Comparing H.R.7173 with Carbon Fee and Dividend

Laser Talk

This page was updated on 12/05/18 at 11:58 CST.

Question:  How does the Energy Innovation and Carbon Dividend Act differ from Carbon Fee and Dividend?

Answer:  H.R.7173, the Energy Innovation and Carbon Dividend Act of 2018 [1] is very similar to CCL’s Carbon Fee and Dividend.

• This bill follows CCL’s proposed Fee schedule, starting at $15 per metric ton of CO₂ equivalent emissions and increasing by $10 per metric ton each year. It continues until emissions drop by 90 percent.
• It affects all fossil fuels and requires accounting for upstream emissions. Besides CO₂, it covers other GHG emissions including fluorinated gases.
• All net revenue are recycled to U.S. households as a monthly Carbon Dividend. It includes a Border Carbon Adjustment similar to the one in CCL’s proposal.

As expected for any bill that can win enough support to pass Congress, there are also some differences.

• The bill includes a refund for safe, permanent CO₂ capture and sequestration.
• All children in a household are eligible for a Dividend.
• It exempts fuels used in farm machinery, which account for only about 0.7 percent of U.S. emissions. [2]
• It limits EPA authority over GHG emissions as long as the carbon fee is in place, but doesn’t touch other regulations on air and water pollution, nor does it impede the CAFE fuel-efficiency rules for vehicles. [3] It also leaves in place the EPA program to reduce methane leakage from oil and gas operations. [4] EPA authority to regulate CO₂ as a pollutant remains intact as a backstop, and would be re-activated if the bill’s emissions targets are not met in 10 years.

There are other minor differences between H.R. 7173 and the Carbon Fee and Dividend, which are detailed elsewhere. [5] Overall, this legislation fulfills the climate change mitigation goals toward which CCL has been working since our founding in 2007, and merits our enthusiastic support.

Related: Energy Innovation and Carbon Dividend Act.