Carbon Fee Bill Would Benefit Algae Industry

November 21, 2014

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by Erin Voegele (Biomass Magazine) Legislation recently introduced in the U.S. Senate includes a provision that would encourage carbon utilization technology. The Algae Biomass Organization has spoken out to applaud the bill, which calls for greenhouse gas (GHG) regulations that would promote the use of carbon dioxide as a feedstock for plastics, biofuels, chemicals and other products.
The bill, titled “The American Opportunity Carbon Fee Act,” or S. 2940, was introduced by Sens. Sheldon Whitehouse, D-R.I., and Brian Schatz, D-Hawaii on Nov. 19 and referred to the Senate Committee on Finance.
According to Whitehouse, the legislation is designed to correct a market failure that currently allows polluters to push the costs of their pollution onto everyone else. “Right now we are subsidizing big polluters to the tune of hundreds of billions of dollars annually by allowing them to pollute for free,” said Whitehouse in a statement. “We all pay the costs of this subsidy through higher health costs, property damage from rising seas, warming waters that affect our fishing industry, and more. This legislation will put the costs of carbon pollution back on the polluters, and in doing so, will generate significant revenue – all of which will be returned to the American people.”
Information released by Whitehouse’s office indicates the legislation would require polluters to pay a fee for every ton of carbon pollution they emit, starting at $42 per ton in 2015 and increasing annually by an inflation-adjusted 2 percent. The fee would be assessed on coal, oil and natural gas produced in the U.S. or imported into the country, and would cover large emitters of non-carbon GHGs and carbon dioxide from non-fossil fuel sources.
Whitehouse estimates the legislation could generate as much as $2 trillion over 10 years. READ MORE and MORE (The Hill) and MORE (Senator Sheldon Whitehouse (D-Rhode Island) as prepared for deliver--see below) and MORE (Thomas/Library of Congress)

Senator Sheldon Whitehouse's remarks: Wednesday, November 19, 2014 Mr./Madam President, I rise today for the eightieth time to ask this body to wake up to the growing threat of global climate change. I rise today also to introduce the American Opportunity Carbon Fee Act.
Carbon dioxide from burning fossil fuels is changing the atmosphere and the oceans. We see it everywhere. We see it in storm-damaged homes and flooded cities. We see it in drought-stricken farms and raging wildfires. We see it in fish disappearing from warming, acidifying waters. We see it in shifting habitats and migrating contagions.
All these things we see carry costs—real economic costs—to homeowners, business owners, and taxpayers. That cost is known as the “social cost of carbon.” It’s the damages people and communities suffer from carbon pollution and climate change.
None of those costs from carbon pollution are factored into the price of the coal, oil, or natural gas that releases this carbon. The fossil fuel companies have offloaded those costs onto society.
That’s just not fair. If you rake your lawn, you don’t get to dump the leaves over the fence for your neighbor to clean up. If you’re located on a river, you don’t get to dump your garbage for the downstream landowners to clean up. Yet carbon polluters transfer the costs of climate change to everyone else.
The U.S. government estimates the social cost of carbon pollution to be around forty dollars per ton of carbon dioxide, an amount that rises over time as carbon pollution creates more and more harm. So a climbing forty dollars per ton is the cost; the current effective price on carbon pollution is zero.
By making their carbon pollution free, we subsidize fossil fuel companies to the tune of hundreds of billions of dollars annually. By making their carbon pollution free, we rig the game, giving polluters an unfair advantage over newer and cleaner technologies. It’s a form of cheating, and corporate polluters love it because it gives them advantage. But it’s wrong.
As University of Chicago Economics Professor Michael Greenstone recently explained, this concept is widely accepted:
"The media always reports that there’s near consensus amongst scientists about the fact that human activity impacts climate change. What does not receive as much attention is that there’s even greater consensus amongst economists, starting from Milton Friedman and moving into the most left-wing economists that you could find, that the obvious correct public policy solution to this is to put a price on carbon. It’s not controversial."
Today I am introducing a bill to put a price on carbon emissions. It’s simple. It will require the polluters to pay a fee for their pollution. All of the revenue generated will return to the American people.
I thank Senator Brian Schatz of Hawaii for cosponsoring this measure. He’s been a great colleague on environmental issues and against climate change.
The bill we introduce today establishes an economy-wide fee on carbon dioxide and other greenhouse gas emissions, tracking the social cost of carbon: starting at forty-two dollars a ton and going up by 2 percent per year plus inflation.
We know how much carbon dioxide each unit of coal, oil, and natural gas produces, so we assess the fee on fossil fuel producers, processors, and importers. That makes it simple to administer. The whole bill is only twenty-nine pages long.
For other varieties of greenhouse gases and non-fossil-fuel sources of CO₂, we assess our fee only on the largest emitters—those emitting more than 25,000 tons a year. This is the same universe of companies we already require to monitor and report on their emissions.
We recognize that a significant greenhouse gas concern is the methane that escapes throughout production and distribution. To address this, we require annual reports on methane leakage and direct the Treasury Secretary to adjust the fees on fossil fuels to account for it.
This fee will promote innovation to help further reduce carbon emissions. Fossil fuel companies that capture and sequester carbon dioxide, or innovate ways to encapsulate it in materials or products, get credits to offset the carbon fee.
We also take care to ensure that American manufacturers are not put at a competitive disadvantage globally. Imports from nations that don’t price emissions will face a tariff that the Treasury Secretary is authorized to impose at the border. Likewise, the Secretary is authorized to rebate American producers on their exports.
Since regulation is usually a response to market failure, a well-designed carbon fee would also open a conversation about whether carbon regulations are still needed. A carbon fee would be much more efficient and predictable than complex regulations.
That’s it. It’s that simple. Make the polluters pay the full costs of their products. Level the playing field for other forms of energy like wind and solar to fairly compete. Keep the fee mechanism simple. Maintain a border adjustment that keeps American goods competitive.
On the flip side, the carbon fee will generate significant new federal revenue. The technicians are still working on the official revenue estimate for the bill, but it should be at least $1.5 trillion, and perhaps more than $2 trillion, over the first decade. Whatever the exact number is, all of it should be returned to the American people.
The bill establishes an American Opportunity Trust Fund to return the revenue to the American people. This could include tax cuts, student loan debt relief, increased Social Security benefits for seniors, transition assistance to workers in fossil-fuel industries, or even direct dividends to American families. I look forward to deciding with my colleagues on the best way to return the revenue, but I believe that every dollar should go back to the American people in some form.
Here’s one example to consider: we could cut the corporate tax rate from 35 percent to 30 percent. That’s estimated to cost about $600 billion.
Then we could give every single American worker an annual $500 payroll tax rebate for about $700 billion.
There would even be enough money from the fee to pay for the corporate and payroll tax cuts and on top of that to boost the Earned Income Tax Credit by hundreds of dollars a year for millions of lower-income families.
The American Opportunity Carbon Fee Act would promote market-based innovations to solve our carbon pollution problem. Its revenue could make our companies more competitive, give every single worker a tax cut, and boost benefits for low-income families.
Last month, the former editorial-page editor of the Des Moines Register wrote a column titled: “‘Carbon tax’ would help Iowa, planet.” “The United States could take the lead by acting on its own, watch its economy grow, and let the rest of the world catch up,” he wrote. “In the process, the United States would gain mastery of the sustainable-energy technology that will drive economic growth in the future.”
Mr./Madam President, I ask unanimous consent that this column be entered into the Record.
George W. Bush’s Treasury Secretary Hank Paulson gave the same message earlier this year, saying, “A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure.
“Republicans must not shrink from this issue,” he continued. “Risk management is a conservative principle.”
Hank Paulson is not alone. Conservative figures like George Shultz, Secretary of State under President Reagan, emphatically support a carbon fee as the best way to address carbon pollution.
Art Laffer, one of the architects of President Reagan’s economic plan, had this to say about a carbon tax and related payroll tax cut: “I think that would be very good for the economy and as an adjunct, it would reduce also carbon emissions into the environment.”
In a 2013 New York Times op-ed, four former Republican EPA Administrators—Bill Ruckelshaus, Christine Todd Whitman, Lee Thomas, and William Reilly—wrote, “A market-based approach, like a carbon tax, would be the best path to reducing greenhouse-gas emissions.” I ask unanimous consent that their op-ed be entered into the Record.
I know the big carbon polluters want this issue ignored. They want to squeeze one more quarter, one more year of subsidy from the rest of us. Lunch is good when someone else picks up the check.
But I still believe this is a problem we can solve. Mr./Madam President, not long ago, this would have been a bipartisan bill. Not long ago, leading Republican voices agreed with Democrats that the dangers of climate change were real. Leading Republican voices agreed that carbon emissions were the culprit. And leading Republican voices agreed that Congress had the responsibility to act.
One Republican senator won his party’s nomination for president on a solid climate change platform. A number of our Republican colleagues in the Senate introduced, cosponsored, or voted for climate legislation in the past. Some of the proposals were market-based, revenue-neutral tools, aligned with Republican free-market values.
The junior Senator from Arizona, a Republican, was an original cosponsor of a carbon fee bill when he served in the House of Representatives. That proposal, introduced with former Republican Congressman Bob Inglis, would have placed a $15-per-ton fee on carbon pollution in 2010, more than $20 in 2015, and $100 in 2040. At the time, our colleague from Arizona had this to say: “If there is one economic axiom, it’s that if you want less of something, then you tax it. . . . Clearly it’s in our interest to move away from carbon.”
We simply need conscientious Republicans and Democrats to work together, in good faith, on a platform of fact and common sense. We know it can be done, because it’s been done.
At the end of a speech about the American Revolution, the historian David McCullough was asked why it was that our Founding Fathers had the courage to pledge their lives, their fortunes, and their sacred honor to the cause of independence. He answered simply: “It was a courageous time.”
In courageous times, Americans have done far more than stand up to polluters to serve this Great Republic. It only takes courage to make this a courageous time, too.
I yield the floor. READ MORE