Senate Passes Bill Blocking A Carbon Tax

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Michael Bastasch DCNF Managing Editor
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Senate lawmakers passed an amendment Thursday that would block the federal government from taxing carbon dioxide emissions, a popular idea among Democrats to fight global warming.

Four Democrats joined Senate Republicans in backing the amendment to the 2016 budget bill introduced by Sen. Roy Blunt, a Missouri Republican. The amendment would create a reserve fund that would prevent the government from taxing carbon emissions from emitting entities, like power plants or refineries.

“Once again, a majority of Congress has spoken out against a carbon tax,” Oklahoma Sen. Jim Inhofe, chairman of the Environment and Public Works Committee, said in a statement after the vote.

“The only Americans that stand to benefit from the federal government imposing policies that unilaterally tax or otherwise restrict domestic carbon emissions are green energy venture capitalists and major political contributors to Democratic campaigns,” Inhofe said.

The amendment passed 58 to 42 over objections from Democratic lawmakers who argued that taxing carbon emissions would be good for the economy and the environment.

“When you put a price on carbon it works,” California Sen. Barbara Boxer, the ranking Democrat on EPW, said before the vote. “If you look at my state, we are creating jobs in clean energy, we’re balancing our budget better than we ever have before. … So I don’t know why on earth we would say ‘no’ to something that leads to prosperity.”

Since the failure of the 2009 cap-and-trade bill in the Senate, Democrats have been pushing a carbon tax as an alternative policy to fighting global warming. While cap-and-trade would rely on trading permits which would fluctuate in price, a carbon tax would impose an ever-increasing price per ton of CO2 emitted.

Last November, Democratic Sens. Sheldon Whitehouse of Rhode Island and Brian Schatz of Hawaii introduced a bill that would slap a $42 per ton tax on carbon dioxide emissions that would rise 2 percent each year. Lawmakers said their bill would raise $2 trillion.

On the state level, Washington Gov. Jay Inslee, a Democrat, imposed his own cap-and-trade program along with a low-carbon fuel standard. Inslee’s office says the regulations would raise $1 billion in the first year, but that would come at the cost of about $130 to $131 to reduce one ton of carbon dioxide emissions. That would increase gasoline prices by $1.17 per gallon.

Many Republicans have pointed to Australia’s recent experience with the carbon tax. The country repealed the tax after only about two years as residents and businesses were hit by higher energy costs and rising joblessness.

In fact, Prime Minister Tony Abbott’s conservative governing coalition was elected to office in a landslide victory in 2013. One of the main planks of Abbott’s campaign was to repeal the carbon tax.

“The carbon tax is bad for the economy and it doesn’t do any good for the environment,” Abbott told The Washington Post. “Despite a carbon tax of $37 a ton by 2020, Australia’s domestic emissions were going up, not down. The carbon tax was basically socialism masquerading as environmentalism, and that’s why it’s going to get abolished.”

The Aussie carbon tax cost about $7 billion for just the first 15 months, but did little, if anything, to lower the country’s carbon footprint. Billions of dollars later, the tax had only lowered emissions by 0.3 percent. This emissions reduction came out to $300 per Aussie.

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