Seven Democrats Introduces Alternative Carbon Tax Bill

Mar 5: Representative John Larson (D-CT) has introduced the America's Energy Security Trust Fund Act of 2009 (H.R. 1337), which would amend the Internal Revenue Code of 1986 to reduce carbon dioxide emissions in the United States domestic energy supply by creating a carbon tax. There are six cosponsors of the bill including: Representatives Earl Blumenauer (D-OR); Rush Holt, (D-NJ); Jim McDermott (D-WA); George Miller (D-CA); James Moran (D-VA); and David Wu (D-OR). The bill, which counters the preferred "cap-and-trade" approach favored by most Democrats and President Obama to reduce greenhouse gas emissions, was referred to the Committee on Ways and Means, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker.

According to the Carbon Tax Center (CTC), Representative Larson's new bill builds on and improves his 2007 bill with the following provisions: The first-year tax rate is $15 per ton of carbon dioxide; The rate rises by $10/ton per year; After five years, that increase rate is automatically bumped up to $15/ton if U.S. emissions stray from an EPA-certified glide path to cut emissions by 80% from 2005 levels in 2050; To protect domestic manufacturers, the bill authorizes the Treasury Department to impose a "carbon equivalency fee" on carbon-intensive products imported from non-carbon-taxing nations; Clean-tech R&D and investments are eligible for $10 billion a year in tax credits; Impacted workers and industries are eligible for transition assistance of $7.5 billion in the first year; this is phased out after year 10 but still totals $41 billion; and All other revenue is tax-shifted to Americans via reductions in payroll taxes.

Last year, Larson spoke on behalf of his carbon tax legislation and said, "Let's look at what would be revenue neutral. Let's look at taxing polluters upstream but passing the benefits downstream to the consumers, reducing payroll taxes and using our creativity and this committee's authority to create a system that will provide the opportunity and innovation and tax relief they need as well."

One of the major supporters of the carbon tax approach, as opposed to cap-and-trade is New York Mayor Michael Bloomberg who called carbon tax policy, like the one in Congressman Larson's bill, "the best way forward." He said, "Larson has proposed legislation that will reduce payroll taxes for citizens in exchange for a tax levied on the carbon emissions spewed by approximately 2,000 polluters. It passes the benefits of the tax onto consumers."

Bloomberg, at the 2007 Mayors Climate Protection Summit in Seattle [See WIMS 11/06/07], and at the February, 2008 United Nations General Assembly thematic debate on Climate Change said, "Cap-and-trade is an easier political sell because the costs are hidden -- but they're still there. . . A cap-and-trade system will only work if all the credits are distributed from the start -- and all industries are covered. But this begs the question: If all industries are going to be affected, and the worst polluters are going to pay more, why not simplify matters for companies by charging a direct pollution fee? It's like making one right turn instead of three left turns. You end up going in the same direction, but without going around in a circle first."

Among others, in addition to Bloomberg, supporting a carbon tax, that WIMS has reported on in the past include: Peter Orszag, former director of the Congressional Budget Office (CBO) and now Director of the Office of Management and Budget in the Obama Administration; James Hansen, PhD, Director of NASA's Goddard Institute of Space Studies; and Friends of the Earth (FOE) President Brent Blackwelder. Even one of the most cynical climate change opponents, Senator James Inhofe (R-OK), Ranking Member of the Environment & Public Works Committee, has said that carbon taxes are the “most efficient” way to regulate CO2 emissions and “could offer significant advantages” over the cap-and-trade approach [See WIMS 2/22/08].

According to a release from the Carbon Tax Center, the tax would take effect in 2009 and tax emissions at a rate of $15 per ton of carbon dioxide and increase by $10 each year (or by $15 each year if needed to keep emissions falling fast enough). It would be virtually revenue-neutral, with over 95% of carbon tax revenues used to cut payroll taxes to help Americans with higher energy prices.

Charles Komanoff, co-director of CTC said, "Congressman Larson has shown great leadership in introducing this bill and ramping up the debate on carbon pricing in this Congress. It's a debate we urgently need to have. President Obama took a big step forward in proposing carbon pricing in his budget. The strong consensus among economists is that a carbon tax is the quickest, most effective and most transparent approach. Now that we have a well-crafted carbon tax bill to work with (and more such bills in the pipeline), Congress will be able to compare the details of actual carbon tax and cap-and-trade bills, and debate them on the merits. As that debate unfolds, you'll see a groundswell of support and eventual consensus line up behind a carbon tax proposal like Rep. Larson's."

CTC indicated that unlike cap-and-trade proposals, the Larson bill calls for taxing carbon at the source, such as oil refineries and coal mines for domestic fuel, or shipping terminals for imported fuel. A total of $100 billion over the first 10 years, equivalent to three percent of the revenue, would be dedicated to tax breaks for clean energy, while another $41 billion, equivalent to one percent of the revenue (more in the initial years, less in later years) would be used for transitional assistance for workers in industries directly impacted by the carbon tax. All of the remaining carbon tax revenue - over 95% - would be spent on cutting payroll taxes, offsetting increased energy prices for working families, and helping stimulate job growth. This would amount to a tax shift rather than a tax increase. In fact, most working families will actually come out ahead if they conserve energy modestly.

Access a release from the CTC (click here). Access legislative details for H.R. 1337 (click here). Access a 2008 release from Rep. Larson (click here). Access the CTC website for extensive background and related information (click here). Access various WIMS-eNewsUSA blog posts on the carbon issue (click here). [*Climate, *Energy]

A National Carbon Tax: Another Option For Carbon Pricing

Dec 22: In early December, the Environmental and Energy Study Institute (EESI) held a briefing on the issue of a "carbon tax" as opposed to a "cap and trade" system to control carbon emissions. The controversial topic has been debated for years but is still unsettled in the political discussions of methods to address climate change. The immediacy and simplicity of the carbon tax system is still attracting attention. Speakers at the EESI briefing included: Representative John Larson (D-CT) and sponsor of America's Energy Security Trust Fund Act (H.R.3416 of 2007); James Hansen, PhD, Director of NASA's Goddard Institute of Space Studies; Gilbert Metcalf, PhD, Professor of Economics, Tufts University; Robert Shapiro, PhD, Co-Founder and Chairman, Sonecon; former U.S. Under Secretary of Commerce for Economic Affairs; James Hoggan, British Columbia Public Affairs Advisor; Chair, David Suzuki Foundation; and Brent Blackwelder, PhD, President, Friends of the Earth (Moderator).

In his presentation NASA's James Hansen summarized the carbon tax benefits saying, "A rising price on carbon emissions is the essential underlying support needed to make all other climate policies work. . . A rising carbon price is the most effective way to encourage compliance with codes designed to increase energy efficiency. A rising carbon price is needed to decarbonize the economy and move the nation toward the era beyond fossil fuels. . . The public will support the tax if it is returned to them, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts. No bureaucracy is needed. . . The tax will spur development of renewable energies and other no-carbon or low-carbon energies. . . A carbon tax is honest, clear and effective. . . The carbon tax has social benefits. It is progressive. It is useful to those most in need in hard times, providing them an opportunity for larger dividend than tax. It will encourage illegal immigrants to become legal, thus to obtain the dividend, and it will discourage illegal immigration because everybody pays the tax, but only legal citizens collect the dividend. . ."

Last February, the Congressional Budget Office (CBO) released a report entitled, Policy Options for Reducing CO2 Emissions [See WIMS 2/13/08], which said that carbon taxes are the “most efficient” means of reducing global warming pollution. CBO Director Peter Orszag, who oversaw the preparation of the report has now been nominated by President-elect Obama to be the Director of the Office of Management and Budget. Obama is on record as an advocate for a federal cap and trade system with "strong annual targets that set us on a course to reduce emission to their 1990 levels by 2020 and reduce them an additional 80% by 2050." [See WIMS 11/18/08]. Perhaps, Orszag presence in the Obama Administration and the strong position of NASA's James Hansen, will raise the issue for Presidential reconsideration. Hansen has already prepared an 8-page draft letter to President-elect Obama that discusses the urgency of addressing the climate change issue and the reasons a carbon tax is the best approach (See contact information below).

Following the CBO report release, Friends of the Earth (FOE) commented saying, "This underscores the fact that a carbon tax is a serious policy option that should be considered alongside other ways of fighting global warming. A majority of Californians already support a corporate carbon tax, and with leadership from top elected officials, the majority of Americans might ultimately feel the same way -- especially if revenue from such a tax were returned directly to middle class voters through tax rebates or other mechanisms."

Even one of the most cynical climate change opponents, Senator James Inhofe (R-OK), Ranking Member of the Environment & Public Works Committee, commented on the report saying it shows that carbon taxes are the “most efficient” way to regulate CO2 emissions and “could offer significant advantages” over the cap-and-trade approach [See WIMS 2/22/08]. . And, New York City Mayor Michael Bloomberg, at the 2007 Mayors Climate Protection Summit in Seattle [See WIMS 11/06/07], and at the February, 2008 United Nations General Assembly thematic debate on Climate Change said, "Cap-and-trade is an easier political sell because the costs are hidden -- but they're still there. . . A cap-and-trade system will only work if all the credits are distributed from the start -- and all industries are covered. But this begs the question: If all industries are going to be affected, and the worst polluters are going to pay more, why not simplify matters for companies by charging a direct pollution fee? It's like making one right turn instead of three left turns. You end up going in the same direction, but without going around in a circle first."

Access the EESI briefing website for links to available presentations and a video (click here). Access the Hansen draft letter to Obama (click here). Access Hansen's Columbia University website (click here). Access an article on the carbon tax issue and many links from the Worldwatch Institute (click here). Access links to previous EESI briefings on the carbon tax issue (click here). Access various WIMS-eNewsUSA blog posts on the carbon tax issue (click here). [*Climate, *Energy]

Diverse Interests Calling For Carbon Tax Consideration

Feb 14: Following the release of the Congressional Budget Office (CBO) report entitled, Policy Options for Reducing CO2 Emissions [See WIMS 2/13/08], there has been some interesting reactions from diverse interests. Among other things, the CBO report said that carbon taxes are the “most efficient” means of reducing global warming pollution.

Friends of the Earth (FOE) President Brent Blackwelder responded to report with a statement saying, “Yet again, another group of experts has concluded that a corporate carbon tax is the most efficient way to reduce global warming pollution. This underscores the fact that a carbon tax is a serious policy option that should be considered alongside other ways of fighting global warming. A majority of Californians already support a corporate carbon tax, and with leadership from top elected officials, the majority of Americans might ultimately feel the same way -- especially if revenue from such a tax were returned directly to middle class voters through tax rebates or other mechanisms.

“Today’s report also has implications for the current debate about cap-and-trade legislation in the U.S. Senate. Any cap-and-trade system should include 100 percent auctions of carbon allowances -- making polluters pay for all pollution, as a carbon tax would do. As the CBO director has previously testified, ‘Giving the allowances away … would largely prevent the government from using the allowance value in ways that would lower the cap’s total cost to the economy.’ A cap-and-trade system with 100 percent auctions would be better for the economy and could yield financial benefits for low and middle income Americans.”

Senator James Inhofe (R-OK), Ranking Member of the Environment & Public Works Committee, commented report saying it shows that carbon taxes are the “most efficient” way to regulate CO2 emissions and “could offer significant advantages” over the cap-and-trade approach. Inhofe said, “This groundbreaking CBO report validates what I have been saying all along: Cap-and-trade approaches are the wrong way to go. The report is unequivocal in finding that cap-and-trade approaches are inefficient compared to a straightforward tax. The report reveals that no matter how a cap-and-trade approach is modified, on a ton-for-ton basis of emission reductions, it is worse for the American economy."

Inhofe continued, "If we are going to impose enormous costs to our economy, a carbon tax would be a much more efficient and transparent approach. While I do not support either a tax or a cap-and-trade approach, I do strongly believe that we should be having an honest debate. . . Not only is the entire cap-and-trade approach fatally flawed, a cost-benefit analysis of the upcoming Lieberman-Warner cap-and-trade bill reveals it is simply all economic pain for no climate gain. Numerous analyses have placed the costs at trillions of dollars. Even if you accept the dire claims of man-made global warming, this bill would not have a measurable impact on the climate.”

Another strong carbon tax advocate is New York City Mayor Michael Bloomberg. At the 2007 Mayors Climate Protection Summit in Seattle [See WIMS 11/06/07], and most recently at the February 11-12, United Nations General Assembly thematic debate on Climate Change at the UN Headquarters in NYC, Bloomberg has said, "Cap-and-trade is an easier political sell because the costs are hidden -- but they're still there. And the payoff is more uncertain. . . the price volatility for carbon credits can discourage investment since an investment that might make sense if carbon credits are trading at $50 a ton, may not make sense at $30 a ton. . . A cap-and-trade system will only work if all the credits are distributed from the start -- and all industries are covered. But this begs the question: If all industries are going to be affected, and the worst polluters are going to pay more, why not simplify matters for companies by charging a direct pollution fee? It's like making one right turn instead of three left turns. You end up going in the same direction, but without going around in a circle first."

Senator Inhofe excerpts several quotes from the CBO report on the subject of a carbon tax as follows:

A carbon tax "would provide firms with an incentive to undertake more emission reductions when the cost of doing so was relatively low and allow them to reduce emissions less when the cost of doing so was particularly high."

. . .“a tax would keep the costs of emission reductions in balance with the anticipated benefits, whereas a cap would not.”

“A tax on emissions would be the most efficient incentive-based option for reducing emissions and could be relatively easy to implement.”

“A cap that is too tight will disproportionately increase costs over benefits and a cap that is not tight enough will disproportionately lower costs relative to benefits. A tax, by contrast, will tend to hold the costs of emission reductions in line with the constant (although uncertain) expected benefits, encouraging greater emission reductions when costs are low and allowing more emissions when costs are high.”

“When analysts take into account the degree to which costs are likely to vary around a single best estimate, they conclude that a tax could offer much higher net benefits than a cap. One study suggests that the net benefits of a worldwide tax on CO2 emissions in 2010 would be more than eight times larger than those of an equivalent inflexible cap.”

“Viewed another way, any long term emission-reduction target could be met by a tax at a fraction of the cost of an inflexible cap-and-trade program.”

“A tax would provide a steady, predictable price from emissions. An inflexible cap, however, could result in volatile allowance prices, making a cap-and-trade program more disruptive to the economy than a tax would be.”

“Price volatility could be particularly problematic with CO2 allowances because fossil fuels play such an important role in the U.S. economy. They accounted for 85 percent of the energy consumed in the United States in 2006. CO2 allowance prices could affect energy prices, inflation rates, and the value of imports and exports. Volatile allowance prices could have disruptive effects on markets for energy and energy-intensive goods and services and make investment planning difficult. The smoother price path offered by a CO2 tax would better enable firms to plan for investments in capital equipment that would reduce CO2 emissions (for example, by increasing efficiency or using low-carbon fuels) and could provide a more certain price signal for firms considering investing in the development of new emission-reduction technologies.”

Access a release from FOE and link to California poll on carbon tax (click here). Access Senator Inhofe's statement (click here)Access Mayor Bloomberg's speech at the UN thematic debate (click here). Access the complete 42-page CBO report (click here). Access the Carbon Tax Center analysis Tax vs. Cap-and-Trade (click here). Access various Internet postings regarding carbon tax v. cap-and-trade (click here). [*Climate]

Waxman Promises House Climate Change Bill By Memorial Day

Jan 15: The House Energy & Commerce Committee, Chaired by Chaired by Representative Henry Waxman (D-CA) held a held a major hearing focusing specifically on The U.S. Climate Action Partnership. The hearing presented the perspectives of members of the U.S. Climate Action Partnership (USCAP) [See WIMS 11/19/08], a coalition of over 30 businesses and nongovernmental organizations that has called for Congress to pass legislation to address the climate change threat.

The diverse set of witnesses testifying at the hearing included: James Mulva, Chairman and Chief Executive Officer, ConocoPhillips; Jim Rogers, Chairman, President and Chief Executive Officer, Duke Energy; Fred Krupp, President, Environmental Defense Fund; John Rowe, President & Chief Executive Officer, Exelon Corporation; Jeffrey Immelt, Chairman and Chief Executive Officer, General Electric; Frances Beinecke, President, Natural Resources Defense Council; David Crane, President and Chief Executive Officer, NRG Energy; Eileen Claussen, President, Pew Center on Global Climate Change; Peter Darbee, Chairman, Chief Executive Officer and President, PG&E Corporation; Jeffry Sterba, Chairman, Chief Executive Officer and President, PNM Resources; Preston Chiaro, Chief Executive - Energy and Minerals, Rio Tinto; George Nolen, President and Chief Executive Officer, Siemens Corporation; Mark Tercek, President and Chief Executive Officer, The Nature Conservancy; and Jonathan Lash, President, World Resources Institute.

Chairman Waxman opened the meeting with a statement, saying in part, "Our environment and our economy depend on congressional action to confront the threat of climate change and secure our energy independence. U.S. industries want to invest in a clean energy future. But uncertainty about whether, when, and how greenhouse gas emissions will be reduced is deterring these vital investments. Companies are caught in a dilemma: they are reluctant to invest in old polluting technologies because they know that tougher regulations are inevitable, but they can't invest in new, cleaner technologies until they know what Congress is going to require.

"Our job is to end this regulatory limbo and set our nation on a responsible path for reducing climate change and achieving energy independence. Our Committee will be acting quickly and decisively to reduce global warming and end our dependence on foreign oil. My goal is to pass comprehensive climate and energy legislation in the Committee before the Memorial Day recess. . . That is an ambitious schedule, but it is an achievable one. We cannot afford another year of delay. As today's hearing will show, a consensus is developing that our nation needs climate legislation. . . Climate change, energy independence, and health care are going to be the Committee's highest priorities."

House Speaker Nancy Pelosi (D-CA) commented on the Waxman hearing saying, "Chairman Waxman has set an aggressive timetable for action to reduce global warming and our dependence on foreign oil. I share his sense of urgency and his belief that we cannot afford another year of delay. The House is fortunate to have the leadership of Chairman Waxman and Energy and Environment Subcommittee Chairman Ed Markey on climate and energy issues; their knowledge of these issues and commitment to finding the right solutions is unmatched. They will build on the work of Chairman Emeritus John Dingell and former Subcommittee Chair Rick Boucher on energy independence. I look forward to working with my colleagues in the House, our colleagues in the Senate, and President Obama to halt the grave threat of climate change."

At the hearing, USCAP) unveiled a comprehensive and detailed set of integrated policy recommendations for developing legislation that would create an environmentally effective and economically sustainable national climate protection program. They said the "landmark document" -- titled A Blueprint for Legislative Action – echoes the sense of urgency that President-elect Obama has articulated regarding the need for a cap on greenhouse gas emissions. Developed through two years of intensive analysis and consensus-building among 26 corporations and five environmental organizations, the Blueprint offers policymakers "a clear path forward endorsed by a coalition representing a broad swath of the economy and diverse environmental interests."

Jeff Immelt, Chairman and CEO of GE said, "In the past, the U.S. has proven that we have the will, the capabilities and the courage to invest in innovation -- even in difficult times. Today, cap-and-trade legislation is a crucial component in fueling the bold clean energy investments necessary to catapult the US again to preeminence in global energy and environmental policy, strengthen the country's international competitiveness, and create millions of rewarding new American jobs."

USCAP said it believes that strong climate legislation is a critical element of any effort to stimulate investment and innovation in low-carbon technologies. The Blueprint provides specific guidelines for the Administration and Congress to enact legislation that both protects the environment and facilitates the necessary transition to a vibrant, low-carbon economy. That includes reducing greenhouse gas emissions by 80 percent of 2005 levels by 2050 through an economy-wide cap-and-trade program. They said, "every year of delay in controlling emissions increases the risk of unavoidable consequences that could necessitate even steeper greenhouse gas reductions in the future, at substantially greater economic cost and social disruption."

USCAP indicated that their Blueprint details steps for creating a mandatory, economy-wide cap-and-trade program, coupled with cost containment measures and complementary policies addressing a federal technology research development and deployment program, coal technology, transportation, and building and energy efficiency. They said the Blueprint expands
significantly on their 2007 groundbreaking Call for Action, and includes an aggressive emission reduction schedule, further details on the scope of coverage for the cap-and-trade program, and recommendations for how to include as much of the U.S. economy
under the cap as administratively and politically feasible.

While President-elect Obama and many key Congressional leaders, as well as business and environmental interests are supporting the cap-and-trade approach to dealing with the climate change issue, another organization -- U.S. Climate Task Force (CTF) -- and some influential leaders are advocating a "carbon tax" approach. Dr. Robert Shapiro, a CTF co-founder and former economic advisor to President Bill Clinton, along with Dr. Elaine C. Kamarck, co-founder and former domestic policy advisor to Al Gore, issued their own statement, and held a press conference calling the USCAP Blueprint well intended, but "misguided."

CTF said, “The U.S. Climate Action Partnership’s endorsement of an aggressive cap-and-trade scheme represents a significant misstep on America’s path to mitigate carbon emissions. We share their commitment to address the risks of climate change. However, the policy they have chosen is one that has failed to lower emissions in Europe and one strongly opposed by China and other developing nations that have become major CO2 producers. Fortunately, other options exist [See WIMS 12/22/08].

“A large and growing number of economists and others concerned about climate change support a carbon tax. Compared to other similar policies, a carbon tax has the advantage of being simple, transparent and easy to administer. Moreover, the revenues can be recycled in tax relief for American families. However, as today’s Energy and Commerce hearing shows, a number of influential legislators are still narrowly focused on implementing a cap-and-trade system -- a policy that would make energy prices even more volatile than today and discourage the investments we need to address climate change.

“We have a moral imperative to get climate policy right. And to do that, Congress must carefully weigh the risks and benefits of all potentially viable carbon policies. By soliciting the input of leaders in America’s academic, environmental, and business communities, Capitol Hill can finally engage in a long-overdue, serious debate over the most environmentally effective and economically-sound ways to reduce our greenhouse gas emissions."

Among those supporting a carbon tax, that WIMS has reported on in the past include: New York Mayor Michael Bloomberg; Peter Orszag, former director of the Congressional Budget Office (CBO) and incoming Director of the Office of Management and Budget in the Obama Administration; James Hansen, PhD, Director of NASA's Goddard Institute of Space Studies; and Friends of the Earth (FOE) President Brent Blackwelder [See links below for further information].

Access the hearing website for links to all testimony and Chairman Waxman's opening statement (click here). Access Speaker Pelosi's brief statement (click here). Access a press release from USCAP (click here). Access a Blueprint summary from USCAP (click here). Access the complete Blueprint from USCAP (click here). Access the USCAP website for a list of members and more information (click here). Access a CTF release (click here). Access a release from CTF with links to a report on the Carbon Tax and more related information (click here). Access various WIMS-eNewsUSA blog posts on the carbon tax issue (click here). [*Climate]

Comments Wanted On Dems Draft Carbon-Pricing Legislation

Mar 12: Representative Henry Waxman (D-CA), Senator Sheldon Whitehouse (D-RI), Representative Earl Blumenauer (D-OR), and Senator Brian Schatz (D-HI) released draft carbon-pricing legislation and are soliciting feedback on it from stakeholders and the public. The legislation would establish the polluter pays principle for dangerous carbon pollution, requiring large emitters to pay for the pollution they emit.

    According to a release, the "discussion draft" released today (March 12) contains a new and straightforward approach to putting a price on carbon pollution. The nation's largest polluters would have to pay a fee for each ton of pollution they release. The legislation assigns responsibility for the assessment and collection of the carbon fees based upon the expertise that has already been developed by EPA and the Treasury Department. Under the discussion draft, EPA's database of reported emissions would determine the amount of pollution subject to the fee. The Treasury Department would be responsible for the collection and handling of the fees.

    Rep. Waxman said, "Putting a price on carbon could help solve two of the nation's biggest challenges at once: preventing climate change and reducing the budget deficit. There have been carbon tax proposals made by others. What's unique about this one is its novel design. We are seeking to craft a system in which each agency does what they are good at and that minimizes compliance burdens and administrative costs. Utilities, oil companies, and other major sources are already reporting their emissions to EPA. We build off of this existing program."

    Sen. Whitehouse said, "Putting a price on carbon is the best way to reduce carbon pollution and slow the effects of climate change. For far too long, carbon polluters have pushed the true cost of their pollution onto the American people in the form of dirty air, acidified water, and a changing climate. This framework is the beginning of a collaborative process to craft legislation that will reduce carbon pollution while also upholding an important principle: that all of the revenue generated through this carbon fee will be returned to the American people."   

    Specifically, the discussion draft outlines a legislative framework that would:

• Establish a carbon pollution fee that applies to all six categories of greenhouse gases.
• Require large carbon pollution sources to pay the fee for carbon pollution permits based on the quantities of carbon pollution reported by the sources under the EPA's Greenhouse Gas Reporting Rule.
• Create a program to be jointly administered by the Department of the Treasury and EPA. EPA would implement and enforce emissions reporting under EPA's Greenhouse Gas Reporting Rule, and Treasury would assess, collect, and enforce the fee requirements at the point where carbon pollution is emitted or passed on to consumers, depending on the type of source.

    The Members indicate that the approach would: Drive significant carbon pollution reductions; Generate substantial revenue to be returned to the American people; and, Provide broad coverage of greenhouse gas emissions, while minimizing compliance and administrative burdens and utilizing each agency's area of expertise.

    The Members are soliciting comments on the discussion draft from stakeholders and the public. Although comments on any aspect of the draft are welcome, the Lawmakers are specifically requesting feedback on the following questions and requesting that comments be submitted no later than April 12, 2013:

1. What is the appropriate price per ton for polluters to pay?  The draft contains alternative prices of $15, $25, and $35 per ton for discussion purposes.
2. How much should the price per ton increase on an annual basis?  The draft contains a range of increases from 2% to 8% per year for discussion purposes.
3. What are the best ways to return the revenue to the American people?  The discussion draft proposes putting the revenue toward the following goals, and solicits comments on how to best accomplish each:  (1) mitigating energy costs for consumers, especially low-income consumers; (2) reducing the Federal deficit; (3) protecting jobs of workers at trade-vulnerable, energy intensive industries; (4) reducing the tax liability for individuals and businesses; and (5) investing in other activities to reduce carbon pollution and its effects.
4. How should the carbon fee program interact with state programs that address carbon pollution?

    Access a release from the Members with links to a 1-page summary; a section-by-section summary; a backgrounder; and the draft bill text  (click here). Submit comments to the following Email address: (click here). [#Climate, #Air/GHG]

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Bloomberg Tells Mayors Carbon Tax Provides More Certainty

Nov 2: On the final day of the 2007 Mayors Climate Protection Summit [See WIMS 11/2/07], hosted by the U.S. Conference of Mayors and the City of Seattle, over one hundred mayors convened to stress the importance of forming a federal partnership to boost energy independence. Due to recent geopolitical events and the dramatic rise in global energy prices, the mayors called on Congress to complete its work on major energy efficiency legislation by the end of the year and send it to the president for his signature. Mayors have been working closely with Congressional leaders to authorize an Energy Efficiency Block Grant to expand and accelerate community-based energy saving projects.

Among other items the Conference announced a new partnership with the Clinton Foundation’s Climate Initiative (CCI) which will allow 1,100 U.S. cities to gain access to volume discounts on energy-efficient and clean-energy products and technologies through CCI's purchasing consortium. Congressional leaders traveled to Seattle on November 2, specifically to get ideas from mayors about local energy strategies that could be used as national models. Conference leaders, President and Trenton Mayor Douglas Palmer, Miami Mayor Manuel Diaz and Seattle Mayor Greg Nickels, as well as New York Mayor Michael Bloomberg, provided that input.

In his keynote address Mayor Bloomberg had some interesting comments on climate change and the hot debate over a "cap and trade" approach versus a "carbon tax." He said, "On climate change, the duck-and-cover usually involves pointing the finger at others. It's China-this and India-that. But wait a second. This is the United States of America. When there's a major challenge, we don't wait for others to act. We lead. And we lead by example. That's what all of us here are doing... "Leadership is not waiting for others to act, or bowing to special interests, or making policy by polling or political calculus, and it's not hoping that technology will rescue us down the road or forcing our children to foot the bill. Leadership is about facing facts, making hard decisions, and having the independence and courage to do the right thing, even when it's not easy or popular. We've all heard people say, 'It's a great idea, but for the politics.' I hear it a lot..."

Bloomberg, who indicated he will be going to the U.N. Climate Change Summit in Bali next month, as part of an international delegation of mayors, said, “Climate change presents a national security imperative for us, because our dependence on foreign oil has entangled our interests with tyrants and increased our exposure to terrorism. It’s also an economic imperative, because clean energy is going to be the oil gusher of the 21st century.” Mayor Bloomberg called for increased research and development for climate protection, a pollution fee to discourage practices that generate greenhouse gas pollution and raising fuel efficiency standards.

On carbon dioxide emissions, Bloomberg said, "we have to stop ignoring the laws of economics. As long as greenhouse gas pollution is free, it will be abundant. If we want to reduce it, there has to be a cost for producing it. The voluntary targets suggested by President Bush would be like voluntary speed limits - doomed to fail. If we're serious about climate change, the question is not whether we should put a value on greenhouse gas pollution, but how we should do it."

Regarding a cap and trade system as opposed to a carbon tax, Bloomberg said, "Cap-and-trade is an easier political sell because the costs are hidden - but they're still there. And the payoff is more uncertain." However, he noted, "the price volatility for carbon credits can discourage investment since an investment that might make sense if carbon credits are trading at $50 a ton, may not make sense at $30 a ton." He said further, "A cap-and-trade system will only work if all the credits are distributed from the start - and all industries are covered. But this begs the question: If all industries are going to be affected, and the worst polluters are going to pay more, why not simplify matters for companies by charging a direct pollution fee? It's like making one right turn instead of three left turns. You end up going in the same direction, but without going around in a circle first.

"A direct charge would eliminate the uncertainty that companies would face in a cap-and-trade system. It would be easier to implement and enforce, it would prevent special interests from opening up loopholes, and, it would create an opportunity to cut taxes... Creating a direct charge for greenhouse gas pollution would also incentivize the kinds of innovation that a cap-and-trade system is designed to encourage - without creating market uncertainty. To do this, a portion of the revenue from the pollution charge would be used to create an innovation fund, which would finance tax credits for companies that reduce their greenhouse gas pollution. As a result, companies would have two big incentives to reduce their pollution: Minimizing the charges they would have to pay and maximizing their tax savings. And unlike a cap-and-trade system, the certainty of tax credits would be more likely to lead companies to make the long-term investments in clean technology that will allow us to substantially reduce greenhouse gas pollution."

In concluding, Bloomberg said, "Both cap-and-trade and pollution pricing present their own challenges -- but there is an important difference between the two. The primary flaw of cap-and-trade is economic - price uncertainty; while the primary flaw of a pollution fee is political - the difficulty of getting it through Congress. But I've never been one to let short-term politics get in the way of long-term success..."

Access a release from the Conference (click here). Access the Mayors Climate Protection Center website for extensive information (click here). Access the complete text of Mayor Bloomberg's presentation (click here). Access links to all video presentations including Bloomberg, Clinton, Gore, etc. (click here). [*Climate, *Energy]

More Reactions To Kerry-Lieberman American Power Act

May 12: At the roll out of the long-awaited details of their comprehensive energy and climate change legislation -- the 987-page American Power Act -- Senators John Kerry (D-MA) and Joe Lieberman (I-CT), said the legislation would "create jobs, strengthen America's energy independence, safeguard our national security, and restore our global economic leadership for decades to come." The Senators also said The bill is "supported by a wide and deep coalition of business leaders, environmentalists, political leaders and others." In yesterday's coverage of the roll out WIMS included many statements from a diverse groups of supporters [See WIMS 5/12/10]. The following includes a number of additional statements -- many of which are unsure or not supporting the legislation.

 

    Senate Majority Harry Reid (D-NV) said: "The recent oil spill in the Gulf of Mexico demonstrates the urgent need to free our nation from its heavy dependence on oil and to create new clean energy industries and technologies. All Americans would benefit from a comprehensive national energy plan that creates millions of clean energy jobs, improves our national security and reduces pollution. . . As I work with Senators Kerry and Lieberman, the relevant committee chairs and the White House to move this process forward, I welcome the ideas of my colleagues to strengthen this proposal. To be successful we will need significant bipartisan cooperation, and I am hopeful Republicans will join us in working to further develop this bill so that it has broad support and can pass this year."

 

    Senator Lindsey Graham (R-SC), who dropped out of the tripartisan effort with Senators Kerry and Lieberman issued a statement saying, " I don't believe any American finds the status quo acceptable. Many senators from both parties have stated that Congress should set energy and carbon pollution policy, not the EPA. I could not agree more. While I have not seen the changes made by Senators Kerry and Lieberman to the final product, I look forward to reviewing their proposal in regards to offshore drilling, the transportation sector, and other issues. I believe the broad concepts we came up with before are transformational and are the most consumer and business-friendly effort to date in dealing with carbon pollution. Most importantly, they can serve as a framework in allowing America to lead in the creation of alternative energy jobs and significantly reducing our dependency on foreign oil. With these goals in mind, I am interested in carefully reviewing the details of the new proposal."

    There was no immediate reaction from Senate Minority Leader Mitch McConnell, however, Senator James Inhofe (R-OK), persistent critic on the climate change issue and Ranking Member of the Senate Committee on Environment and Public Works said: ". . .it's the same old cap-and-trade scheme that the Senate has defeated three times since 2003," Senator Inhofe said. "In fact, it has a strong resemblance to the disastrous Waxman-Markey bill.  Only now, along with paying skyrocketing electricity prices, consumers will pay a gas tax. . . The sooner we reject global warming cap-and-trade legislation, and get to work on an all-of the-above energy policy, the sooner the American public will have access to affordable, abundant, American-made energy."

 

    The Price Carbon Campaign including the Carbon Tax Center, Climate Crisis Coalition,  Citizens Climate Lobby and others which supports the "People's Climate Stewardship Act," i.e. "a "simple" carbon tax. proposed by Dr. James Hansen at the Climate Rally in Washington, DC, on April 25 [See WIMS 4/26/10] said: "The Kerry-Lieberman bill fails the acid test of climate legislation, which is to provide clear signals on emission prices. Investors, entrepreneurs and households all need certainty in future fuel and energy prices, but Kerry-Lieberman hides these crucial price signals behind a curtain of cap-and-trade. . . Instead of making needed investments in renewable energy, utilities will have the much cheaper option of investing in third-world projects aimed at cutting carbon. Most of these offsets do nothing to reduce current emissions, and they allow polluters in the U.S. to keep burning coal and other dirty fuels."

 

    The Center for Biological Diversity (CBD) issued a statement saying the proposal reflects months of back-room negotiations between the senators, major polluters, and other Washington insiders. They said, "The climate proposal put forth today by Senators Kerry and Lieberman represents a disaster for our climate and planet. This proposal moves us one baby step forward and at least three giant steps back in any rational effort to address the climate crisis. The senators' proposal would entrench our addiction to fossil fuels by offering incentives for increased oil and gas drilling just days after what appears to be the worst offshore oil disaster in American history. . . The senators' weak targets will not reduce carbon pollution to below 350 ppm from its current level of 391 ppm. . ."

 

    The American Petroleum Institute (API) said: "This broad proposal reflects the complex relationship between the U.S. energy system and greenhouse gas emissions which come from every car, home, factory and farm in America. We are reviewing the released text to assess the proposal's possible impact on jobs, energy production, and consumers of oil and natural gas. However, until full legislative language has been thoroughly analyzed, any assessment would be guess work at best. We need reliable data and estimates on how the draft legislation would affect energy production, energy prices, consumers' budgets and the broader economy, in order to judge it on its merits. Moving away from the House Waxman-Markey approach was imperative. . ."

 

    The U.S. Chamber of Commerce said, "The Chamber supports efforts to address energy security and climate change, and believes that any legislation must be comprehensive and bipartisan, and take into account a wide spectrum of issues including American jobs and our economy. . . The Kerry-Lieberman bill is a work in progress. Few in Congress or the business community have had a chance to review the entire bill. Once all the details of the bill are known, the Energy Information Administration (EIA) and the business community will need sufficient time to analyze the bill to ascertain its effects on the economy, jobs, the environment, and energy markets. As we undertake our own analysis of the legislation, we will work with our diverse membership to assess its impact on the business community. It will be critical to determine how this bill will impact a broad range of industries as well as America's energy security."

 

    The American Trucking Associations (ATA) said it cannot support the APA and said: "The bill will raise the cost of gasoline and diesel fuel without significantly reducing the output of carbon dioxide by the trucking industry, which is a non-discretionary user of diesel fuel. The Senate bill would require refiners to purchase billions of dollars worth of carbon allowances that correspond to the carbon footprint of the fuels they sell.  The refiners will then pass this cost on to consumers in the form of higher fuel prices.  As such, the Senate bill operates as a hidden multi-billion-dollar tax. . ."

 

    The National Petrochemical & Refiners Association (NPRA) said the APA should be rejected and indicated: "The draconian carbon reduction targets and timetables in this bill would trigger destructive change in America's economic climate. This would add billions of dollars in energy costs for American families and businesses, destroy the jobs of millions of American workers, and make our nation more dependent on foreign energy sources. America is a nation, not a planet, so it's a fantasy to pretend that restricting our carbon dioxide emissions will improve the environment if China, India and other large and rapidly industrializing nations don't adopt the same restrictions. Carbon dioxide doesn't stop at national borders. If senators want to increase the loss of manufacturing jobs in the United States and postpone the resurgence of the American economy, then they should vote for this bill. . ."

 

    The American Materials Manufacturing Alliance (AMMA), a group of energy-intensive, trade-exposed industries (EITEs) that includes The Aluminum Association, the American Chemistry Council (ACC), the American Forest & Paper Association (AF&PA), the American Iron and Steel Institute (AISI), The Fertilizer Institute (TFI) and Portland Cement Association (PCA), issued a statement saying: "We believe that compared with past bills, the legislation released today invests more in U.S. manufacturing competitiveness.  However, in several key areas, more must be done to ensure the global competitiveness of EITEs and the retention of American jobs. . . the funding must be boosted significantly to meet the objective of keeping U.S. manufacturing competitive.  The bill also does not address increased energy costs: cost containment is key to preventing the transfer of U.S. manufacturing production and jobs to more carbon-intensive developing nations, known as 'carbon leakage.' . . Instead of fully pre-empting U.S. Environmental Protection Agency (EPA) regulation of GHGs under the Clean Air Act, the bill preempts regulation only under specific sections, and only for 'covered' stationary sources. . .  The bill falls short of the uniformity needed to prevent uncertainty and delay in investments . . ."

 

    The blog, The Wonk Room, has posted an interesting table that compares key elements of Obama's campaign promises from 2007 and 2008, the Waxman-Markey American Clean Energy and Security Act as passed by the House of Representatives (H.R. 2454), and the elements of the Kerry-Lieberman draft legislation (see link below). Also, the U.S. Climate Action Network (USCAN) has established an APA website that includes the statements of many groups and organizations as well as letters, documents, links, analysis, videos, timelines and more.

 

    Access the statement from Senator Reid (click here). Access the statement from Senator Graham (click here). Access the statement from Senator Inhofe (click here). Access a release from the Price Carbon Campaign with links to other organizations (click here). Access the CBD statement (click here). Access the API statement (click here). Access a posting from the U.S. Chamber (click here). Access the ATA statement (click here). Access the statement from NPRA (click here). Access the statement from AMMA (click here). Access Senator Kerry's American Power Act website for links to complete information on the legislation (click here). Access the Wonk Room post (click here). Access the USCAN APA website (click here).

Reports Probe International Dimensions Of U.S. Climate Policy

May 21: A new report from World Resources Institute (WRI) and the Peterson Institute for International Economics (PIIE) indicates that U.S. climate change policy can reduce emissions and ensure fair international competition without carbon tariffs, by pursuing international agreements on key industries and targeting relief specifically to impacted domestic firms. The report, Leveling the Carbon Playing Field: International Competition and U.S. Climate Policy Design, is the first in a series of publications from WRI and the Peterson Institute that will examine the international dimensions of U.S. climate policy. Jonathan Lash, WRI President said, “U.S. climate change policy must address international competition through smart policies aimed at the handful of most disadvantaged industries. We must take care to do more good than harm, and create opportunities, not barriers, for further international cooperation.”

The report provides an analysis of proposals that address international competition in climate change legislation, such as the Climate Security Act currently being considered by Congress. On the same day, Senators Barbara Boxer (D-CA), Joseph Lieberman (I-CT), and John Warner (R-VA) released their Substitute Amendment to Climate Security Act (S. 2191) which is expected to be voted on June 2, 2008 [See WIMS 5/22/08].

The report examines what effect “carbon emissions caps” would have on the industries likely to face the strongest international pressures from climate legislation: steel, copper, aluminum, cement, glass, paper, and basic chemicals. Electric utilities are also carbon intense but are not as vulnerable to international competition. According to a release, there is growing concern that domestic climate change legislation would increase costs for carbon-intensive industries, exposing them to greater competition from developing countries, which would have no similar regulations. Proposals to address these concerns include providing free emissions allocations, increasing costs on imported carbon-intense commodities, or encouraging other countries to impose emissions caps of their own.

However, the book finds that several of the proposed options would likely not provide the intended relief, and in some cases could either make things worse or have adverse consequences. For instance, broad carbon tariffs could be difficult to assess and enforce, and provide no opportunity for exporters in developing countries to benefit from adopting higher standards. But trade measures could be tailored to provide this incentive.

To date, many of the trade-specific measures have been intended to bring China to the climate negotiating table. However, China’s exports of carbon-intense goods to the U.S. are relatively small. Instead, the book finds that Canada is the leading exporter to the United States in all categories except basic chemicals, where the leader is Trinidad and Tobago. Europe and Russia are next in importance. Therefore, trade measures provide little incentive for China to adopt stricter emissions regulations, and could sour the prospects for international cooperation.

In addition, China is already seeking to curb exports of carbon-intensive goods due to local energy and environmental concerns, and has recently implemented border treatment for goods like steel that are equivalent to imposing a carbon tax of $50 per ton of CO2. The book’s authors argue that the means of engaging China and other developing countries in reaching international agreements on key sectors is more promising than many think, and would more successfully address both competitiveness and climate concerns than unilateral carbon tariffs at the U.S. border. As part of an international sectoral agreement, trade-specific measures could play a role in creating incentives for individual foreign firms to reduce emissions.

Until an international agreement is reached, U.S. legislators can maintain a level playing field for carbon-intensive manufacturing through domestic policy design. Costs for trade-exposed industries, which account for less than 6 percent of U.S. emissions, can be controlled in a way that does not compromise the environmental effectiveness of U.S. climate policy or risk trade conflicts by imposing border tariffs unilaterally.

At a luncheon event announcing the report, WRI and PIIE indicated that, "In recent presidential-campaign developments, John McCain has backed away from the threat of carbon tariffs, while Barack Obama hints that the issue will serve as a litmus test for whether McCain is serious about climate policy. Trade links to climate policy will only continue to heat up as the full Senate begins debate on June 2 of the Lieberman-Warner bill, which includes provisions for carbon-based border tariffs. This new book argues that such a unilateral approach will be unsuccessful both in protecting U.S. industry and bringing other countries, such as China, to the negotiating table. Speakers will offer alternatives that would prevent U.S. industry from migrating to countries without climate policy, strengthen international negotiations under which those countries will reduce emissions, and avoid starting a trade war."

Access a release on the new report and links to related information (click here). Access an overview and related information including charts and US-CAP recommendations (click here). Access the complete 117-page report (click here). Access the WRI U.S. Climate Change Policy website for additional information (click here). Access links to the luncheon event introductions, audio/video presentations, & Q&A (click here). [*Climate]

WIMS Environmental HotSheet 3/4/14

<> Opportunity For All: Middle Class Tax Cuts In The President's FY 2015 Budget - The President's FY2015 budget released today will show how to achieve real, lasting economic security and expand opportunity for all so that every American who is willing to work hard can get ahead.   The President's budget will show in real terms the choices we can make to expand economic opportunity and strengthen the middle class, like closing unfair tax loopholes so we can invest. . .

<> Here's What They're Saying about EPA's Final Cleaner Fuel and Car Standards - EPA summarizes reaction to its final standards that it says will significantly reduce ground-level ozone, particulate matter, benzene and other air toxics in the air we breathe.

<> Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2012 - Latest facts and figures current through calendar year 2012. Americans generated about 251 million tons of trash and recycled and composted almost 87 million tons of this material, equivalent to a 34.5 percent recycling rate. . .

·  Complete 2012 details and previous reports

<> PJM report finds system could cope with 30% wind and solar, suggests new measures - a new report by PJM on integrating up to 30 percent renewable energy onto the grid, in Texas, wind finds a friend in rail, and Massachusetts is reshaping New England's energy landscape

·  PJM Renewable Integration Study (PRIS)

·  Comment from Union of Concerned Scientists

<> A Map of Every Wind Turbine in the U.S. — Interactive USGS Map Shows Locations of More than 47,000 (and Counting) - The USGS WindFarm interactive web map shows the locations of the more than 47,000 wind turbines installed in the U.S. as of mid-2013. WindFarm and the data behind it cover all 50 states.

<> Drought and Global Climate Change: An Analysis of Statements by Roger Pielke Jr - The President's Science Advisor, Dr. John P. Holdren, published a 6-page analysis rebutting Senator Jeff Sessions (R-AL)  and Dr. Roger Pielke, Jr., a University of Colorado political scientist regarding testimony on the Administration's Climate Action Plan. . .

<> California Carbon Tax Study - An aggressively-priced carbon tax in California, with revenue returned to the public, would actually grow the state's economy and increase jobs, according to a new study released by Citizens Climate Lobby prepared by Regional Economic Models, Inc. (REMI)

<> Enbridge to Undertake $7 Billion Mainline Replacement Program - The company announced they have received shipper support for a $7 billion investment in their Canadian and U.S. mainline system running from Edmonton, Alberta to Superior, Wisconsin. The Line 3 Replacement (L3R) Program will complement the existing Line 3 segment replacement program and include all remaining segments of Line 3 between Hardisty, Alberta and Superior.

<> Congressional Research Service Report On CCS R&D - Carbon Capture and Sequestration: Research, Development, and Demonstration at the U.S. Department of Energy

<> U.S. Forest Service Study Of Winter Freeze & Emerald Ash Borer - study was designed to assess the cold hardiness of emerald ash borer larvae, the overwintering stage of the insect.

·  Washington Post article

<> UNEP's Global Environmental Alert Service (GEAS) - Empowering people with engaging environmental information in a near-real time mode is now in the realm of reality. Using the Internet to provide people with online access to compelling and dynamic information about environmental changes as they occur.

<> Secretary Jewell, NPS Director Release New Report Showing National Parks Remain Strong Economic Engines, Support 243,000 Jobs Nationwide- More than 200,000 of the jobs supported by national parks in 2012 were in local 

<> Ohio wind turbine shutdown raises issue of migratory bird safety - Environmental groups have won what they call a victory for birds with the suspension of a plan to build a wind turbine in Ohio.

<> Sierra Club Challenges Inadequate Federal Review of Cameron LNG Export Proposal - Sierra Club, along with Gulf Restoration Network and RESTORE, filed comments on Federal Energy Regulatory Commission's draft environmental review for the Cameron liquefied natural gas (LNG) export proposal in Louisiana.

<> Insurers Have Huge Role As Clean Energy Investors - Conversations about climate change and the insurance industry usually focus on catastrophic storms and their damaging financial ripples for insurance providers. Given skyrocketing extreme-weather losses in recent years, it's surely a legitimate issue that should be making insurers re-think their business models. But insurers have another important role on the climate issue. . .

<> New Report Outlines Climate Costs of Relaxing Crude Oil Export Regulations - A new analysis published today by Oil Change International shows that eliminating existing regulations on crude oil exports could result in additional greenhouse gas emissions equivalent to 42 coal fired power plants.