Democratic senators: Carbon tax worth $2.1T in added U.S. revenue

By Beixi Xu, Medill News   |   July 27, 2017 at 5:26 PM
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Two Democratic senators said Wednesday they don't yet have Republican support for a new bill to tax carbon emissions, and have asked a conservative group to help them find the support.

Sens. Sheldon Whitehouse of Rhode Island and Brian Schatz of Hawaii told an audience at the American Enterprise Institute the bill would raise $2.1 trillion in federal revenue over 10 years by requiring companies to pay $49 per ton of carbon emissions next year, a figure that would increase annually.

"The idea is quite simple: Unleash markets to tackle climate change," said Schatz. "It establishes incentives that allow capital to flow and businesses to thrive when they can use clean energy, letting the free market compete and innovate and make profits."

The carbon tax would cut CO2 emissions 36 percent below 2005 levels by 2025.

"Climate change is real and urgent," said Whitehouse. "This carbon fee would produce meaningful reductions in emissions."

A number of companies like BP, Royal Dutch Shell, PepsiCo and Walmart had backed the carbon taxes plan in February. The senators said large companies could be the game-changer to sway some Republicans to support their plan.

Several Republicans and business leaders -- including former Treasury Secretaries Hank Paulson and James Baker -- are said to have met with some of President Donald Trump's top advisers at the White House in February to push the plan, even before the bill was drafted.

Last year, then-candidate Trump and a majority of the House opposed the same tax when it was proposed. With a 237-163 vote, the GOP lawmakers said such a tax would be harmful to American families and businesses, and would not be in the best interest of the United States.

The concept also runs contrary to Trump's promises to help bring back coal-mining jobs.

"Sen. Schatz and I extend an open hand -- an olive branch. Find Sen. Schatz and me a Republican to negotiate with. Then, let's talk about the economics, let's talk about the revenue," Whitehouse said.

Schatz said carbon taxes could be the source of revenue that Republicans need to implement their goals for tax reform.

"Let's restart the bipartisan conversation," said Whitehouse.

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