Vitter in a press release.  “The cost of nearly everything built in America would go up.”

$20 per ton fee

The Boxer/Sanders’ bills would:

  • Enact a $20 per ton carbon or methane equivalent fee, rising 5.6 percent a year over a 10-year period.  The fee would be applied upstream (at the coal mine, the oil refinery, the natural gas processing point, or at the point of importation).  According to the sponsors, the fee would reduce carbon emissions by 80 percent or more by 2050 compared to 2005 levels.
  • Build in environmental and human health protections against risks from hydraulic fracturing, which would be expected to increase dramatically as the quest for natural gas grows in response to the carbon tax.  End the so-called Halliburton exemption from the Safe Drinking Water Act for fracking and ensure disclosure of chemicals used in the fracking process.
  • Use revenue to initiate and extend multiple actions to promote energy efficiency and sustainable energy, including continuing the president’s 2008 call for weatherizing 1 million homes per year; tripling the budget of the Advanced Research Projects Agency-Energy (ARPA-E); creating a sustainable technologies finance program to leverage $500 billion for investments in wind, solar, geothermal, and other sustainable energy projects as well as advanced transportation projects; and providing $1 billion a year to fund worker training.
  • Create a rebate program that would direct 60 percent of the carbon fee revenue to consumers to offset cost increases energy companies are expected to impose in response to the tax.
  • Ensure that imported fuels and products would be charged the same carbon fee unless the exporting nation already charges a similar fee for carbon.
  • End fossil fuel subsidies, extend key renewable energy tax incentive programs, and use approximately $300 billion in revenues to pay down the national debt.

Treasury e-mails

In addition to emphasizing the economic harm he believes the bills would cause, in late 2012, Vitter sent a letter to Treasury Secretary Timothy Geithner, requesting that Treasury publicly disclose “at least 7,300 emails” discussing carbon, which were sent to or from Treasury’s Office of Environment and Energy.   Treasury has refused to release the e-mails as requested in a Freedom of Information Act (FOIA) petition from the Competitive Enterprise Institute.  According to Vitter, Treasury stated that disclosure of the extensive carbon discussion would not significantly inform the public about operations or activities of government.

“A plan to tax carbon would inevitably be a tax on the public,” responded Vitter.  “So by definition every response would on its face significantly inform the public.”

Click here for the text of the Climate Protection Act.

Click here for the text of the Sustainable Energy Act.

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