By Office of U.S. Senator Brian Schatz

WASHINGTON, DC— Today, Representative Henry A. Waxman, Senator Sheldon Whitehouse, Representative Earl Blumenauer, and Senator Brian Schatz released draft carbon-pricing legislation and solicited feedback on it from stakeholders and the public. The legislation would establish the polluter pays principle for dangerous carbon pollution, requiring large emitters to pay for the pollution they emit.

The “discussion draft” released today contains a new and straightforward approach to putting a price on carbon pollution. The nation’s largest polluters would have to pay a fee for each ton of pollution they release. The legislation assigns responsibility for the assessment and collection of the carbon fees based upon the expertise that has already been developed by EPA and the Treasury Department. Under the discussion draft, EPA’s database of reported emissions would determine the amount of pollution subject to the fee. The Treasury Department would be responsible for the collection and handling of the fees.

“Putting a price on carbon could help solve two of the nation’s biggest challenges at once: preventing climate change and reducing the budget deficit,” said Rep. Waxman of California. “There have been carbon tax proposals made by others. What’s unique about this one is its novel design. We are seeking to craft a system in which each agency does what they are good at and that minimizes compliance burdens and administrative costs. Utilities, oil companies, and other major sources are already reporting their emissions to EPA. We build off of this existing program.”

“Putting a price on carbon is the best way to reduce carbon pollution and slow the effects of climate change,” said Sen. Whitehouse of Rhode Island. “For far too long, carbon polluters have pushed the true cost of their pollution onto the American people in the form of dirty air, acidified water, and a changing climate. This framework is the beginning of a collaborative process to craft legislation that will reduce carbon pollution while also upholding an important principle: that all of the revenue generated through this carbon fee will be returned to the American people.”

“Let’s send a signal to big polluters that it’s past time to start putting a price on carbon and pollution,” said Rep. Blumenauer of Oregon. “This proposal has a great deal of potential to help protect the environment, reduce the deficit, create jobs, and support the transition to clean energy sources and low carbon transportation options. I look forward to working with my colleagues and seeking feedback on how best to use the revenue and ensure that the program is administered in a fair and equitable manner.”

“I am proud to join Congressman Waxman and Senator Whitehouse in supporting a carbon pollution fee that will help protect our health and economy,” said Sen. Schatz of Hawaii. “By reducing carbon pollution, this proposal would drive real action in combating climate change and improving air quality. Hawaii is a national leader in clean energy and efforts to reduce climate change, and a carbon fee will support that good work.”

The Members and Senators are soliciting comments on the discussion draft from stakeholders and the public. Although comments on any aspect of the draft are welcome, the Lawmakers are specifically requesting feedback on the following questions:

• What is the appropriate price per ton for polluters to pay? The draft contains alternative prices of $15, $25, and $35 per ton for discussion purposes.
• How much should the price per ton increase on an annual basis? The draft contains a range of increases from 2% to 8% per year for discussion purposes.
• What are the best ways to return the revenue to the American people? The discussion draft proposes putting the revenue toward the following goals, and solicits comments on how to best accomplish each: (1) mitigating energy costs for consumers, especially low-income consumers; (2) reducing the Federal deficit; (3) protecting jobs of workers at trade-vulnerable, energy intensive industries; (4) reducing the tax liability for individuals and businesses; and (5) investing in other activities to reduce carbon pollution and its effects.
• How should the carbon fee program interact with state programs that address carbon pollution?

All comments are welcome and can be submitted by email to cutcarbon@mail.house.gov. The Lawmakers are requesting that comments be submitted no later than April 12, 2013.

Additional information on the discussion draft is available online here.