Draft Bill Released By Rep. Waxman and Sen. Whitehouse Would Price Carbon And Reduce Emissions

In the last two years, severe extreme weather events — including drought and hurricanes — have cost the American economy $188 billion. Unfortunately, this situation will worsen if we continue to burn fossil fuels that release carbon pollution into the atmosphere. In fact, just yesterday, scientists in Hawaii found that the amount of carbon dioxide in the atmosphere jumped dramatically to a new record high in 2013. Clearly, we’re on the wrong path.

The good news, though, is that we can solve this problem and avoid the most catastrophic effects of climate change by putting less pollution in the air. That’s why more of our elected officials are getting serious about putting a price on carbon dioxide pollution.

In last month’s State of the Union address, President Obama said

“I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will.”

Today, legislators from the House and Senate responded to the President’s call. Representative Henry Waxman (D-CA), Senator Sheldon Whitehouse (D-RI), Representative Earl Blumenauer (D-OR) and Senator Brian Schatz (D-HI) released a discussion draft of a bill that would charge polluters for the carbon pollution they release into the air, reducing the pollution responsible for fight climate change.

In December 2012, CAP established five principles for a progressive carbon fee. This fee should:

  • Be sufficiently robust that it leads to meaningful reductions in greenhouse gas pollution, getting us on a path that helps us avoid the most catastrophic effects of climate change. In addition to being high enough to affect pollution rates, the tax should also increase over time and be applicable to non-carbon-dioxide greenhouse gases such as methane. This would both ensure a continuing reduction in the release of carbon dioxide and also encourage companies to move toward cleaner energies instead of different dirty ones.
  • Encourage businesses to make new investments in energy efficiency and renewable energy to reduce greenhouse gas emissions. This will stimulate the economy and put people back to work in the burgeoning clean-tech and green-jobs sectors.
  • Reduce—not increase—economic vulnerability of low-income households by ensuring that they are fairly compensated for any increase in energy prices.
  • Have appropriate mechanisms to protect existing American businesses and prevent so-called pollution leakage to countries without similar systems in place. Leakage occurs if highly polluting industries simply move to other countries that don’t have a comparable limit on pollution; in this way, they can continue business as usual without stricter environmental regulations. Leakage can also happen if domestic industries shut down, causing us to import goods from other countries.
  • Reduce the budget deficit to prevent draconian cuts in vital domestic programs by raising revenue from the tax.

The draft bill from Waxman, Whitehouse, Blumenauer, and Schatz meets these principles. It suggests a price of $15-30 per ton of carbon dioxide, which is sufficient to significantly reduce pollution. The bill collects the fee from midstream entities that already report greenhouse gas pollution data to the government, so it creates no large new bureaucracy. The draft also seeks comment on the best ways to spend the revenue, including consumer protection and deficit reduction.

This draft bill is part of an ongoing effort by Waxman and Whitehouse to continue to educate lawmakers and the media about the tremendous health and economic threats posed by climate change, as co-chairs of the Bicameral Task Force on Climate Change. They have solicited policy ideas from large businesses and environmental groups. They also sent a letter to the President recommending executive actions he could take to reduce carbon pollution under existing laws.

The authors of the draft bill are soliciting comments until April 12, and plan to formally introduce a new version of the bill in the coming months. With the leaders of the House majority denying the fundamental science of climate change, its prospects for passage are admittedly dim. This time, however, is Congress’s chance to act. Unless this bill or something very similar gets passed, Congress can look forward to the Environmental Protection Agency using its authority under the Clean Air Act to put limits on greenhouse gas pollution from the largest polluters.

Richard W. Caperton is Director of Clean Energy Investment at the Center for American Progress.

13 Responses to Draft Bill Released By Rep. Waxman and Sen. Whitehouse Would Price Carbon And Reduce Emissions

  1. Paul says:

    20 dollars per tonne isn’t going to be doing much to reduce anything. Kind of toothless.

  2. paulina says:


    What’s the range of cumulative US emissions for that carbon fee range (and range of rate of fee increase), thru 2020, 2030, and 2050?


  3. SecularAnimist says:

    Obama said in the State of the Union address: “But if Congress won’t act soon to protect future generations, I will.”

    Obama also said: “We produce more oil at home than we have in 15 years … We produce more natural gas than ever before … my Administration will keep cutting red tape and speeding up new oil and gas permits.”

    You cannot massively expand the extraction of fossil fuels and also “protect future generations” from global warming. The two are completely incompatible.

  4. Dick Smith says:

    You couldn’t ask for two more committed leaders. But, Paul (above) is right. $15-30 per ton CO2 would be fine for a start…but where are the significant (roughly, $10 per ton annually) increases that are needed to get the dramatic 80% reductions in emissions by 2050.

  5. Joe Romm says:

    Actually, it would do a lot!

  6. Ed Leaver says:

    Above all, politics is the Art of the Possible. The Bicameral Task Force on Climate Change has an impossible Task, and they know it. A more realistic True Market Cost of greenhouse gas is something like $260/ton CO2e, which doesn’t pass the political laugh test. This is currently a draft bill, its major objective is to ratchet the education process in Congress, to continue to insist that Lamar Smith and colleagues repeatedly face their collective denialism. And failing that, to keep the issue before the MSM and voting public so that we may take appropriate action at the polls.

  7. paulina says:

    That education process would do well to include projected cumulative US 2000-49 emissions as a function of the carbon price and its development so that we can see what share of the global cumulative carbon budget we are contemplating claiming.

  8. Mulga Mumblebrain says:

    It’s the same in Australia. The PM, Gillard, was forced by the Greens, whose support she needed, to bring in a carbon tax. She is known to have been one of those who subverted Rudd’s bid for a carbon price when he was PM and she the deputy. After the carbon price is passed, amid a furious and quite deranged hate campaign by the Opposition Leader, Tony ‘Climate Change is Crap’ Abbott, abetted, naturally, all the way, by the Murdoch sewer, Gillard immediately renders it null by pushing a massive increase in coal mining and gas extraction. She has followed up by sacrificing the Tarkine wilderness to miners and hard Right ‘trade union’ thugs, and pledging to the business community to cut ‘Green Tape’ ie the pitiful scraps of environmental protection hard won over decades. And you ought to see her when Obama is in the same room! The doe-eyed devotion is quite pathetic, really. Like a love-struck teenager. Poor fella my country.

  9. It would be huge. Not the amount of money, but the strategic implication of a carbon tax. Then the fight becomes about how much the tax should be, not whether it should exist. Even if it were $1 dollar per tonne, it would be a pivotal victory.

  10. Agree. Adding is not cutting. Is it, Mr. Orwell?

  11. One thing at a time. The ratification of a carbon tax would be like passing the Social Security Act: absolutely revolutionary. The rate can be tweaked later.

    If a carbon tax is passed, I will buy everyone in this thread a drink. Of course, you have to present to win… ;-)

  12. Camburn says:

    All the introduction of a bill such as this, at this time, does is provide for more litigation.

    The EPA is pushing coal out of the picture in the USA, and expanding its use worldwide.

    The EPA is providing a market for Natural Gas.

    All in a days work.

  13. Rob says:

    No, NO, and NO!! I am NOT a “lower income” household, but we are strictly middle income. I have a family of 5 living on $60,000. However, we still canNOT afford higher energy costs (bring back $2/gallon gas!). We just can’t drop our other obligations (medical bills, credit cards, mortgage) and pay your higher costs. It is NOT RIGHT if lower income families get checks back and we will not. There should be NO separation due to income.