Stark Introduces Carbon Tax Bill to Reduce Emissions, Deficit
CBO Says Carbon Tax is Most Economically Efficient Way to Cut Carbon Emissions
WASHINGTON - Today, Congressman Stark (D-CA) announced the introduction of the Save Our Climate Act, H.R. 3242. This legislation would levy a carbon tax on fossil fuels in order to reduce our dependence on foreign oil, spur development of alternative energy, protect consumers from rising energy costs, mitigate climate change, and reduce our deficit.
The Carbon Tax Center estimates that over 10 years, the Save our Climate Act would raise more than $2.6 trillion in revenue and reduce carbon emissions by 25 percent. Over several decades, the legislation will reduce the United States' carbon emissions to 80 percent below the country's emissions levels in 1990, which is the level scientists say must be achieved to stabilize our climate.
"We have a moral obligation to act to prevent catastrophic climate change and preserve our planet for future generations," said Rep. Pete Stark. "The Save Our Climate Act is a first step toward meeting that obligation and creating a sensible tax code that incentivizes innovation, reduces the deficit, and protects families from rising energy costs."
How SOCA Works: The Carbon Tax would be similar to a sales tax levied on producers of fossil fuels at the first point of sale. For example, an importer or manufacturer that buys or imports coal, natural gas, or oil would pay a fee based on that fossil fuel's carbon dioxide content. The SOCA dedicates $490 billion toward deficit reduction over 10 years and distributes over $2 trillion in revenue back to consumers.
"Rep. Stark's bill dispels the fog that has enveloped climate policy by relying on price incentives and American ingenuity rather than caps or coercion," said Charles Komanoff, energy economist and director of the Carbon Tax Center. "The Save Our Climate Act picks no favorites, sets no artificial caps, and has no rigged trading system. Polluters will lose and middle-class families will win."
What SOCA Costs Purchasers: The tax would begin at $10 per ton of carbon dioxide content and would increase by $10 per ton each year until the United States reaches the carbon emissions goal.
“We’re running out of time to wean our nation off the fossil fuels that are heating up the planet,” said Citizens Climate Lobby Executive Director Mark Reynolds. “We need to put a price on carbon that shifts energy usage to clean sources, and that’s what Congressman Stark’s bill does.”
How SOCA Protects the Middle Class and U.S. Businesses: The majority of the revenue raised would be paid in a dividend to individuals in order to offset increased fuel and energy prices. The Carbon Tax Center projects that the second year after implementation, the average dividend would be $160 per person. This would rise to $590 in year five and $1,170 in year ten. In order to ensure that American businesses are not put at a disadvantage by the carbon tax, foreign companies selling carbon intensive goods in the U.S would also pay the carbon tax when their goods are imported into the country. Additionally, American companies that export carbon-based goods would have the carbon tax refunded.
“Our country is not broke and we should not be cutting teachers or delaying smog rules; we simply need banks and corporate polluters to pay their fair share," said Erich Pica, President of Friends of the Earth. "By introducing a financial transaction tax, and now a carbon tax, Representative Stark has taken the lead on reducing the deficit and strengthening our country.”
Why SOCA is preferable to a Cap and Trade System or EPA regulation:
• According to the Congressional Budget Office, a carbon tax is the most economically efficient option for reducing carbon emissions.
• Unlike a carbon tax, cap and trade would create more bureaucracy and require considerable revenue to administer. A carbon tax provides market incentives to reduce emissions and does not require business to engage in a complex permitting process, unlike regulating CO2 through the Clean Air Act.
• Under cap and trade, carbon prices are dictated by a volatile trading market; European carbon markets have experienced wild swings. Such price volatility hurts consumers and discourages investment in alternative energy sources. This is would not be the case with a carbon tax.
• Cap and trade systems require huge new markets that are susceptible to speculation. A carbon tax cannot be gamed and does not require a new trading market.
• Unlike with cap and trade, carbon tax revenue can easily be returned to the public through a dividend.
For a list of those who have voiced support for creating a tax on carbon, visit the Carbon Tax Center website.
NEWS – CONGRESSMAN PETE STARK
239 Cannon House Office Building
Washington, DC 20515