Say What about a Carbon Tax?

October 24, 2018

Print This Article Share it With Friends

by Kelsey Tamborrino (Politico's Morning Energy) Transportation Secretary Elaine Chao was also at the White House Tuesday, where she suggested that Democrats in the House want to link a carbon tax to an infrastructure bill being developed, Pro Transportation's Sam Mintz reports . When it comes to infrastructure, "there are many, many pay-fors, but none of them have consensus. For this administration, everything is on the table. But we're talking about gas taxes. The Democrats are talking about carbon taxes," Chao said. Count ME skeptical: Asked about Chao's comments, House Democratic aides said a carbon tax hasn't been part of their infrastructure plan, either formally or informally. READ MORE

Carbon Tax for Non-Renewable Fuels (Advanced Biofuels USA)

CANADA COMMITS TO CARBON TAX: (Politico's Morning Energy)

How Lessons from Business Can Help Canada’s Climate Agenda (Ethanol Producer Magazine)

UPDATE 2-Canada's Trudeau vows to impose carbon tax, opponents push back (Reuters)

YARMUTH'S BUDGET VISION: (Politico's Morning Energy)

CARBON? YES, BUT … (Globe and Mail)

GAVEL GAZING: (Politico's Morning Energy)

NOT GIVING UP: (Politico's Morning Energy)

Excerpt from Politico's Morning Energy: The United States' neighbor to the North announced four provinces on Tuesday that will be subject to a federal carbon tax plan. Ontario, Saskatchewan, Manitoba and New Brunswick were identified by Prime Minister Justin Trudeau as the four that have declined to put forward their own strategies to price the pollution that warms the planet, Pro Canada's Lauren Gardner reports. The government will send a "climate action incentive" directly to Canadian citizens "to help them adjust to an economy where pollution is no longer free," Trudeau said. READ MORE

Excerpt from Ethanol Producer Magazine: Nearly three years into its mandate, the Trudeau government is rounding the corner on reaching some of the key priorities of its climate agenda. The federal carbon pricing system will apply on Jan. 1 in each province or territory that requests it, and in any jurisdiction that does not have a carbon pricing system that meets the federal benchmark. For the Clean Fuel Standard, proposed regulations regarding liquid fuels are expected in spring 2019 and final regulations in 2020, with requirements coming into force by 2022. For gaseous and solid fuels, proposed regulations will come in fall 2020 and final regulations in 2021, with requirements coming into force by 2023.

The stakes are high—for the government, the climate, and Canada’s domestic ethanol producers. For example, of the CFS’s 30 megatonne greenhouse gas reduction target, ethanol alone can deliver up to 15 megatonnes should the policy optimize ethanol’s potential.

Progress is being made but the transition to low carbon fuels is complex. Understandably, the government has relied on extensive consultations and stakeholder engagement as part of its policy design process. Renewable Industries Canada (RICanada) thinks productive consultations are essential for policies like the CFS to execute and deliver. And everyone at the proverbial table has to come forward with solutions.

Industry, such as the businesses represented by RICanada, needs to share its practical understanding of what it takes to compete, grow market share and effectively deliver goods and services to consumers. For its part, the government should design policies that help keep that marketplace competitive and responsible. It’s a healthy balance and an important relationship, and one RICanada’s founding member companies are proud to be part of.

As private sector companies, RICanada’s founding ethanol members (Greenfield Global and IGPC Inc.) are already taking it upon themselves to find ways to make their ethanol less carbon-intensive on a life cycle basis by reusing and selling the carbon dioxide (CO2) the plants produce, among other efforts.

One example is partnerships to sell the CO2 from the fermentation process to other companies, allowing it to be reused instead of going to waste. Some of it is sold for use in other industrial processes or even in the food and flavor market in carbonated drinks. This helps ensure every step of the biofuel production process is the least carbon-intensive possible. Greenfield Global, in collaboration with municipal partners, has developed a large-scale anaerobic digester adjacent to its Varennes ethanol plant to convert organic waste into biogas (methane and CO2). The biogas is piped into Greenfield’s ethanol plant, significantly lowering the carbon intensity of the ethanol produced. These are just some examples of how the private sector is already thinking of economically viable solutions that better the health of the planet and work for their businesses.

The benefits of biofuels to the Canadian economy are real. The biofuels industry contributes $3.5 billion each year and creates approximately 14,000 direct and indirect jobs in the country and more than 1,000 direct and indirect jobs annually. The benefits of the CFS are also poised to be real. The CFS can be an opportunity to harness the expertise of business leaders, who successfully built Canada’s renewable fuels industry, to develop policy solutions that will work for both the economy and the environment.

The relationship between business and government works best when economic enterprise and public policy collaborate. As the government reaches this pivotal time for implementing the CFS and other carbon-based policies, the perspective of renewable fuel producers and clean tech businesses can be especially useful. After all, RICanada’s member companies prove that climate policy doesn’t need to be the economy versus the environment when ethanol is part of the mix. READ MORE

Excerpt from Politico's Morning Energy: If Democrats win the House next week, Rep. John Yarmuth would likely take control of the Budget Committee, and in an interview with Pro's Jennifer Scholtes the Kentucky Democrat laid out how he'd remake the mission of the panel. "Our plans are to kind of reimagine it as the oversight committee on the budget," he said in a Q-and-A. "So we would have hearings, for instance, on climate change and how it affects the budget, immigration and how it affects the budget."

Asked about Transportation Secretary Elaine Chao's comments that the White House is considering an increase in the gas tax as an infrastructure pay-for, Yarmuth said he has a proposal on tap involving "some very long-term bonding authority that would help finance an infrastructure bank."

"You can raise revenue [with a gas tax]. But it's going to be an increasingly ineffective way to fund infrastructure, with better gas mileage and electric cars and all that. I don't think anybody thinks that's the answer. But it could be a revenue-raiser," he said. "I imagine a carbon tax will be discussed. I don't have a feel for where the caucus would be on that. But I think it certainly would be brought up." READ MORE

Excerpt from Politico's Morning Energy: Republican Rep. Jeff Denham — if he pulls off a win in a tough reelection race in California — would face Rep. Sam Graves for the chance to grab the Transportation Committee gavel, or the ranking member slot if the House flips. Pro Transportation's Sam Mintz reports that despite subtle differences, the two men are largely aligned on the shift away from a gasoline tax. Instead, they both point toward a vehicle-miles-traveled fee, though Graves has been more outspoken in support of the idea. "VMT is the best way to capture all of the users out there, which gets to the funding we need to fix our roads and bridges and allow this to look forward to those transformative projects," Graves told POLITICO, although he said that all ideas are on the table, including increasing the gas tax, tolling or creating a tire tax. READ MORE

Excerpt from Politico's Morning Energy: NOT GIVING UP: Climate Solutions Caucus co-founder Ted Deutch told ME he's not giving up on working with Republicans on climate issues despite the loss of his fellow co-founder, Rep. Carlos Curbelo. "I continue to believe that Congress must consider all possibilities for addressing climate change, including carbon pricing and investments in alternative energy sources," he said in a statement. "I'll continue to work with and find partners across the aisle to achieve bipartisan approaches to addressing climate change." READ MORE