A variety of carbon pricing bills circulated through the US Congress in 2019 and 2020. They are linked and summarized here.
The Energy Innovation and Carbon Dividend Act of 2019 (HR 763) places a price of $15 per metric ton of carbon dioxide, starting in 2020, which increases by $10 per year or $15 per year if the previous year’s emissions goals are not reached. The bill establishes a “Carbon Dividend Trust Fund” in the US treasury using 100 percent of the net revenue raised from this fee, which is distributed as a dividend back to households.
The American Opportunity Carbon Fee Act of 2019 (S. 1128) imposes a carbon fee on fossil fuels where they are mined, processed, refined, or imported. The fee starts at $52 per metric ton CO2 e and rises at 6 percent above inflation annually. By 2035, the fee would be about $125 per metric ton (in $2020). The legislation aims to protect vulnerable American households and businesses through refundable tax credits and carbon border adjustments.
The Climate Action Rebate Act of 2019 (S 2284) imposes a gradually rising fee on fossil fuels and fluorinated gases, starting at $15 per metric ton of CO2e. The fee is tied to annual emissions reduction targets and rises more quickly if those targets are not met, peaking at $165/ton by 2030. The bill includes a border carbon adjustment, and rebates 70% of net revenues from the carbon fee to low- and middle-income Americans as a monthly dividend, with the remainder of revenues spent on green energy investments.
The Stemming Warming and Augmenting Pay Act of 2019 (HR 4058) imposes tax of $30 per metric ton of CO2e with an annual increase of 5% plus inflation. For every 2 years that emissions reductions are behind goals, an automatic $3 per ton increase would be charged. 70% of net revenue raised would be used to reduce individual, employer, or self-filing payroll taxes, 10% would be paid to social security beneficiaries, and the remaining 20% would be used to establish a carbon trust fund which would be designated for state block grants used to offset higher energy costs for low-income households, and advanced research and development programs on climate adaptation and energy efficiency.
The Raise Wages, Cut Carbon Act (HR 3966) is very similar to the Stemming Warming and Augmenting Pay Act (introduced on the same day by the same two bipartisan cosponsors) sets a higher initial tax rate ($40 vs. $30) and a lower increase rate (2.5% vs. 5%).
The America Wins Act of 2019 imposes a tax on carbon at an initial rate of $52 per ton emitted rising 6% above inflation annually, and invests the revenue in infrastructure, energy research, frontline communities, and consumer relief programs. It includes a Carbon Equivalency Fee, a form of carbon border adjustment.
The Healthy Family and Climate Security Act of 2019 (S 940) is the sole cap-and-trade bill recently introduced. It requires CO2 emissions reductions of 12.5% by 2020, 35% by 2025, 50% by 2030, 60% by 2035, and 80% by 2040 below 2005 levels. It caps fossil fuels, requires energy companies to purchase pollution permits at auction, and returns all the auction revenue in equal amounts to every U.S. resident with a valid Social Security number.
The America’s Clean Future Fund Act, introduced in summer 2020, would set a steadily rising price on carbon dioxide emissions. The tax would start at $25 per metric ton of emissions and rise by $10 or more per year. Given the COVID-19 economic downturn, the bill suggests waiting to institute the price until “the U.S. economy is no longer in economic turmoil due to the current pandemic,” but no later than 2023.
The Carbon Pollution Transparency Act would reinstate the Obama administration’s social cost of carbon and codify the metric for federal rulemakings.