A new carbon fee-and-rebate policy, proposed by a coalition known as Put A Price On It D.C., can significantly reduce carbon emissions in Washington, D.C., while maintaining economic growth and job creation, according to a draft study released Thursday.
The study concludes that, if the policy is enacted, greenhouse gas emissions from the use of electricity, natural gas, and home-heating fuel would fall 23 percent in the District of Columbia relative to a business-as-usual baseline by 2032.
The proposed bill, known as the Climate and Community Reinvestment Act of D.C., would charge a fee to greenhouse gas emitters and then return the revenue back to residents, small businesses, and green investment initiatives. The study projects that by 2032, the policy would generate a rebate of $170 per month for the average family of four and $294 per month for a low-income family of four.
The proposed bill is “equitable” for District of Columbia residents and “friendly for our business community,” Camila Thorndike, carbon pricing coordinator for the Chesapeake Climate Action Network (CCAN), said Thursday at an event to release the study’s findings.
If adopted by the District, the proposed carbon fee would start in 2019 at $20 per ton of greenhouse gases emitted, rising $10 per year until reaching $150 per ton in 2032. Current proposed revenue uses include per-capita “carbon rebates,” business tax credits, energy efficiency, green infrastructure, and clean energy investments.
“We have a reasonable starting price that increases predictably over time, giving firms and individual households predictability in energy prices, which is currently lacking and therefore will accelerate the clean energy economy,” Thorndike told the audience.
The bill’s proponents have yet to find a sponsor for the bill on the D.C. City Council, although they have made progress in courting businesses in the city, a CCAN spokeswoman said. CCAN is one of the groups pushing the city council to adopt the carbon fee-and-rebate policy proposal.
The study, titled “Assessing Economic Impacts of a Carbon Fee and Dividend for DC” and prepared by the Center for Climate Strategies, found that the proposed carbon fee-and-rebate policy would also lower business costs by up to $30 million per year through tax relief for small businesses and maintain steady GDP growth within the District.
In Washington state, a carbon tax initiative failed to pass last fall after several environmental groups came out against it. The Alliance for Jobs and Clean Energy, the Washington Environmental Council, and the Sierra Club refused to support the tax, arguing that it did not do enough to hasten the transition to a green economy and did not take into account the needs and wants of traditionally marginalized communities.
Unlike the Washington state proposal, the D.C. plan has “a robust, very diverse, unified coalition of social justice, environmental justice, economic justice, and mainstream environmental groups, as well as small businesses all across the city who are working in concert,” Thorndike explained at the kick-off rally for the initiative in May.
CCAN Director Mike Tidwell told the audience that he is an environmentalist with a “libertarian streak” that allows him to believe markets work. The carbon pricing proposal is a “market-based, conservative idea made to work in a politically liberal city,” he said.
Earlier this week, a pair of Democratic U.S. senators visited the American Enterprise Institute, a conservative think tank, to discuss their plan for a national carbon tax. Sens. Sheldon Whitehouse (RI) and Brian Schatz (HI) have pursued similar plans in the past that would have impose a $45-per-ton fee on carbon dioxide, with that price rising 2 percent annually, in a bid to lower emissions 80 percent below 2005 levels.
“Virtually every person on the Republican side who has fought the climate change problem through to a solution has come to the same place: Price carbon emissions to encourage cleaner energy and return the revenue to the American people,” Whitehouse said at the AEI event.
Like the advocates of the carbon pricing proposal in the District, Whitehouse and Schatz presented their “The American Opportunity Carbon Fee Act” as a conservative approach to addressing climate change and championed the bill as politically and economically sound, according to an E&E News report.
Democrats aren’t the only ones pushing a carbon tax. In June, a group of major businesses, including Johnson & Johnson, General Motors, and fossil fuel giants ExxonMobil, BP, and Shell, announced that they had joined several high-profile Republicans who proposed to put a $40 tax on carbon emissions. The companies are part of the Climate Leadership Council, whose platform was written by former Republican cabinet members James Baker and George Shultz.
The release of the study for the carbon pricing plan in the District comes on the heels of Mayor Muriel Bowser pledging last month to uphold the goals of the Paris climate agreement by reducing city-wide emissions by 80 percent by 2050. Hundreds of cities in the United States have committed to honor the Paris agreement’s goals since President Donald Trump exited from the international agreement.
No plans have been released on how the District of Columbia will meet this target, according to CCAN. “By passing the Climate and Community Reinvestment Act of DC, the D.C. Council can utilize a carbon fee-and-rebate policy as an effective vehicle to meet this strong reduction goal,” the group said in a fact sheet about the plan.