Energy Innovation and Carbon Dividend Act

Laser Talk

This page was updated on 12/05/18 at 11:50 CST.

Question:  What’s in the bill?

Answer: H.R.7173, the Energy Innovation and Carbon Dividend Act of 2018, is the first bipartisan climate legislation introduced in a decade. [1] It’s based on a plan developed by CCL to account for the costs of burning fossil fuels. If enacted into law, this policy will drive down America’s carbon pollution and bring climate change under control by means of American technology, innovation, and ingenuity. Climate scientists and economists alike say it represents the best first step to reduce the impact of global warming.

Here’s how it works:

• A carbon fee is placed on coal, oil, or natural gas shortly after it leaves the ground.
• The fee starts at $15 per metric ton of CO₂ potential and increases by $10 each year thereafter.
• If emission cuts don’t meet scheduled targets, the annual increase can be raised to $15.
• All of the money is recycled to American residents as carbon dividends. Low- and middle-income Americans – about two-thirds in all – will get more money back than they pay in higher prices.
• A carbon border fee adjustment is placed on carbon-intensive goods that are imported or exported – modified for countries that have their own carbon prices. This discourages businesses from relocating to where they can pollute more, and encourages other nations to price carbon.
• There’s a moratorium on redundant federal greenhouse gas regulations, but that restriction is lifted after 10 years if emissions targets have not been met. There’s no effect on any other air pollution rules, auto mileage standards, appliance efficiency, methane leakage from wells, etc.

A predictably increasing carbon price will stimulate invention and investment in the new clean-energy economy, while ensuring that every American has the means to weather the transition and participate in putting solutions to work.

Related: Comparing H.R.7173 with Carbon Fee and Dividend