From the Whitehouse press office:
Sen. Whitehouse Introduces Legislation to Fight Climate Change and Boost RI Economy
Carbon Fee Bill Would Return All Revenue to the American People
Washington, DC – With Rhode Island continuing to face the effects of climate change and struggling to rebuild its economy in the wake of the Great Recession, U.S. Senator Sheldon Whitehouse is fighting back on both fronts. Whitehouse today introduced the American Opportunity Carbon Fee Act, legislation to make polluters pay for the damage caused by carbon pollution and generate as much as $2 trillion over ten years – all of which would be returned to the American people.
“For years now, Rhode Island has been on the losing end of the fossil-fuel economy,” said Whitehouse. “We suffer the effects of climate change caused by carbon pollution – from rising seas that damage property to warming waters that affect our fishing industry. Meanwhile, the big polluters get to offload the cost of that harm without having to pay a dime. Today I’m introducing legislation to put the costs of carbon pollution back on the shoulders of the polluters where it belongs, while also creating an even playing field for Rhode Island clean energy businesses to compete and generating much-needed revenue to benefit families in Rhode Island and across the nation.”
The American Opportunity Carbon Fee Act would require polluters to pay a fee for every ton of carbon pollution they emit. The fee would start at $42 per ton in 2015 and increase annually by an inflation-adjusted 2 percent. The price of the fee follows the Obama Administration’s central estimate of the “social cost of carbon,” the value of the harms caused by carbon pollution including falling agricultural productivity, human health hazards, and property damages from flooding.
The fee would be assessed on all coal, oil, and natural gas produced in or imported to the U.S. and cover large emitters of non-carbon greenhouse gases and carbon dioxide from non-fossil-fuel sources. The U.S. Department of Treasury would assess and collect the fee, working with the Environmental Protection Agency and Energy Information Administration to ensure the best research methods and data are used.
A study from Resources for the Future, a non-partisan think tank, estimates that a carbon fee tracking the social cost of carbon would reduce carbon pollution by about 50% within a decade from the electricity sector alone compared to business-as-usual. The electricity sector is the largest source of carbon pollution, emitting about 40% of annual emissions.
All revenue generated by the carbon pollution fee – which could exceed $2 trillion over ten years – would be credited to an American Opportunity Fund to be returned to the American people. Possible uses include:
Economic assistance to low-income families and those residing in areas with high energy costs
Social security benefit increases
Tuition assistance and student debt relief
Dividends to individuals and families
Transition assistance to workers and businesses in energy-intensive and fossil-fuel industries
Climate mitigation or adaptation
Reducing the national debt
The Whitehouse bill would raise enough revenue to, for example, cut the federal tax rate on Rhode Island businesses from 35 percent to 30 percent, give every Rhode Island worker an annual $500 payroll tax rebate, and boost the Earned Income Tax Credit by hundreds of dollars a year for 84,000 low-income Rhode Island families.
By requiring fossil fuel companies to factor the cost of their pollution into their product, Whitehouse’s legislation would also give clean energy businesses a fair chance to compete in the energy market. “By making carbon pollution free, we rig the game, giving polluters an unfair advantage over newer and cleaner technologies,” Whitehouse noted. Rhode Island clean- and renewable-energy businesses today applauded Whitehouse’s legislation:
“In order to level the playing field that results from the many subsidies that the fossil fuel industry has in place, the biodiesel industry today is controlled by a number of mandates, regulations and subsidies that are continually changing or are eliminated altogether for periods of time. This makes investment in biodiesel production and infrastructure very tenuous,” said Bob Morton, managing partner at Newport Biodiesel in Newport, RI. “Since biodiesel produces up to 86% fewer greenhouse gas emissions than petroleum diesel, a carbon fee would make biodiesel a much more cost effective fuel and would insure investors that the industry is here to stay. We at Newport Biodiesel want to thank Senator Whitehouse for his continued efforts to raise the awareness of climate change impacts and to develop practical solutions that can help to address those issues. Introduction of this legislation is an important step in bringing climate change to the forefront of the national discussion.”
“Bioprocess Algae is one of the pioneers in biofilm-based algae production and we are currently operating one of the longest-standing biological carbon capture and re-use facilities in the country,” said Tim Burns, CEO of BioProcess Algae in Portsmouth, RI. “Our co-located facility utilizes waste heat and CO2 from a corn-ethanol plant to produce high quality feedstocks for nutritionals, animal feeds, biochemical and fuels. Senator Whitehouse’s leadership on introducing the carbon fee bill, which creates a platform for carbon utilization, is outstanding and a vision for the future.”