What is the Energy Innovation and Carbon Dividend Act?
The Act provides hope that eventually, climate change and environmental protection will become an issue with bipartisan support
On December 19, 2018, the Energy Innovation and Carbon Dividend Act was introduced to the Senate as S.3791, and the bill has been reintroduced to the House on January 17 by Rep. Ted Deutch (D-Fla.) and Rep. Francis Rooney (R-Fla.).
The centerpiece of this bill includes a carbon fee of a 15 dollars per metric ton of carbon released by fossil fuels like coal, oil, and natural gas. The fee would also rise by 10 dollars per year until emissions targets are met. The emission reduction targets are detailed below. Some exceptions detailed in the document mostly regard agriculture and military operations.
In order to protect American businesses, a carbon border fee adjustment would be put in effect.
Apart from administrative costs (which would be limited to 2%), the funds collected will be redistributed to the American households in equal shares as checks or deposits. These funds would hypothetically offset rising prices for oil from refinery and drilling companies. According to a study done by Columbia University’s Center on Global Energy Policy, “Under the Deutch proposal, low- and middle-income households would receive more in rebates than they pay in taxes, while high-income households would pay more in taxes than they receive in rebates.”
Compared to carbon tax proposal by Republican Carlos Curbelo, this plan would implement a smaller initial tax but eventually increase to overtake the Curbelo tax. Furthermore, unlike in the Curbelo proposal which would have allocated majority of the funds to transportation and infrastructure projections, the Energy Innovation and Carbon Dividend Act will almost entirely return the money as rebates.
“The goal was to craft a climate proposal that will be a huge leap forward in the way America responds to climate change,” Deutch said. “In South Florida, climate change is not a political issue. Our hope is with the introduction of the legislation that Congress shows that it can understand that as well.”
According to researchers, this policy will reduce America’s emissions by at least 40% in the first 12 years. According to Politico, “Backers argue the effort will deliver major benefits: 2.1 million net new jobs by the 10th year; 13,000 avoided pollution-related U.S. deaths annually and a 90 percent reduction in carbon emissions from 2015 levels by 2050.”
Sen. Sheldon Whitehouse, praised the bill as an “important step” in a statement, “I hope that this bipartisan work in the House will prompt Republican colleagues here in the Senate to look at using the power of markets to solve this problem.”
Some environmentalists are actually worried that the bill will essentially rid the EPA of its authority to pass protective measures on emissions and CO2. However, rules regarding water and more specific air quality control like methane and mercury will remain untouched.
Some are hopeful that with the new bipartisan Congress, the act will have a greater possibility of passing. In an interview with WBUR, Rep. Charlie Crist, D-Fla. said, “This new Congress that comes in in just a few weeks is going to be a bipartisan Congress, a Democratic House and a Republican Senate. What better time?”
For more information visit: https://energyinnovationact.org