SANDERS-BOXER LEGISLATION WOULD ENACT $20 PRICE ON CARBON

Companion Bill Would Eliminate DOE’s Fossil Energy R&D Program, EOR Tax Credits

Tamar Hallerman
GHG Monitor
2/15/13

Days after President Obama stressed the need for Congress to act on climate change in his State of the Union address, two Senate Democrats unveiled legislation that would set a $20 price on carbon emissions. Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) introduced the “Climate Protection Act,” which would charge the country’s 2,900 largest polluters—covering about 85 percent of the country’s pollution sources—a $20 per ton fee for carbon emitted into the atmosphere. The tax would increase 5.6 percent annually over a 10-year period under the legislation, which also sets a long-term emissions reduction goal of 80 percent below 2005 levels by mid-century. “What this bill does is address the [climate] crisis,” Sanders said during a Feb. 14 press conference. “It can reverse greenhouse gas emissions in a very significant way. It can create millions of jobs as we transform our energy system away from fossil fuel and into energy efficiency and such sustainable energies as wind, solar, geothermal and biomass.”  

Quoting an estimate from the Congressional Budget Office, Boxer and Sanders said the $20 per ton tax on carbon could raise $1.2 trillion in revenue over 10 years and reduce greenhouse gas emissions 20 percent from 2005 levels by 2025. The bill stipulates that 60 percent of revenues from the tax be used to create a clean energy rebate program to provide monthly rebates to every legal U.S. resident. Another portion of that revenue would be used to triple ARPA-E’s budget, weatherize one million homes annually, invest $1 billion per year in clean energy worker training  and create a ‘sustainable technologies finance program’ that would leverage $500 billion via public-private partnerships for investments in wind, solar, geothermal, advanced biomass and other types of clean energy technologies, Sanders said. It would also funnel about $300 billion to debt reduction over 10 years.

The legislation also applies the $20 per ton tax to imported energy unless the country of origin also has a carbon pricing system in place. “This provision would be a spur for exporting nations to enact domestic programs and cooperate on an international treaty,” according to a bill fact sheet. It also closes the so-called ‘Halliburton loophole,’ subsequently requiring companies to comply with the Environmental Protection Agency’s Safe Drinking Water Act and disclose the chemicals used in their hydraulic fracturing processes.

Companion Bill Would Nix CO2 Storage, EOR Tax Credits

Sanders and Boxer also introduced companion legislation, the “Sustainable Energy Act,” that would end all fossil fuel subsidies and extend some renewable energy tax incentive programs for sources like solar, wind and combined heat and power systems. It also includes provisions to “terminate” the Department of Energy’s Fossil Energy R&D program and bar DOE’s Advanced Research Projects Agency-Energy program from pursuing any projects that support coal, oil or natural gas. The legislation would end existing tax credits for enhanced oil recovery, tertiary injectants and the production of oil and gas from marginal wells. It would also cancel the IRS’ 45Q tax credit for carbon sequestration, as well as other credits for gasification and other advanced coal projects.

Boxer Hopes to Consider Bill This Spring

As Chair of the Senate Environment and Public Works Committee—which has jurisdiction over both bills—Boxer said she is looking for her panel to begin consideration of the legislation “in earnest” by early spring, with hope that the bills can reach the Senate floor this summer. In the meantime, Sanders and Boxer said they are looking for Republican co-sponsors. The legislation, though, will likely be a tough sell across the aisle. Nevertheless, Sanders said he hopes the issue of climate change can become depoliticized. “The issue we are dealing with today is not political. It has nothing to do with Democrats, Republicans, Independents and all of the political squabbling that we see here every day on Capitol Hill,” he said. “What we’re dealing with today is physics.”

Sanders: Congress Must Not Get Left Behind

Sanders, an outspoken member of the Senate Energy and Natural Resources and Environment and Public Works committees, said Congress cannot let the White House leave it behind in terms of fighting climate change. “The President can and must use his authority to cut down on power plant pollution and reject the dangerous Keystone XL project,” Sanders said. “But he cannot give up on a comprehensive legislative solution, and neither can we, and that is what Sen. Boxer and I are offering.” Obama on Tuesday called on Congress to pass a “bipartisan, market-based solution” like cap-and-trade, but promised to use existing executive power to act if lawmakers failed to do so.

Bill McKibben, the founder of the environmental group 350.org who spoke at Thursday’s press conference, agreed that now is the right time to act. “I think a lot of people wonder whether our political system is up to this task. Over the last quarter century, its done very little, but we’re now at the point where there’s no abstraction about this problem,” he said. Given record high temperatures and extreme weather events like Hurricane Sandy over the last year, he added, “it’s so powerful to see this legislation being introduced at this time.”

Boxer said both pieces of legislation would help reestablish the U.S. as a leader in helping fight climate change. “The Sanders-Boxer bill reduces carbon pollution and climate disruption while creating jobs and reducing the deficit. If ever there was a win-win-win, this bill is one,” she said at the press conference. “If you add this to the positive steps the EPA can take under the Clean Air Act, then the American people will see that we’re serious and we are not waiting for China [to act]. We, the greatest nation on earth, will take the leadership.”