Fee on Carbon Polluters Could Generate $2 Trillion in 10 Years
The American Opportunity Carbon Fee Act, introduced in the U.S. Senate November 19, would impose a fee on emitters of carbon pollution, generating up to $2 trillion over 10 years, according to sponsor Sen. Sheldon Whitehouse (D-R.Is.).
The fees would be credited to an American Opportunity Trust Fund to be returned to the American people for a range of public benefits including infrastructure investments, climate mitigation or adaptation and assistance to low-income families and residents of high-energy-cost areas. Sen. Brian Schatz (D-Hawaii) co-sponsored the bill. (Watch Whitehouse’s Senate floor speech on the bill.)
“Right now,” Whitehouse said, “we are subsidizing big polluters to the tune of hundreds of billions of dollars annually by allowing them to pollute for free. We all pay the costs of this subsidy through higher health costs, property damage from rising seas, warming waters that affect our fishing industry and more.”
Schatz noted that the bill is “one of the most straightforward solutions to climate change and has growing support across the ideological spectrum.” He expressed confidence that congressional Republicans will “listen to their consciences and their constituents, and join us on the right side of history.”
$42 a Ton in 2015
The bill would require polluters to pay a fee for every ton of carbon pollution they emit, starting at $42 a ton in 2015 and increasing annually by an inflation-adjusted 2 percent. The fee would be assessed on all coal, oil and natural gas produced in or imported to the United States, as well as on large emitters of non-carbon greenhouse gases and CO2 from non-fossil-fuel sources.
Trade-vulnerable, energy-intensive industries would be protected, with the playing field leveled by tariffs on goods imported from countries that do not price carbon and refunds issued to American manufacturers.
A fee tracking the social cost of carbon would cut pollution from the electricity sector by about half within a decade compared to business as usual, according to a study by Resources for the Future, a nonpartisan think tank. The electricity sector is the largest source of U.S. carbon pollution, emitting about 40 percent of annual emissions.
Potential uses for the funds generated by the carbon fee also include:
- Tax cuts;
- Higher Social Security benefits;
- Tuition assistance and student debt relief;
- Dividends to individuals and families;
- Transition assistance to workers and businesses in energy-intensive and fossil-fuel industries; and
- National debt reduction.