Comparing H.R.763 with Carbon Fee and Dividend

Laser Talk

This page was updated on 01/31/19 at 22:42 CST.

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

Answer:  H.R.763, the Energy Innovation and Carbon Dividend Act of 2019 [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 exempts fuels used by the U.S. Armed Forces, which account for about 0.6 percent of U.S. emissions. [3,4]
  • 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. [5] It also leaves in place the EPA program to reduce methane leakage from oil and gas operations. [6] 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. 763 and the Carbon Fee and Dividend, which are detailed elsewhere. [7] 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.

  1. H.R.763 – Energy Innovation and Carbon Dividend Act of 2019. Congress.gov (24 Jan 2019).
  2. “Fast Facts: U.S. Transportation Sector Greenhouse Gas Emissions 1990-2015.” U.S. EPA Office of Transportation Air Quality. Report No. EPA-420-F-17-013 (Jul 2017). Calculation based on “U.S. Non-Transportation Mobile GHG Emissions – Agricultural Equipment, 2015,” p. 2.
  3. “Fiscal Year 2017 Operational Energy Annual Report.” Office of the Under Secretary of Defense for
    Acquisition and Sustainment (July 2018).
  4. “Department of Defense Annual Energy Management and Resilience (AEMR) Report Fiscal Year 2016.” Office of the Assistant Secretary of Defense for Energy, Installations, and Environment (July 2017).
  5. “Corporate Average Fuel Economy.” U.S. Department of Transportation, National Highway Traffic Safety Administration (accessed 4 Dec 2018).
  6. Tsang, L. “EPA’s Methane Regulations: Legal Overview.” Congressional Research Service (24 Jan 2018).
  7. “Questions and Answers about the Energy Innovation and Carbon Dividend Act.” FAQ on CCL Community (updated as needed).

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