February 5, 2018

Whitehouse, Schatz, Blumenauer, Cicilline Introduce Updated American Opportunity Carbon Fee Act

Bill would support American workers and speed America’s transition to carbon-free energy

Washington, D.C. – Today, Senators Sheldon Whitehouse (D-RI) and Brian Schatz (D-HI) and Congressmen Earl Blumenauer (D-OR) and David Cicilline (D-RI) reintroduced their legislation to place a price on the carbon pollution driving global climate change and putting Americans’ health and safety at risk.  The American Opportunity Carbon Fee Act, which has been updated to reflect recent changes in the tax code, would significantly lower the nation’s greenhouse gas emissions while generating substantial revenue to boost the economy and aid American workers and consumers. 

“A carbon fee is the way economists of all stripes say we should end the massive subsidy to the fossil fuel industry and reduce carbon pollution,” said Senator Whitehouse.  “Our bill would harness the power of markets to ensure carbon polluters pay for the harm of their products, and then return the revenue directly to the American people.  That would mean a win for our environment, a win for our economy, and a win for American families.”

“Climate change shouldn’t be a partisan issue.  We need bipartisan leadership, and market-based solutions have support across the ideological spectrum,” said Senator Schatz.  “Our bill would establish a set of incentives that allows capital to flow and businesses to thrive when they use clean energy, letting the free market hold polluters accountable.  The price on carbon in our bill is predictable, straightforward, and gets the carbon pollution reductions we need to fight climate change.”

“Climate disruption is not going away – it is only getting worse.  Putting a price on carbon is an imperative,” said Representative Blumenauer. “It’s past time that Congress update our public health policies and our tax code to reduce carbon pollution and ensure we have a safer climate for future generations.”

“It is time for polluters to pay their fair share,” said Representative Cicilline. “We cannot simply continue to ignore the overwhelming science that climate change is happening and presents a serious threat to our national security, our economy and the health and well-being of millions of Americans.  The federal government should not be in the business of subsidizing carbon pollution, and I applaud Senator Whitehouse and Senator Schatz for their leadership on this important legislation.”

Carbon pollution from human activity is changing our climate, harming our economy, health, and environment.  The United States is currently the second-largest source of carbon pollution in the world and has emitted more carbon dioxide than any other nation in history.

To ensure emitters are held responsible for the harm they offload onto the American people, the American Opportunity Carbon Fee Act would assess a fee on fossil fuels and other sources of greenhouse gases.  The fee would start at $50 per metric ton of emissions in 2019—the mid-range of the Obama administration’s 2016 estimates of the “social cost of carbon,” which measures the long-term damage done by carbon pollution—and increase annually by 2 percent over inflation.  It would be assessed on fossil fuels when mined, processed, refined, or imported; on large emitters of non-fossil-fuel-based greenhouse gases; and on producers and importers of certain industrial gases with high global warming potential.  The fee on fossil fuels would be adjusted to account for methane emissions from venting, carbon dioxide from flaring, and other greenhouse gas emissions that escape throughout fossil fuel supply chains.  The Treasury Department would assess and collect the fee, and impose border adjustments to level the playing field for manufacturers of energy-intensive goods. 

A growing number of prominent Republicans have come out in support of a carbon fee, including former Treasury Secretaries James Baker, George Shultz, and Henry Paulson; former Environmental Protection Agency Administrators William Ruckelshaus, Lee Thomas, William Reilly, and Christine Todd Whitman; and leading economists and former presidential economic advisors Arthur Laffer, Gregory Mankiw, and Douglas Holtz-Eakin. 

According to the independent, nonpartisan think tank Resources for the Future, the bill would reduce energy-related carbon dioxide emissions by 36 percent compared to 2005 levels by 2025.  Resources for the Future found that by the middle of the next decade, the bill would lead the United States to beat its carbon emissions targets set forth in the 2016 Paris Agreement pledge and deliver more than twice the utility-sector carbon reductions by 2030 than the Obama administration’s Clean Power Plan.

The revenue generated through the fee—over $2 trillion in the first decade—would be used to:

  • Offer workers an annual inflation-adjusted $800 refundable tax credit to offset payroll taxes paid (with comparable payments for Social Security and veterans beneficiaries); and
  • Deliver at least $10 billion annually in grants to states for a range of purposes, including helping low-income and rural households, workers transitioning to new industries, and communities battling the effects of climate change.

American companies like Procter & Gamble, General Motors, PepsiCo, and ExxonMobil have announced support for a “gradually rising” carbon fee—not unlike the American Opportunity Carbon Fee Act.  The corporations and conservative leaders took out a full-page ad in the Wall Street Journal stating that such a plan “would achieve significantly greater emissions reductions than all current and prior climate regulations, while helping America’s businesses and workers get ahead.”


Press Contact

Meaghan McCabe, (202) 224-2921