Republicans Move to Kill Carbon Tax Before It Gains Any Momentum

(Bloomberg) -- A new, Republican-led effort to tax carbon dioxide emissions isn’t likely to make it to a vote in the House of Representatives anytime soon -- but opponents aren’t taking any chances.

The House voted 229-180 Thursday along mostly party lines to pass a resolution condemning the very idea of a carbon tax as “detrimental” to the U.S. economy. The measure, advanced by Majority Whip Steve Scalise, a Republican from Louisiana, won the support of seven Democrats. Six Republicans broke ranks to vote against the resolution, and two lawmakers dodged declaring a position by voting present.

The resolution vote was aimed at undercutting growing momentum for imposing a tax on the carbon dioxide emissions that drive climate change.

Prominent conservatives, including former Secretary of State James Baker and former Treasury Secretary Hank Paulson have advanced a plan to tax carbon dioxide and redistribute the revenue to households in the form of quarterly dividend checks. Veteran GOP political operatives are running a new campaign to buttress the idea, using funding from nuclear power generator Exelon Corp. and renewable manufacturer First Solar Inc.

And Republican Representative Carlos Curbelo from Florida, the co-chairman of the House Climate Solutions Caucus, is preparing to introduce legislation as soon as Monday that would impose a carbon tax on oil refiners, gas processors and coal miners.

Carbon tax proposals have never made it very far in Washington, but Scalise’s measure was designed to cut off these latest efforts at the knees. Thursday’s House passage of his anti-tax resolution locked in votes against the idea, weakens the ability of lawmakers to later change their minds and symbolically declares the Republican establishment’s opposition to the approach.

“It sends a strong signal to voters about where a member stands on the creation of a massive new energy tax,” said Paul Blair, director of strategic initiatives for Americans for Tax Reform, the conservative advocacy group led by Grover Norquist.

The group has warned lawmakers that “new energy taxes are political losers” that “will get you unelected,” Blair said. “Innovation and the free market has already made the U.S. a leader in reductions without absurd new taxes on American companies, manufacturers and consumers.”

Non-binding

The House passed an identical non-binding resolution two years ago declaring that "a carbon tax would be detrimental to American families and businesses and is not in the best interest of the United States." Every Republican who voted supported the measure.

This time, six Republicans strayed from the party line, including moderates facing tough re-election contests and GOP members of the climate caucus: representatives Curbelo; Brian Fitzpatrick of Pennsylvania; Trey Hollingsworth of Indiana; Mia Love of Utah; and Francis Rooney and Ileana Ros-Lehtinen, both of Florida.

Curbelo is preparing to introduce the first GOP-sponsored legislation proposing a cap or tax on carbon dioxide since 2009.

According to a bill summary that was obtained by Bloomberg, the measure would force oil refiners and coal miners to pay a $23 tax on every metric ton of carbon dioxide -- and in exchange end the gasoline tax and temporarily pause regulations on some greenhouse gas emissions.

Curbelo is developing “an innovative solution” to address carbon dioxide emissions and climate change, but the details are not finalized and the circulated summary is “not an accurate representation of the plan," said the lawmaker’s spokeswoman, Joanna Rodriguez.

“Breaking a decade-long drought from one of our two major political parties on carbon pricing or carbon taxing is no small thing,” said Charles Komanoff, director of the Carbon Tax Center, which supports taxing greenhouse gas emissions.

The Curbelo bill is not slated to be taken up by House Republican leaders anytime soon and would probably be defeated if it did. But supporters say the measure has the potential to trigger an elevated discussion on carbon pricing. It also could illustrate movement on the issue, possibly helping to appease activists frustrated with a lack of progress.

Curbelo’s bill could aid the broader, long-term push to put a price on carbon dioxide emissions, said Joseph Majkut, with the libertarian Niskanen Center.

Climate Policy

“We’ve waited for years for Republicans to see the merits of carbon pricing and to develop their own ideas for how it can move forward,” said Majkut, the center’s director of climate policy. “The more specific plans we see, the more other members of the Republican coalition can learn about all that a properly designed carbon tax bill can do in terms of raising revenue, fairly treating an industry in transition and efficiently reducing greenhouse gas emissions.”

Conservatives on both sides of the carbon tax issue besieged lawmakers ahead of the vote, arming them with talking points, surveys and studies. Forty-one conservative groups, including the American Energy Alliance, ALEC Action and the Club for Growth sent a letter to lawmakers insisting that any carbon tax “would lead to less income and fewer jobs for American families.”

Meanwhile Eli Lehrer, president of the R Street Institute, former South Carolina Republican Representative Bob Inglis and others insisted Congress shouldn’t shut the door now to any carbon tax -- especially those that could take the place of existing, costly environmental regulations. “We recognize that a carbon tax, like any tax, will impose economic costs,” they said. “But climate change is also imposing economic costs.”

©2018 Bloomberg L.P.