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Environment & Energy Report

Climate Activists Lobby Congress on Carbon Tax, Coal Town Relief (1)

June 18, 2020, 7:42 PMUpdated: June 18, 2020, 8:42 PM

Climate activists are storming Congress this week, holding online meetings with more than 400 House and Senate lawmakers to press for a carbon tax and economic relief for hard-hit coal communities.

The central pillar of the carbon tax push, the Energy Innovation and Carbon Dividend Act (H.R. 763), hasn’t drawn much Republican support. Among the bill’s 80 cosponsors, only one is a Republican—Rep. Francis Rooney (R-Fla.), who is retiring.

But this time, the members of the Citizens’ Climate Lobby are bringing a new message: that a carbon tax could bring in new sources of revenue at a time when the federal deficit has soared to nearly $2 trillion, driven by the government’s response to the coronavirus pandemic.

“When we come out and look for solutions to addressing climate, there might not be a lot of money to spend,” said Ben Pendergrass, senior director of government affairs at the Citizens’ Climate Lobby. “But a carbon price doesn’t cost the government anything.”

Generating Revenue

H.R. 763 could generate between $72 billion and $75 billion in revenue in 2020, and $403 billion to $422 billion in 2030, according to a 2019 study by Columbia University’s Center on Global Energy Policy. The bill would impose an initial $15 per ton fee on the carbon content of fuels including crude oil, natural gas, and coal. The tax would increase at a rate of $10 per ton per year.

The group wants the revenue be returned to Americans as a monthly dividend.

The Citizens’ Climate Lobby faces an even tougher challenge in the Republican-controlled Senate. Sen. John Barrasso (R-Wyo.), chair of the Senate Environment and Public Works Committee, “strongly opposes a carbon tax,” said Mike Danylak, spokesman for the Republican majority on the panel.

But Alex Flint, executive director of the Alliance for Market Solutions and a former member of President Donald Trump’s transition team, said there’s at least the glimmering of a path forward, because denial about climate science “has left the Republican Party.”

Carbon tax advocates also hope to lay the groundwork should Democrats take control of the Senate in the November elections.

A spokeswoman for Sen. Chris Coons (D-Del.) said the bipartisan Climate Solutions Caucus, on which Coons is a co-chairman, “is aware that putting a price on carbon is a policy lever for addressing climate change and they are discussing and learning about as many policy options as they can.”

Push for Coal Communities

The climate lobbyists are also asking senators this week to support the RECLAIM (Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More) Act (S. 1232), which would unlock $1 billion in already-collected funds to coal states over five years for mine cleanup.

Because the bill prioritizes reclamation projects that boost local economies, such as agriculture, renewable energy, and tourism, the lobbyists see it as potentially more attractive to Senate lawmakers.

“Coal communities were already suffering” before the pandemic hit, Pendergrass said. “But with the economic downturn, they were hit even harder, because the acceleration of coal’s decline has increased.”

A House version (H.R. 2156) passed the lower chamber last May, but its future in the Republican-controlled Senate is uncertain, in part because the National Mining Association opposes it.

The association has argued that the federal tax on coal production, which is where the $1 billion was generated, should be either eliminated or drastically revamped. In the trade group’s view, not enough of the Abandoned Mine Land fund money has been used for its intended purpose—to clean up high-priority old mines.

On Wednesday, Barrasso and Sen. Mike Enzi (R-Wyo.) introduced a bill that would reauthorize the fee until 2028, but lower the per-ton Abandoned Mine Land fee for all categories of coal by 35%. The Citizens’ Climate Lobby doesn’t yet have a position on that legislation, Pendergrass said.

(Updates with comment from Sen. Chris Coons spokeswoman in 10th paragraph.)

To contact the reporters on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com; Dean Scott in Washington at dscott@bloombergindustry.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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