Market-Based Greenhouse Gas Emission Reduction Legislation: 108th through 116th Congresses

Congressional interest in market-based greenhouse gas (GHG) emission control legislation has fluctuated over the past 15 years. During that time, legislation has often involved market-based approaches, such as a cap-and-trade system or a carbon tax or emissions fee program. Both approaches would place a price—directly or indirectly—on GHG emissions or their inputs, namely fossil fuels. Both would increase the price of fossil fuels, and both would reduce GHG emissions to some degree. Both would allow emission sources to choose the best way to meet their emission requirements or reduce costs, potentially by using market forces to minimize national costs of emission reductions. Preference between the two approaches ultimately depends on which variable policymakers prefer to precisely control—emission levels or emission prices.

A primary policy concern with either approach is the economic impacts that may result. Expected energy price increases could have both economy-wide impacts (e.g., on the U.S. gross domestic product) and disproportionate effects on specific industries and particular demographic groups. The degree of these potential effects would depend on a number of factors, including the magnitude, design, and scope of the program and the use of tax or fee revenues or emission allowance values.

As the figure below illustrates, between the 108th and 111th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112th and 115th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs. Most of the proposals from the 116th Congress would establish a carbon tax or emissions fee program. The proposals range in the scope of emissions covered from CO2 emissions from fossil fuel combustion to multiple GHG emissions from a broader array of sources. In addition, the proposals differ by how, to whom, and for what purpose the fee revenues or allowance value would be applied. Some economic analyses indicate that policy choices to distribute the tax, fee, or emission allowance revenue would yield greater economic impacts than the direct impacts of the carbon price.

Figure 1.Number and Type of Introduced GHG Emission Reduction Bills

108th Congress through 116th Congress

/

Source: Prepared by CRS.

Notes: “Other Approaches” include (1) proposals that did not specify the overall framework but would have authorized EPA to establish a GHG emission reduction program and (2) proposals that combine elements from a cap-and-trade system with price control features in a carbon tax or emissions fee system, sometimes described as hybrid approaches.

This report includes a separate table for each Congress, comparing GHG emission reduction legislation by the following characteristics:

General framework: the proposed program structure and scope in terms of emissions covered, multiple GHG emissions, or just carbon dioxide (CO2) emissions.

Covered entities/materials: a list of the industries, sectors, or materials that would be subject to the program.

Emissions limit or target: the GHG or CO2 emissions target or cap for a specified year.

Distribution of allowance value or tax revenue: how emission allowance value or carbon tax or fee revenue would be distributed.

Offset and international allowance treatment: the degree to which offsets and international allowances could be used for compliance purposes and the types of offset activities that would qualify.

Mechanism to address carbon-intensive imports: a U.S. GHG reduction program may create a competitive disadvantage for some domestic businesses, particularly carbon-intensive, trade-exposed industries.

Additional GHG reduction measures: other mechanisms designed to further reduce GHG emissions that are not covered in the central program.

Market-Based Greenhouse Gas Emission Reduction Legislation: 108th through 116th Congresses

Updated January 29, 2020 (R45472)
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Contents

Summary

Congressional interest in market-based greenhouse gas (GHG) emission control legislation has fluctuated over the past 15 years. During that time, legislation has often involved market-based approaches, such as a cap-and-trade system or a carbon tax or emissions fee program. Both approaches would place a price—directly or indirectly—on GHG emissions or their inputs, namely fossil fuels. Both would increase the price of fossil fuels, and both would reduce GHG emissions to some degree. Both would allow emission sources to choose the best way to meet their emission requirements or reduce costs, potentially by using market forces to minimize national costs of emission reductions. Preference between the two approaches ultimately depends on which variable policymakers prefer to precisely control—emission levels or emission prices.

A primary policy concern with either approach is the economic impacts that may result. Expected energy price increases could have both economy-wide impacts (e.g., on the U.S. gross domestic product) and disproportionate effects on specific industries and particular demographic groups. The degree of these potential effects would depend on a number of factors, including the magnitude, design, and scope of the program and the use of tax or fee revenues or emission allowance values.

As the figure below illustrates, between the 108th and 111th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112th and 115th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs. Most of the proposals from the 116th Congress would establish a carbon tax or emissions fee program. The proposals range in the scope of emissions covered from CO2 emissions from fossil fuel combustion to multiple GHG emissions from a broader array of sources. In addition, the proposals differ by how, to whom, and for what purpose the fee revenues or allowance value would be applied. Some economic analyses indicate that policy choices to distribute the tax, fee, or emission allowance revenue would yield greater economic impacts than the direct impacts of the carbon price.

Figure 1.Number and Type of Introduced GHG Emission Reduction Bills

108th Congress through 116th Congress

Source: Prepared by CRS.

Notes: "Other Approaches" include (1) proposals that did not specify the overall framework but would have authorized EPA to establish a GHG emission reduction program and (2) proposals that combine elements from a cap-and-trade system with price control features in a carbon tax or emissions fee system, sometimes described as hybrid approaches.

This report includes a separate table for each Congress, comparing GHG emission reduction legislation by the following characteristics:

  • General framework: the proposed program structure and scope in terms of emissions covered, multiple GHG emissions, or just carbon dioxide (CO2) emissions.
  • Covered entities/materials: a list of the industries, sectors, or materials that would be subject to the program.
  • Emissions limit or target: the GHG or CO2 emissions target or cap for a specified year.
  • Distribution of allowance value or tax revenue: how emission allowance value or carbon tax or fee revenue would be distributed.
  • Offset and international allowance treatment: the degree to which offsets and international allowances could be used for compliance purposes and the types of offset activities that would qualify.
  • Mechanism to address carbon-intensive imports: a U.S. GHG reduction program may create a competitive disadvantage for some domestic businesses, particularly carbon-intensive, trade-exposed industries.
  • Additional GHG reduction measures: other mechanisms designed to further reduce GHG emissions that are not covered in the central program.


Introduction

Human activities, particularly fossil fuel combustion and industrial operations, have raised the atmospheric concentration of carbon dioxide (CO2) and other greenhouse gases (GHGs)1 by about 40% over the past 150 years. Almost all climate scientists agree that these GHG increases have contributed to a warmer climate today and that, if they continue, they will contribute to future climate change.2 Although a range of actions that seek to reduce GHG emissions are currently underway or being developed on the international3 and subnational level (e.g., individual state actions or regional partnerships),4 federal policymakers and stakeholders have different viewpoints over what to do, if anything, about future climate change and related impacts.

Congressional interest in GHG emission control legislation has fluctuated over the last 15 years. Proposals to limit GHG emissions have often focused on market-based approaches, such as a GHG emission cap-and-trade program or a GHG emissions tax (often referred to as a carbon tax) or fee.5 In general, a market-based approach would place a price on GHG emissions (e.g., through an emissions cap or emission tax or fee), allowing covered entities to determine their pathway of compliance.6

This report provides a comparison of the legislative proposals from the 108th through the 116th Congresses that were and are designed primarily to reduce GHG emissions using market-based approaches such as cap-and-trade or carbon tax/fee programs. During this time frame, Members introduced multiple energy-related proposals that would have likely resulted in reductions in GHG emissions—legislation that promotes renewable energy7 or encourages carbon capture and sequestration8—but these bills are not discussed in this report.

In addition, starting in the 112th Congress, some Members have introduced resolutions in the House and Senate expressing the view that a carbon tax is not in the economic interests of the United States. In September 2018, the House passed a resolution "expressing the sense of Congress that a carbon tax would be detrimental to the United States economy" (H.Con.Res. 119).9 An analogous resolution was not introduced in the Senate in the 115th Congress.

As Figure 1 illustrates, between the 108th and 111th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112th and 115th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs.

In the 111th Congress, Members offered multiple and varied proposals,10 ultimately resulting in the House passage of H.R. 2454, an economy-wide cap-and-trade bill.11 A companion bill in the Senate (S. 1733) was ordered reported from the Committee on Environment and Public Works, but the bill was never brought to the Senate floor for consideration.

In subsequent Congresses, some Members continued to offer GHG emission control legislation, but these proposals saw minimal legislative activity. During that time frame, the U.S. Environmental Protection Agency (EPA) used existing Clean Air Act authorities to promulgate GHG emission standards for key sectors, including the electric power and transportation sectors.12 EPA rulemakings in this area—particularly the 2015 Clean Power Plan final rule13 and the 2019 Affordable Clean Energy final rule14—continue to generate interest and debate in Congress.

The proposals from the 116th Congress range in their scope of emissions covered from CO2 emissions from fossil fuel combustion to multiple GHG emissions from a broader array of sources. In addition, the proposals differ by how, to whom, and for what purpose the fee revenues or allowance value would be applied. Some economic analyses indicate that policy choices to distribute the tax, fee, or emission allowance revenue would yield greater economic impacts than the direct impacts of the carbon price.

Figure 2. Number and Type of Market-Based GHG Emission Reduction Bills Introduced in 108th Congress through 116th Congress

Source: Prepared by CRS.

Notes: "Other Approaches" include (1) proposals that did not specify the overall framework but would have provided EPA with the authority to establish a GHG emission reduction program and (2) proposals that combine elements from a cap-and-trade system with price control features in a carbon tax or emissions fee system, sometimes described as hybrid approaches.

The first section of this report provides background information on cap-and-trade and carbon tax or emission fee programs. The second section compares the GHG emission reduction legislation in each Congress (108th-116th).

Background

Over the last 15 years, broad GHG emission reduction legislation has generally involved market-based approaches—such as cap-and-trade systems or carbon tax programs—that rely on private sector choices and market forces to minimize the costs of emission reductions and spur innovation.15 Both carbon tax and emissions cap-and-trade programs would place a price—directly or indirectly—on GHG emissions or their inputs (e.g., fossil fuels), both would increase the price of fossil fuels for the consumer, and both would reduce GHG emissions to some degree. Preference between the two approaches ultimately depends on which variable policymakers prefer to precisely control: emission levels or emission prices. As a practical matter, these market-based policies may include complementary or hybrid designs, incorporating elements to increase certainty in price or emissions quantity. For example, legislation could provide mechanisms for adjusting a carbon tax/fee if a targeted range of emissions reductions were not achieved in a given period. Alternatively, legislation could include mechanisms that would bound the range of market prices for a cap-and-trade system's emissions allowances to improve price certainty.

What Is a GHG Emissions Cap-and-Trade System?

A GHG cap-and-trade system creates an overall limit, or cap, on GHG emissions from certain sources. Cap-and-trade programs can vary by the sources covered, which often include major emitting sectors (e.g., power plants and carbon-intensive industries), fuel producers and/or processors (e.g., coal mines or petroleum refineries), or some combination of both.

The emissions cap is partitioned into emission allowances. Typically, in a GHG cap-and-trade system, one emission allowance represents the authority to emit one metric ton16 of carbon dioxide-equivalent (mtCO2e).17 The emissions cap creates a new commodity—the emission allowance. Policymakers may decide to distribute the emission allowances to covered entities at no cost (based on, for example, previous years' emissions), sell the allowances (e.g., through an auction), or use some combination of these strategies. The distribution of emission allowances is typically a source of significant debate during a cap-and-trade program's development, because the allowances have monetary value.

At the end of each established compliance period (e.g., a calendar year or multiple years), covered sources submit emission allowances to an implementing agency to cover the number of tons emitted. If a source did not provide enough allowances to cover its emissions, the source would be subject to penalties. Covered sources would have a financial incentive to make reductions beyond what is required, because they could (1) sell or trade unused emission allowances to entities that face higher costs to reduce their facility emissions, (2) reduce the number of emission allowance they need to purchase, or (3) bank them, if allowed, to use in a future year.

The use of emission offsets as a compliance option received attention during debate over cap-and-trade programs. An offset is a measurable reduction, avoidance, or sequestration of GHG emissions from a source not covered by an emission reduction program. Economic analyses of cap-and-trade proposals concluded that offset treatment (i.e., whether or not to allow their use and, if so, to what degree) would have a substantial impact on overall program cost. This is because some emissions and sources often not covered in cap-and-trade programs can reduce emissions at a lower cost per ton than many typically covered sources. However, the use of offsets generates considerable controversy, primarily over the concern that difficult-to-assess or fraudulent offsets could create uncertainty about the quantity of emission reductions.18

In addition, other mechanisms—such as allowance banking or borrowing—may be included to increase the flexibility of the program and, generally, reduce the costs.

What Is a Carbon Tax or Emissions Fee?

In a carbon tax or emissions fee program, policymakers attach a price to GHG emissions or the inputs that create them. A carbon tax/fee on emissions or emissions inputs—namely fossil fuels—would increase the relative price of the more carbon-intensive energy sources. This result is expected to spur innovation in less carbon-intensive technologies and stimulate other behavior that may decrease emissions.19

Economic modeling indicates that a carbon tax/fee approach could achieve emission reductions, the level of which would depend on the scope and stringency (i.e., tax or fee level) of the program.20 For example, to address emissions from fossil fuel combustion—76% of total U.S. GHG emissions21—policymakers could apply a tax/fee to fossil fuels at approximately 3,000 entities, including coal mines, petroleum refineries, and entities required to report natural gas deliveries.22

A carbon tax/fee would generate a new revenue stream. The magnitude of the revenues would depend on the scope and rate of the tax or fee, the responsiveness of covered entities in reducing their potential emissions, and multiple other market factors. A 2016 Congressional Budget Office study estimated that a $25/ton carbon tax would yield approximately $100 billion in the first year of the program.23

When designing a carbon tax/fee system, one of the more controversial and challenging questions for policymakers is how, to whom, and for what purpose the new tax or fee revenues could be applied. Congress would face the same issues that would be encountered during a debate over emission allowance value distribution in a cap-and-trade system.

When deciding how to allocate the revenues, policymakers would encounter trade-offs among objectives. The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups—particularly low-income households and displaced workers or communities—and supporting a range of specific policy objectives.

A primary argument against a carbon tax/fee system (and a cap-and-trade program) is the concern about the economy-wide costs that a carbon price could impose. The potential costs would depend on a number of factors, including the magnitude, design, and use of revenues of the carbon tax or fee.

Others who may oppose a carbon tax system express opposition to federal taxes in general or the possibility that the revenues would enable greater federal spending. Owners of coal resources, in particular, would likely lose asset values under a carbon tax system—as under a cap-and-trade system—to the degree that coal becomes less competitive under the costs of emission reductions.

GHG Emission Reduction Legislation by Congress

This section compares GHG emission reduction legislation from the 108th Congress to the 116th Congress by including a separate legislative table for each Congress.24 The tables compare the bills by their overall framework, scope, stringency, and selected design elements. Categories of comparison include

  • General framework: the proposed program structure—emissions cap, emissions tax or fee, or some combination of both—and scope in terms of emissions covered (multiple GHG emissions or just CO2 emissions).
  • Covered entities/materials: the industries, sectors, or materials that would be subject to the program.
  • Emissions limit or target: the GHG or CO2 emissions target or cap for a particular year. Some targets/caps would apply only to covered sources; others apply to total U.S. GHG emissions.
  • Distribution of allowance value or tax revenue: how emission allowance value or carbon tax or fee revenue would be distributed (if applicable).
  • Offset and international allowance treatment: the degree to which offsets and international allowances could be used for compliance purposes and the types of offset activities that would qualify. Some proposals limit offsets by percentage of required reductions; others limit offsets as a percentage of allowance submissions.
  • Mechanism to address carbon-intensive imports: a central concern with a U.S. GHG reduction program is that it could raise U.S. prices more than goods manufactured abroad, potentially creating a competitive disadvantage for some domestic businesses, particularly carbon-intensive, trade-exposed industries. Policymakers could address these potential impacts in several ways—for example, through border adjustments, tax rebates, or emission allowances provided at no cost to selected industrial sectors.
  • Additional GHG reduction measures: other mechanisms that are designed to further reduce GHG emissions that are not covered in the central program.

Table 1. GHG Emission Reduction Proposals: 108th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

S. 139
Lieberman
Jan. 9, 2003

Discharged by unanimous consent by the Senate Committee on Environment and Public Works on Oct. 29, 2003

S.Amdt. 2028, which contained similar provisions, was not agreed to on Oct. 30, 2003

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels), reduced by the level of emissions from non-covered sources; cap of 5,123 mtCO2e for covered sources by 2016 (equivalent to 1990 levels), reduced by the level of emissions from non-covered sources

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities

From 2010 through 2015, up to 15% of submitted allowances can come from domestic or international offsets; after 2015, 10% of submitted allowance can come from offsets

No specific provision

No specific provision

S. 366
Jeffords
Feb. 12, 2003

Cap-and-trade system for CO2 emissions from power plants; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities with a capacity of greater than 15 megawatts

Cap on electric power emissions of 2.05 billion metric tons in 2009 (equivalent to 1995 emissions)

EPA allocates free allowances to the following:

60% to households to alleviate increased electricity prices

6% for worker transition assistance

20% for renewable energy and energy efficiency

10% to electricity generation facilities

1% for forest sequestration

2% for geologic sequestration

No specific provision

No specific provision

No specific provision

S. 843
Carper
Apr. 9, 2003

Cap-and-trade system for CO2 emissions from electricity sector; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facility that has a capacity of greater than 25 megawatts and generates electricity for sale

Cap on electric power emissions of 2006 levels in 2009; lowered to 2001 levels in 2013

Allotted to covered sources at no cost based on previous year's emission levels (minus a reserve set aside for new units)

Determined by EPA

No specific provision

No specific provision

H.R. 2042
Waxman
May 8, 2003

Directs EPA to issue regulations to meet CO2 emissions goals; may include a market-based approach; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facility that has a capacity of greater than 25 megawatts and generates electricity for sale

1990 CO2 levels for power plants by 2009

No specific provision

No specific provision

No specific provision

No specific provision

H.R. 4067
Gilchrest
Mar. 30, 2004

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

1990 GHG levels for covered sources, reduced by the level of emissions from non-covered sources by 2020

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

Source: Prepared by CRS.

Table 2. GHG Emission Reduction Proposals: 109th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

S. 150
Jeffords
Jan. 25, 2005

Cap-and-trade system for CO2 emissions from power plants; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities with a capacity of greater than 15 megawatts

Cap on electric power emissions of 2.05 billion metric tons in 2010

In 2010, EPA allocates free allowance to the following:

60% to households to alleviate increased electricity prices

6% for worker transition assistance

20% for renewable energy and energy efficiency

10% to electricity generation facilities

1% for forest sequestration

2% for geologic sequestration

No specific provision

No specific provision

No specific provision

S. 342
McCain
Feb. 10, 2005

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels), reduced by the level of emissions from non-covered sources

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

H.R. 759
Gilchrest
Feb. 10, 2005

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels), reduced by the level of emissions from non-covered sources

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

H.R. 1451
Waxman
Mar. 17, 2005

Directs EPA to issue regulations to meet CO2 emissions goals; may include a market-based approach; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities that have a capacity of greater than 25 megawatts and generate electricity for sale

1990 CO2 levels for power plants by 2010

No specific provision

No specific provision

No specific provision

No specific provision

S. 730
Leahy
Apr. 6, 2005

EPA determines the framework of the program; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities (no minimum threshold)

Cap on electric power emissions of 2.05 billion metric tons in 2010

No specific provision

No specific provision

No specific provision

No specific provision

H.R. 1873
Bass
Apr. 27, 2005

Cap-and-trade system for CO2 emissions from electricity sector; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities that have a capacity of greater than 25 megawatts and generate electricity for sale

Cap on electric power emissions of 2006 levels in 2010; lowered to 2001 levels in 2015

Allotted to covered sources at no cost based on previous years emission levels (minus a reserve set aside for new units)

Determined by EPA

No specific provision

No specific provision

S. 1151
McCain
May 26, 2005

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels), reduced by the level of emissions from non-covered sources

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

H.R. 2828
Inslee
June 9, 2005

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels), reduced by the level of emissions from non-covered sources

Determined by the Secretary of Commerce; allowances provided to covered entities at no cost and to the newly established, nonprofit Climate Change Credit Corporation, which may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

H.R. 5049
Udall
Mar. 29, 2006

Cap-and-trade system for GHG emissions from multiple sectors, with a price ceiling of $25 per ton of carbon, indexed to inflation

Emissions from domestic and imported fossil fuels; emissions from agricultural, industrial, and manufacturing processes, excluding methane from animals

Maintains existing emission levels; the number of allowances distributed based on emissions from years prior to enactment, without reductions in subsequent years

20% to electric power, fossil fuel production, and energy intensive industries

15% to states for worker transition assistance

5% to states for energy assistance to low-income households

25% to the Department of Energy to support energy research and development

10% to the Department of State to invest in low-emission and emission-free policies in developing countries

25% to the Department of the Treasury to be sold at auction with the proceeds deposited in the Treasury

Provides additional allowances for sequestration projects

No specific provision

No specific provision

S. 2724
Carper
May 4, 2006

Cap-and-trade system for CO2 emissions from electricity sector; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

Fossil-fuel-fired electric generating facilities that have a capacity of greater than 25 megawatts and generate electricity for sale

2001 CO2 emission levels by 2015

Allotted to covered sources based on previous years emission levels

Determined by EPA

No specific provision

No specific provision

H.R. 5642
Waxman
June 20, 2006

Cap-and-trade system for GHG

Determined by EPA

1990 GHG levels for covered sources by 2020; 80% below 1990 levels by 2050

Determined by the President based on plan submitted to Congress; sell via auction and distribute to non-covered sources to achieve specified goals: maximize public benefit, mitigate energy costs to consumers, provide worker transition assistance, among others

No specific provision

No specific provision

EPA to promulgate additional regulations to reduce GHG emissions, including performance standards, efficiency standards, technology requirements, among others; directs Department of Energy to promulgate renewable portfolio standards

S. 3698
Jeffords
July 20, 2006

Directs EPA to issue regulations to meet GHG emissions goals; may include a market-based approach

Determined by EPA

1990 GHG levels by 2020; 80% below1990 levels by 2050

Determined by EPA; allowances to covered entities; remaining allowances to households, communities, and other groups for various objectives

No specific provision

No specific provision; allowances may be allotted to companies that experience disproportionate impacts from lower-carbon economy

Directs EPA to issue CO2 emissions standards for vehicles and CO2 emissions standards for new power plants, create low-carbon electricity generation standards and trading program, promulgate electricity efficiency standards, and establish renewable energy portfolio standards

S. 4039
Kerry
Sep. 29, 2006

Cap-and-trade system for GHG emissions

Determined by EPA through a rulemaking process

1990 GHG levels for covered sources by 2020

Determined by the President; Congress may enact alternative plan within one year

No specific provision

No specific provision

No specific provision

Source: Prepared by CRS.

Table 3. GHG Emission Reduction Proposals: 110th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

S. 280 Lieberman
Jan. 12, 2007

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

1990 GHG levels for covered sources by 2020, reduced by the level of emissions from non-covered sources

Determined by EPA

Up to 15% of submitted allowances can come from domestic or international offsets; if offsets account for 15% of allowances, at least 1.5% must come from agricultural sequestration

No specific provision

No specific provision

S. 309
Sanders
Jan. 16, 2007

Determined by EPA, but must be a market-based program for GHG emissions

Determined by EPA through a rulemaking process

1990 GHG levels for all sources by 2020

Determined by EPA

No specific provision

No specific provision

GHG emission standards for vehicles, new electric power plants, and an energy efficiency performance standard

S. 317
Feinstein
Jan. 17, 2007

Cap-and-trade system for GHG emissions from electricity sector

Fossil-fuel-fired electric generating facilities with a capacity of greater than 25 megawatts

5% below 2001 GHG levels for electric generators by 2020

Initially provided to covered entities at no cost; percentage of allowances sold via auction gradually increases: by 2036, 100% sold via auction; activities funded by auction revenues include technology development and energy efficiency

Up to 25% of required reductions may be achieved with EPA-approved international credits

No specific provision

No specific provision

H.R. 620
Olver
Jan. 22, 2007

Cap-and-trade system for GHG emissions from multiple sectors

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; any refiner or importer of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and any importer or producer of HFCs, PFCs, or SF6 that, when used, will emit over 10,000 mtCO2e

1990 GHG levels for covered sources by 2020, reduced by the level of emissions from non-covered sources

Determined by EPA

Up to 15% of allowance submission can come from domestic and/or international offsets

No specific provision

No specific provision

S. 485
Kerry
Feb. 1, 2007

Cap-and-trade system for GHG emissions

Determined by EPA through a rulemaking process

1990 GHG levels for covered sources by 2020

Determined by the President; Congress may enact alternative plan within one year

No specific provision

No specific provision

No specific provision

H.R. 1590 Waxman
Mar. 20, 2007

Cap-and-trade system for GHG emissions

Determined by EPA through a rulemaking process

1990 GHG levels for all sources by 2020

Determined by the President; Congress may enact alternative plan within one year

No specific provision

No specific provision

GHG emission standards for vehicles, energy efficiency standards, renewable portfolio standards

H.R. 2069
Stark
Apr. 26, 2007

Tax starting at $10/short ton of carbon content in taxable fuels, which equates to approximately $2.70/tCO2 emissions

The rate increases $10 per year (in nominal dollars)

Manufacturers, producers, or importers who sell a taxable fuel, which includes coal, petroleum and petroleum products, and natural gas

Tax rate freeze if CO2 emissions do not exceed 20% of U.S. 1990 CO2 emissions by 2020

No specific provision

NA

No specific provision

No specific provision

S. 1766 Bingaman
July 11, 2007

Cap-and-trade system for GHG emissions from multiple sectors with allowance price ceiling: in 2012, $12/ton, increasing by 5% annually plus inflation

Petroleum refineries, natural gas processing plants, and imports of petroleum products, coke, or natural gas; entities that consume more than 5,000 tons of coal a year; importers of HFCs, PFC, SF6, N2O, or products containing such compounds, and adipic acid and nitric acid plants, aluminum smelters, and facilities that emit HFCs as a byproduct of HCFC production

1990 GHG levels for covered sources by 2020

In 2012, 53% of allowances allocated to covered and certain industrial entities

23% allocated to states and for sequestration and early reduction activities

24% are auctioned to fund low-income assistance, carbon capture and storage, and adaptation activities

The percentage auctioned increases steadily, reaching 53% by 2030

Unlimited use of domestic offsets; international offsets limited to 10% of a regulated entity's emissions target

International reserve allowances must accompany imports of any covered GHG intensive goods and primary products to the United States

Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

No specific provision

H.R. 3416
Larson
Aug. 3, 2007

Tax on CO2 content on fossil fuels, starting at $15/short ton CO2 emissions, increasing by 10% annually plus inflation

Manufacturers, producers, or importers of coal, petroleum, and natural gas

No specific provision

In first year (2008), approximately 76% would support a payroll tax rebate

16% would fund clean energy technology

8% would support affected industry transition assistance (declining to zero by 2017)

Allows for domestic offset projects (as prescribed by the Secretary of the Treasury) to be submitted as tax credits or tax refunds

No specific provision other than direct assistance to affected industries (determined by the Secretaries of the Treasury and Labor)

No specific provision

H.R. 4226 Gilchrest
Nov. 15, 2007

Cap-and-trade system for GHG emissions from multiple sectors

A Carbon Market Efficiency Board may implement cost-relief measures

Electric power, industrial, or commercial entities that emit over 10,000 mtCO2e annually; refiners or importers of petroleum products for transportation use that, when combusted, will emit over 10,000 mtCO2e annually; and importers or producers of HFCs, PFCs, or SF6 that, when used, will emit over 10,000 mtCO2e

85% of 2006 GHG levels from covered sources, reduced by the level of emissions from non-covered sources by 2020

Determined by EPA

Up to 15% of allowance submission can come from domestic and/or international offsets

The President may establish a program to require importers to pay the value of GHGs emitted during the production of goods or services imported into the United States from countries that have no comparable emission restrictions to those of the United States

No specific provision

S. 2191
Lieberman
Oct. 18, 2007

Ordered reported by the Senate Committee on Environment and Public Works on Dec. 5, 2007

Cap-and-trade system for GHG emissions from multiple sectors

Producers or importers of petroleum or coal-based liquid or gaseous fuel that emits GHGs, or facilities that produce or import more than 10,000 mtCO2e of GHG chemicals annually; facilities that use more than 5,000 tons of coal annually; natural gas processing plants or importers (including liquid natural gas [LNG]); or facilities that emit more than 10,000 mtCO2e of HFCs annually as a byproduct of HFC production

Emission cap for covered sources in 2020 is 4.924 billion tCO2e (19% below 2005 levels for covered sources)

In 2012: 40% of allowances allocated to covered electric utilities, industrial facilities, and coops

9% allocated to states for conservation, extra reductions, and other activities

11.5% for various sequestration activities

10% allocated for electricity consumer assistance

5% for early reductions

0.5% for tribal governments

18% (plus an early auction of 6%) auctioned to fund technology deployment, carbon capture and storage, low-income and rural assistance, and adaptation activities

Up to 15% of allowance requirement may be achieved through domestic offsets; international offsets can satisfy an additional 15%

International reserve allowances must accompany imports of any covered GHG-intensive goods and primary products to the United States

Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

Low carbon fuel standard for transportation fuels

S. 3036
Boxer
May 20, 2008

S.Amdt. 4825 (in the nature of substitute) failed a cloture motion on June 6, 2008

Cap-and-trade system for GHG emissions from multiple sectors

A Carbon Market Efficiency Board may implement cost-relief measures if necessary

Producers or importers of petroleum- or coal-based liquid or gaseous fuel that emits GHGs, or facilities that produce or import more than 10,000 mtCO2e of GHG chemicals annually; facilities that use more than 5,000 tons of coal annually; natural gas processing plants or importers (including LNG); or facilities that emit more than 10,000 mtCO2e of HFCs annually as a byproduct of HFC production

Emission cap for covered sources in 2020 is 4.924 billion tCO2e (19% below 2005 levels for covered sources)

A share of allowances are auctioned for deficit reduction increasing from 6.1% in 2012 to 15.99% in 2031 and thereafter

The "remainder allowances" are distributed in 2012 (adjusted in future years) as follows:

38% of allowances to covered electric utilities, industrial facilities, and co-ops

10.5% to states for conservation, extra reductions, and other activities

7.5% for various sequestration activities

11% allocated for electricity and natural gas consumer assistance

5% for early reductions

0.5% for tribal governments

1% for methane reduction projects

21.5% (plus an early auction of 5%) auctioned to fund technology deployment, carbon capture and storage, low income and rural assistance, and adaptation activities, as well as program management

Up to 15% of allowance requirement may be achieved through domestic offsets; international allowances can satisfy an additional 15%

International reserve allowances must accompany imports of any covered GHG-intensive goods and primary products to the United States

Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

Low carbon fuel standard for transportation fuels

H.R. 6186 Markey
June 4, 2008

Cap-and-trade system for GHG emissions from multiple sectors

Electric power or industrial facilities that emit over 10,000 mtCO2e; producers or importers of petroleum or coal-based liquid products that, when combusted, will emit over 10,000 mtCO2e annually; local distribution companies that deliver natural gas that, when combusted, will emit over 10,000 tCO2e annually; producers or importers of HFCs, PFCs, SF6, or NF3 that, when used, will emit over 10,000 mtCO2e; sites at which CO2 is geologically sequestered on a commercial scale

Emission cap for covered sources in 2020 is 4.983 billion tCO2e

Between 2012 and 2019, 6% of allowances would be distributed to manufacturers of "trade-exposed primary goods"

Remaining 94% auctioned (100% by 2020), with revenues distributed (in FY2010-FY2019) as follows:

58.5% to middle- and low-income households as tax credits and/or rebates

12.5% for development and promotion of low-carbon technology

12.5% for energy efficiency programs

4.5% for biological sequestration

1.5% for worker transition assistance

2% for domestic adaptation efforts

1.5% for protection of natural resources

1.5% for international forest protection

3.5% for international clean technology

2% for international adaptation efforts

Up to 15% of allowance requirement may be achieved through domestic offsets; international offsets or allowances can satisfy an additional 15%

International reserve allowances must accompany imports of any covered GHG intensive goods and primary products to the United States

Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

EPA to develop emission performance standards for certain non-covered entities that exceed 10,000 tCO2e per year

Low-carbon fuel standard for transportation fuels

Performance standard for certain coal-fired power plants to capture and geologically sequester not less than 85% of their CO2 emissions

H.R. 6316 Doggett
June 19, 2008

Cap-and-trade system for GHG emissions from multiple sectors

A Carbon Market Efficiency Board may implement cost-relief measures

Producers or importers of petroleum- or coal-based liquid or gaseous fuel that emits GHGs, or facilities that produce or import more than 10,000 mtCO2e of GHG chemicals annually; facilities that use more than 5,000 tons of coal annually; natural gas processing plants or importers (including LNG); or, facilities that emit more than 10,000 mtCO2e of HFCs annually as a byproduct of HFC production

Emission cap for covered sources in 2020 is 6.087 billion mtCO2e

In 2012, 5% of the allowances are allocated to electric generators; 10% are allocated to energy intensive industries

Remaining allowances are auctioned with revenues used for the following:

54% for consumer assistance (66% of which goes towards providing health insurance coverage, the remainder for rebates and tax relief)

15% of revenues for deficit reduction

11.4% for international activities

7.5% for energy efficiency

7% for natural resource adaptation

7% for green energy research

4% for worker assistance

3% for forestry and agricultural activities

2.7% for states and tribes

2% for transportation alternatives

1% for early action

0.4% for education

Up to 10% of allowance requirement may be achieved through domestic offsets; international allowances can satisfy an additional 15%

International reserve allowances must accompany imports of any covered GHG-intensive goods and primary products to the United States

Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

EPA to promulgate regulations that address emissions in uncovered sectors

Source: Prepared by CRS.

Table 4. GHG Emission Reduction Proposals: 111th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

H.R. 594
Stark
Jan. 15, 2009

Tax on CO2 content in fossil fuels, starting at $10/short ton, increasing by $10 per year

Manufacturers, producers, or importers who sell a taxable fuel, which includes coal, petroleum and petroleum products, and natural gas

Tax freezes if CO2 emissions do not exceed 20% of U.S. 1990 CO2 emissions by 2020

No specific provision

NA

No specific provision

No specific provision

H.R. 1337
Larson
Mar. 5, 2009

Tax on CO2 content in fossil fuels, starting at $15/short ton, increasing by $10 each year emissions target is not met

Manufacturers, producers, or importers of coal, petroleum, and natural gas

EPA is to establish (within five years after enactment) annual CO2 emission targets in order to reach goal of 80% below 2005 CO2 emissions by 2050

In first year:

76% would support a payroll tax rebate

16% would fund clean energy technology

8% would support affected industry transition assistance (declining to zero by 2017)

Instructs Department of the Treasury (in consultation with Department of Energy) to submit a report of qualified offset projects but does not allow for projects to generate tax credits

Department of the Treasury imposes a carbon equivalency fee on imported carbon-intensive goods, including steel, aluminum, and paper; fee based on emissions associated with production of carbon-intensive goods

No specific provision

H.R. 1666 Doggett
Mar. 23, 2009

Cap-and-trade system for GHG emissions, with an oversight board to manage price path between 2012 and 2019

Not explicitly defined

Target of 4.9 billion mtCO2e for covered entities by 2020

Oversight board administers auctions to manage the allowance price path; precise use of auction revenues is not specified

No specific provision

No specific provision

No specific provision

H.R. 1683 McDermott
Mar. 24, 2009

Hybrid cap/tax system for GHG emissions: covered persons must purchase an emission permit from the Department of the Treasury when a "GHG emission substance" is produced or enters the United States; permits may not be sold or exchanged; price for emission permits based on achieving annual emission targets

Coal producers, petroleum refineries; producers of other GHG emission substances (including natural gas, among others); importers of GHG emission substances

25% below 2005 GHG emissions by 2020

Establishes trust fund that would receive appropriations equal to revenue received by selling emission permits

Precise use of the revenue is not specified

No specific provision

Department of the Treasury imposes a GHG emission permit equivalency fee on imported carbon-intensive goods, including steel, aluminum, and paper

No specific provision

H.R. 1862
Van Hollen
Apr. 1, 2009

Cap-and-trade system for CO2 emissions from multiple sectors

Person who makes the first sale in United States of coal, oil, natural gas, and any fossil-fuel-derived products used as a combustible fuel

25% below 2005 CO2 emissions by 2020

100% of allowances sold via auction; proceeds used to fund consumer dividend payments; each month, every person with a Social Security number would receive an equal payment

No specific provision

Department of the Treasury imposes a carbon equivalency fee on imported carbon-intensive goods, including steel, aluminum, and paper

No specific provision

H.R. 2380
Inglis
May 13, 2009

Tax on fossil fuels, starting at $15/short ton of CO2 emissions, and increasing by approximately 6.5% each year, plus cost-of-living adjustments

Manufacturers, producers, or importers of coal, petroleum, and natural gas

No specific provision

Tax revenue used to offset a corresponding reduction in payroll tax rates (employee, employer, and self-employed)

No specific provision

Imposes a tax on "imported taxable products" in relation to fossil fuels used or the CO2 emissions generated during the product's manufacturing process

No specific provision

H.R. 2454 Waxman-Markey
May 15, 2009

Reported by the Committee on Energy and Commerce on June 5, 2009

Passed the House on June 26, 2009

For more information, see CRS Report R40643, Greenhouse Gas Legislation: Summary and Analysis of H.R. 2454 as Passed by the House of Representatives, coordinated by Mark Holt and Gene Whitney

Cap-and-trade system for GHG emissions from multiple sectors

Electricity generators, various fuel producers and importers, fluorinated gas producers and importers, geological sequestration sites, various industrial sources, and local distribution companies (LDCs) that deliver natural gas

Covered entity coverage is phased in by category so that all of the above are under the cap in 2016

17% below 2005 emissions from covered sources by 2020

Emission allowance value distributed (as no-cost allowances or auction revenue) in the following manner in 2016:

30% (at minimum) to electricity LDCs; 0.5% for small electric LDCs; 9% to natural gas LDCs; 1.5% to states for home-heating oil consumers

15% directly to low-income consumers

13.4% to energy-intensive, trade-exposed industries; up to 3.5% to merchant coal units; 2% to petroleum refineries plus 0.25% for small business refineries; up to 1.5% for certain long-term power contract operators

7.1% to states to support renewable energy and energy efficiency efforts

6% to promote technological advances

5% to reduce international deforestation

0.2% for deficit reduction

5% to further other objectives

In 2016, approximately 27% of an entity's allowance obligation can be satisfied with offsets; this percentage increases to 36% by 2030

Up to half of an entity's offsets can come from domestic sources and up to half from international sources

Unless otherwise determined by EPA, covered entities may use unlimited amount of international allowances from "qualifying programs"

Energy-intensive, trade-exposed industries to receive allowances at no cost until phased out in mid-2030s; and

EPA to promulgate rules establishing an international reserve allowance system for any covered good of an eligible industrial sector from a covered country

Exemptions are provided for (1) least developed countries, (2) countries that emit less than 0.5% of global GHG emissions, and (3) countries meeting specific criteria

Establishes a separate cap-and-trade program that controls HFC emissions

Directs EPA to establish emission performance standards for select sources not covered by the emissions cap

S. 1733
Kerry-Boxer
Sep. 30, 2009

Reported by the Committee on Environment and Public Works (a "Manager's Amendment" in the nature of substitute) on Nov. 5, 2009

Cap-and-trade system for GHG emissions from multiple sectors

Electricity generators, various fuel producers and importers, fluorinated gas producers and importers, geological sequestration sites, various industrial sources, and LDCs that deliver natural gas

Coverage is phased in by category so that all of the above are under the cap in 2016

20% below 2005 emissions from covered sources by 2020

Emission allowance value is distributed in the following manner in 2016:

25.8% (at minimum) to electricity LDCs; 0.94% for small electric LDCs

7.7% to natural gas LDCs

1.3% to states for home-heating oil consumers

12.9% directly to low-income consumers

12.1% to energy-intensive, trade-exposed industries

up to 3.0% to merchant coal units

0.64% to petroleum refineries plus 0.86% for small business refineries and 0.43% for medium refineries

up to 1.3% for certain long-term power contract operators

5.97% to states to support renewable energy and energy efficiency efforts

5.6% to promote technological advances

1.92% for GHG reductions in the transportation sector

10.3% for deficit reduction

8% to further other objectives

In 2016, approximately 35% of an entity's allowance submission can comprise offsets; up to 75% of an entity's offsets can come from domestic sources and up to 25% from international sources

Unless otherwise determined by EPA, unlimited use of international allowances from "qualifying programs"

Trade-exposed, carbon-intensive industries to receive allowances at no cost; in addition, the bill states:

"It is the sense of the Senate that this Act will contain a trade title that will include a border measure that is consistent with our international obligations and designed to work in conjunction with provisions that allocate allowances to energy-intensive and trade-exposed industries"

Establishes a separate cap-and-trade program that controls HFCs

S. 2877
Cantwell
Dec. 11, 2009

Hybrid cap/tax system for CO2 emissions: covered entities submit "carbon shares" for CO2 emissions associated with the use of the fossil fuels

Trading of carbon shares is restricted to a dedicated exchange established by Treasury

Price ceiling for carbon shares: initially at $21/tCO2 in 2012; if reached, additional shares made available, and this revenue would support mitigation from non-covered entities

Fossil fuel producers (e.g., mines, wells) and importers who introduce "fossil carbon" into the United States economy

20% below 2005 GHG levels from all sources by 2020

All carbon shares sold in auctions

Subject to the appropriations process, 75% of the revenue would be distributed monthly in non-taxable dividends to all legally residing individuals in the United States

Subject to the appropriations process, 25% could be used to support a myriad of policy objectives, including worker transition assistance, adaptation, technology development, energy efficiency, biological sequestration, and deficit reduction

Offsets are not allowed for compliance purposes

Treasury may impose fees for the "production process carbon" associated with commodities imported into the United States

No specific provision

Kerry-Lieberman Discussion Draft
May 12, 2010
(considered by many to be the primary legislative vehicle in the Senate at the time)

Cap-and-trade system for GHG emissions from multiple sectors

Electricity generators, various fuel producers and importers, fluorinated gas producers and importers, geological sequestration sites, various industrial sources, and LDCs that deliver natural gas

Covered entity coverage is phased in by category so that all of the above are under the cap in 2016

17% below 2005 emissions from covered sources by 2020

Emission allowance value distributed in the following manner in 2016:

30% (at minimum) to electric LDCs; 9% for natural gas LDCs; 1.5% to states for home-heating oil and propane consumers;

12.3% directly to low-income consumers

15% to trade-exposed industries; up to 0.5% to merchant coal units; 3.75% to petroleum refineries; up to 4.5% to long-term power contract operators

2% to states to support renewable energy and energy efficiency efforts

4% to promote technological advances

9.2% to support transportation infrastructure and efficiency

6.75% for deficit reduction

1.5% auctioned to help mitigate against high allowance prices

In 2016, approximately 35% of an entity's allowance submission can comprise offsets; up to 75% of an entity's offsets can come from domestic sources and up to 25% from international sources

Unless otherwise determined by EPA, unlimited use of international allowances from "qualifying programs"

Trade-exposed, carbon-intensive industries to receive allowances at no cost

EPA to establish an international reserve allowance system for covered goods of an eligible industrial sector from a covered country

Exemptions are provided for (1) least developed countries, (2) countries that emit less than 0.5% of global GHG emissions, and (3) countries meeting the specific criteria

Establishes a separate cap-and-trade program that controls HFC

Source: Prepared by CRS.

Table 5. GHG Emission Reduction Proposals: 112th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

H.R. 3242
Stark
Oct. 24, 2011

Tax on CO2 emissions from combustion of fossil fuels and other materials

Rate starts at $10/short ton of CO2 emissions, increasing by $10 per year until emissions target reached

Manufacturers, producers, or importers who sell coal, petroleum and petroleum products, natural gas, biomass, municipal solid waste, and any other organic material sold for energy use

80% reduction of CO2 emission levels in 1990

Tax revenue is distributed annually in pro rata payments to individuals with a taxpayer identification number

No specific provision

Border adjustment fees for comparable imported products

No specific provision

H.R. 6338
McDermott
Aug. 2, 2012

Hybrid cap/tax approach on GHG emissions: covered entities purchase permits from the Department of the Treasury for expected emissions associated with combustion or use of covered material (e.g., fossil fuels)

Permits cannot be sold or traded

Price floor and price ceiling (i.e., price collar), ranges between $6.25 and $18.75 in 2015

Coal producers, petroleum refineries, first seller of natural gas, producers and importers of GHG emission substances

Average emissions between 2015 and 2019 equal to GHG emissions in 2005 by 2020

75% of the permit revenue is used to send monthly dividend payments to taxpayers

25% retained for deficit reduction

No specific provision

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive a payment related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

No specific provision

Source: Prepared by CRS.

Table 6. GHG Emission Reduction Proposals: 113th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

S. 332
Sanders
Feb. 14, 2013

Upstream tax/fee on fossil fuels based on their carbon content

EPA would impose a fee on coal, petroleum, and natural gas produced or imported into the United States

GHG emissions at 80% below 2005 levels by 2050

60% distributed to EPA to provide monthly rebates to legal residents

40% finances a trust fund that distributes the following amounts annually for 10 years:

$7.5 billion to mitigate economic impacts of Energy Intensive Trade Exposed (EITE) industries (25% must be energy efficiency investments in EITE industries)

$5 billion to support the Weatherization Assistance Program

$1 billion for job training and transition assistance

$2 billion for Advanced Research Projects Agency-Energy

Any remaining funds in the trust fund are applied to deficit reduction

Revenues from the carbon equivalency fee on imports:

50% to EPA to distribute to state/local programs for adaptation, infrastructure improvement, and environmental protection

50% to the Department of Transportation to support state/local critical infrastructure and transportation projects that reduce vehicular traffic

No specific provision

A carbon equivalency fee would apply to imports of carbon-pollution-intensive goods

Directs EPA to submit report to Congress describing fugitive methane emissions related to leaks in natural gas infrastructure and recommending ways to address these leaks; directs EPA to enter agreement with the National Academy of Sciences to study GHG emissions from non-covered sources and make recommendations for reducing these emissions

S. 2940
Whitehouse
Nov. 19, 2014

Fee on fossil fuels based on their carbon content and certain facilities

Fee set at $42/mtCO2 emissions in 2015, increasing by 2% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of CO2 annually

Fee continues until national GHG emissions are 80% below 2005 levels

Fee revenue used to create the American Opportunity Fund, appropriations from the fund could support the following (percentages not specified):

income assistance to low-income households facing disproportionate energy costs

tax cut offsets

Social Security benefit increases

tuition assistance-infrastructure improvements

dividends to individuals and families

transition assistance to workers in energy-intensive industries

climate mitigation and adaptation

national debt reduction

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of carbon-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for non-CO2 GHG emissions at facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e (not including CO2 emissions)

Additional fee for methane emissions from fossil fuel extraction, distribution, and combustion

Source: Prepared by CRS.

Table 7. GHG Emission Reduction Proposals: 114th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

H.R. 972
McDermott
Feb. 13, 2015

Hybrid cap/tax approach on GHG emissions: covered entities purchase permits from the Department of the Treasury for expected emissions associated with fossil fuel use

Permits cannot be sold or traded

Price floor and price ceiling, ranging between $18.75 and $31.25 in 2017, increasing each year

Coal producers, petroleum refineries, first seller of natural gas, producers and importers of GHG emission substances

Average emissions between 2016 and 2020 equal to 90% of GHG emissions in 2005 by 2020

100% of the permit revenue is used to send monthly dividend payments to taxpayers

No specific provision

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive a payment related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

No specific provision

H.R. 2202
Delaney
May 1, 2015

Imposes an excise tax on GHG emissions

Tax starts at $30/mtCO2e, increasing each year by 4% plus inflation

Tax applies to GHG emissions associated with fossil fuel combustion and GHG emissions from facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Directs the Treasury Secretary to apply the tax at natural "chokepoints" in the supply chain in a way that maximizes the coverage of the tax on sources of emission while minimizing the burden on administration and compliance

No specific provisions

Distributes monthly energy refund payments to households based on the household's gross income level; households with incomes up to 200% above poverty line are eligible, but higher-income households may receive scaled refunds under certain conditions; payments are based on estimates (calculated by the Energy Information Administration) of loss of purchasing power due to the carbon tax

During the first 10 years of the tax, 2% of the revenues may be used to provide assistance to workers in the coal industry displaced by the act

Although not explicitly tied to the GHG tax revenue, the bill would gradually reduce the highest tax rate on corporate income from 35% to 28%

A tax refund is provided for GHG emissions that are captured and permanently sequestered

The Secretary of the Treasury may impose an equivalency fee on the person importing a good that would have had an increased cost (imposed by the carbon tax) if the good were produced in the United States

Exporters of carbon-intensive goods may receive compensation for losses related to the tax system

No specific provision

S. 1548
Whitehouse
June 10, 2015

Fee on fossil fuels based on their carbon content and on certain facilities for GHG emissions

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs

Fee continues until national GHG emissions are 80% below 2005 levels

The bill reduces the highest tax rate on corporate income from 35% to 29%, provides an annual tax credit for each individual, provides an equivalent benefit to individuals not eligible for the tax credit, provides up to $20 billion in annual cost-mitigation grants to states to be used to assist low-income and rural households with energy costs and support job training and worker assistance programs

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price, and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Separate fee for GHGs (other than CO2 and fluorinated gas emissions) set at $45/mtCO2e in 2016, increasing by 2% plus inflation each year

Additional fee for methane emissions from fossil fuel extraction, distribution, and combustion (as determined by Secretary of the Treasury)

S. 2399
Sanders
Dec. 10, 2015

Fee on fossil fuels based on carbon content

Fee starts at $15 mtCO2e, increasing annually by $2 to $4, until reaching $73 in 2035; increasing thereafter by 5% plus inflation

A carbon content fee is imposed on manufacturers, producers, or importers of a carbon polluting substance, which includes fossil fuels; carbon content determined by the Secretary of the Treasury

Target of 5.8 billion metric tons in 2020, which is equivalent to 20% below 2005 CO2 emissions from fossil fuel combustion

Distributes collected revenue from fees in equal quarterly rebates to each citizen or permanent resident; Secretary of the Treasury to issue regulations implementing rebate system; the rebates are phased out and eliminated for households earning over $100,000/year (with annual inflation adjustments); fees from imported materials would be used to support other objectives, including energy efficiency

No specific provisions

A carbon equivalency fee would apply to imports of carbon-pollution-intensive goods, as determined by the Secretary of the Treasury

Establishes the Interagency Climate Council to monitor GHG emission progress and issue regulations to help meet reduction targets; creates a grant program to promote no-till farming practices and a nitrogen uptake pilot program

Source: Prepared by CRS.

Table 8. GHG Emission Reduction Proposals: 115th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

H.R. 2014
Delaney
Apr. 6, 2017

Imposes an excise tax on GHG emissions

Tax starts at $30/metric ton of CO2e, increasing each year by 4% plus inflation

Tax applies to GHG emissions associated with fossil fuel combustion and GHG emissions from persons who (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Directs the Treasury Secretary to apply the tax at natural chokepoints in the supply chain in a way that maximizes the coverage of the tax on sources of emission while minimizing the burden on administration and compliance

No specific provisions

Distributes monthly energy refund payments to households, based on the household's gross income level; households with incomes up to 200% above poverty line are eligible, but higher-income households may receive scaled refunds under certain conditions; payments are based on estimates (calculated by the Energy Information Administration) of loss of purchasing power due to the carbon tax

During the first 10 years of the tax, 2% of the revenues may be used to provide assistance to workers in the coal industry displaced by the act

Although not explicitly tied to the GHG tax revenue, the bill would gradually reduce the highest tax rate on corporate income from 35% to 28%

A tax refund is provided for GHG emissions that are captured and permanently sequestered

The Secretary of the Treasury may impose an equivalency fee on the person importing a good that would have had an increased cost (imposed by the carbon tax) if the good is produced in the United States

Exporters of carbon-intensive goods may receive compensation for losses related to the tax system

 

S. 1639
Whitehouse
July 26, 2017

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions

Fee set at $49/ton CO2 emissions in 2018, increasing by 2% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Fee continues until national GHG emissions are 80% below 2005 levels

The bill reduces the highest tax rate on corporate income from 35% to 29%, provides an annual tax credit for each individual, provides an equivalent benefit to individuals not eligible for the tax credit, provides up to $20 billion in annual cost-mitigation grants to states to be used to assist low-income and rural households with energy costs and support job training and worker assistance programs

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price, and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Fee for facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e emissions (other than CO2 or fluorinated GHGs)

Additional fee for GHG emissions resulting from venting, flaring, and leaking across the coal, natural gas, and petroleum supply chains (as determined by Secretary of the Treasury)

H.R. 3420
Blumenauer
July 26, 2017

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions

Fee set at $49/ton CO2 emissions in 2018, increasing by 2% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Fee continues until national GHG emissions are 80% below 2005 levels

The bill reduces the highest tax rate on corporate income from 35% to 29%, provides an annual tax credit for each individual, provides an equivalent benefit to individuals not eligible for the tax credit, provides up to $20 billion in annual cost-mitigation grants to states to be used to assist low-income and rural households with energy costs and support job training and worker assistance programs

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Fee for facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e (other than CO2 or fluorinated GHGs)

Additional fee for GHG emissions resulting from venting, flaring, and leaking across the coal, natural gas, and petroleum supply chains (as determined by Secretary of the Treasury)

H.R. 4209
Larson
Nov. 1, 2017

Tax on fossil fuels based on their carbon content

Tax set at $49/mtCO2 in 2019, increasing by 2% plus inflation each year

Tax applies to manufacturers, producers, or importers of coal, petroleum, and natural gas

No specific provision

Establishes a trust fund that would receive appropriations equal to tax revenue received in the Treasury; the trust fund would provide annual funding for the following infrastructure programs:

$50 billion (plus the Highway Trust Fund shortfall) for highway (80%) and mass transit (20%);
$5 billion for the Transportation Investments Generating Economic Recovery program;
$3 billion for aviation;
$5 billion for passenger rail;
$6 billion for harbors, waterways, flood protection, and dams;
$6 billion for wastewater and drinking water; and
$3 billion for broadband

In addition, the trust fund provides:

$5 billion annually for worker transition assistance in the fossil fuel industries; and
12.5% for an energy refund program that would provide monthly payments to households with incomes up to 150% of poverty line

Any remaining revenues supports a consumer tax rebate for households with incomes up to 350% of the poverty line

No specific provisions

The Secretary of the Treasury shall impose a fee on imports of carbon-intensive goods; the fee will be equivalent to the cost that domestic producers incur due to the carbon tax; this fee expires if the exporting nation implements equivalent measures or if an international agreement requires equivalent measures

No specific provisions

S. 2352
Van Hollen
Jan. 29, 2018

Cap-and-trade system for CO2 emissions from fossil fuel combustion

Permits sold through quarterly auctions by the Department of the Treasury

Auction revenue distributed to individuals, often described as a "cap and dividend" approach

A permit reserve and borrowed permits from future years may be used to help stabilize auction prices

Covered materials include crude oil, coal, natural gas, and products derived from these materials used for combustion

Covered entities include petroleum refineries and importers, coal mines and importers, and natural gas deliverers (as reported on Energy Information Administration Form 176) and some natural gas processors

2020 limit: permits sold equal to 20% below 2005

2025 limit: permits sold equal to 30% below 2005 U.S. CO2 emissions

2030 limit: permits sold equal to 40% below 2005 U.S. CO2 emissions

2040 limit: permits sold equal to 60% below 2005 U.S. CO2 emissions

Auction revenue distributed via quarterly dividend payments to all persons with a valid Social Security number

No specific provisions

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive compensation for losses related to the permit system

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program; emissions "directly attributable to the production of animals for food or food products" are excluded

H.R. 4889
Beyer
Jan. 29, 2018

Cap-and-trade system for CO2 emissions from fossil fuel combustion

Permits sold through quarterly auctions by the Department of the Treasury

Auction revenue distributed to individuals, often described as a "cap and dividend" approach

A permit reserve and borrowed permits from future years may be used to help stabilize auction prices

Covered materials include crude oil, coal, natural gas, and products derived from these materials used for combustion

Covered entities include petroleum refineries and importers, coal mines and importers, and natural gas deliverers (as reported on Energy Information Administration Form 176) and some natural gas processors

2020 target: reduce U.S. CO2 emissions to 20% below 2005 levels

2030 target: 40% below 2005 levels

Auction revenue distributed via quarterly dividend payments to all persons with a valid Social Security number

No specific provisions

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive compensation for losses related to the permit system

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program; emissions "directly attributable to the production of animals for food or food products" are excluded

S. 2368
Whitehouse
Feb. 5, 2018

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions

Fee set at $50/ton CO2 emissions in 2019, increasing by 2% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Fee continues until national GHG emissions are 80% below 2005 levels

The bill provides an annual tax credit for each individual, provides an equivalent benefit to individuals not eligible for the tax credit, provides up to $10 billion in annual cost-mitigation grants to states to be used to assist low-income and rural households with energy costs and support job training and worker assistance programs; this amount increases annually

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Separate fee for GHGs (other than CO2 and fluorinated gas emissions) at facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e emissions

Additional fee for GHG emissions resulting from venting, flaring, and leaking across the coal, natural gas, and petroleum supply chains (as determined by Secretary of the Treasury)

H.R. 4926
Blumenauer
Feb. 5, 2018

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions

Fee set at $50/ton CO2 emissions in 2019, increasing by 2% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Fee continues until national GHG emissions are 80% below 2005 levels

The bill provides an annual tax credit for each individual, provides an equivalent benefit to individuals not eligible for the tax credit, provides up to $10 billion in annual cost-mitigation grants to states to be used to assist low-income and rural households with energy costs and support job training and worker assistance programs; this amount increases annually

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Separate fee for GHGs (other than CO2 and fluorinated gas emissions) at facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e

Additional fee for GHG emissions resulting from venting, flaring, and leaking across the coal, natural gas, and petroleum supply chains (as determined by Secretary of the Treasury)

H.R. 6463
Curbelo
July 23, 2018

Tax on fossil fuels based on their carbon content and on emissions from specific facilities and sources

Tax starts at $24/metric ton of CO2e, increasing by 2% plus inflation each year

Tax applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, facilities in specified industrial sectors that emit more than 25,000 metric tons of CO2e annually, facilities that manufacture or import specified products, and facilities that combust biomass with emissions above 25,000 metric tons of CO2e

No specific provision

Authorizes the Secretary of the Treasury to increase the tax rate if annual, cumulative emission reduction targets are not met (e.g., 5,177 million metric tons CO2e in 2020)

Establishes a trust fund that receives appropriations equal to 75% of tax revenue deposited in the Treasury; from this amount, the trust fund provides annual funding for the following objectives ("as provided in appropriations acts") between FY2021 and FY2030:

70% to the Federal Highway Trust Fund;

10% to the states as grants to low-income households;

5.0% for frequent and chronic coastal flooding mitigation and adaptation infrastructure projects;

3.0% for displaced energy workers;

2.7% for various energy-related research and development objectives (e.g., carbon capture and storage);

3.0% to support agricultural GHG sequestration projects;

2.5% for the Airport and Airway Trust Fund;

2.0% for the Abandoned Mine Reclamation Fund;

1.5% for the Department of Energy weatherization program;

0.1% for the Leaking Underground Storage Tank trust fund;

0.1% for the Reforestation Trust Fund;

0.1% to decrease the environmental impact of renewable energy activities pursuant to Section 931 of the Energy Policy Act of 2005

No specific provisions

Imports of carbon-intensive goods subject to a border tax—determined by the Secretary of the Treasury—that is equivalent to the costs in comparable domestic manufactured goods (associated with the carbon tax)

Exporters of energy-intensive goods may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the tax

Establishes a conditional moratorium on Clean Air Act GHG regulations for stationary emissions sources (with some exceptions)

Creates a National Climate Commission to set five-year emission reduction goals between 2025 and 2050 and assess the effectiveness of federal policies in meeting these goals

H.R. 7173
Deutch
Nov. 27, 2018

Fee on fossil fuels based on their GHG content

Fee set at $15/mtCO2e emissions in 2019, increasing by $10 each year

If emission reduction targets are not met, fee increases by $15; if targets met, fee does not increase

Provides a rebate for fuels used on a farm

Covered entities include petroleum refineries and importers, coal mines and importers, natural gas deliverers, and some natural gas processors

Emission reduction targets apply to fossil fuel combustion emissions; starting in 2022, annual reductions of 5% of 2015 levels (253 million mtCO2e) between 2022 and 2029; less stringent reductions in subsequent years

Establishes a trust fund that receives appropriations equal to emission fee revenues received in the Treasury; monies in the trust fund are available (after administrative expenses) to provide monthly payments to eligible individuals (i.e., persons with a Social Security number or taxpayer identification number); adults get one share and children receive a half-share

No specific provisions

Imports of carbon-intensive products subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the excess of (1) GHG emissions from production multiplied by the relevant U.S. emissions fee over (2) the total foreign product cost of carbon;

Exporters of carbon-intensive products (and covered fuels) may receive a refund under an analogous formula

Separate fee for fluorinated GHGs set at 10% of fee for fossil fuel emissions

Suspends enforcement of certain Clean Air Act GHG regulations; if EPA determines (in 2030 and every five years thereafter) emission targets are not met, the enforcement suspension would cease and EPA must promulgate regulations to reduce emissions from covered fuels

S. 3791
Coons
Dec. 19, 2018

Fee on fossil fuels based on their GHG content

Fee set at $15/mtCO2e emissions in 2019, increasing by $10 each year

If emission reduction targets are not met, fee increases by $15; if targets met, fee does not increase

Provides a rebate for fuels used on a farm

Covered entities include petroleum refineries and importers, coal mines and importers, natural gas deliverers, and some natural gas processors

Emission reduction targets apply to fossil fuel combustion emissions; starting in 2022, annual reductions of 5% of 2015 levels (253 million mtCO2e) between 2022 and 2029; this equates to a 50% reduction in 2030 compared to 2005 levels; less stringent reductions in subsequent years

Establishes a trust fund that receives appropriations equal to emission fee revenues received in the Treasury; monies in the trust fund are available (after administrative expenses) to provide monthly payments to eligible individuals (i.e., persons with a Social Security number or taxpayer identification number); adults get one share and children receive a half-share

No specific provisions

Imports of carbon-intensive products subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the excess of(1) GHG emissions from production multiplied by the relevant U.S. emissions fee over (2) the total foreign product cost;

Exporters of carbon-intensive products (and covered fuels) may receive a refund under an analogous formula

Separate fee for fluorinated GHGs set at 10% of fee for fossil fuel emissions

Directs EPA to evaluate effectiveness of fee program in meeting emission reduction targets; if targets are met, EPA may review existing regulations on fossil fuel combustion and fluorinated GHG emissions

Source: Prepared by CRS.

Table 9. GHG Emission Reduction Proposals: 116th Congress

Ordered Chronologically by Introduced Date

Bill Number, Sponsor, Introduced Date, and Committee or Floor Action

General Framework

Covered Entities/Materials

Emissions Limit or Target

Distribution of Allowance Value or Tax/Fee Revenue

Offset and International Allowance Treatment

Mechanism to Address Carbon-Intensive Imports

Additional GHG Reduction Measures

H.R. 763
Deutch
Jan. 24, 2019

Fee on fossil fuels based on their GHG content

Fee set at $15/mtCO2e emissions in 2019, increasing by $10 each year plus inflation

If emission reduction targets are not met, fee increases by $15 plus inflation; if targets met, fee does not increase

Provides a rebate for fuels used on a farm and for fuels or their derivatives used by U.S. Armed Forces

Covered entities include petroleum refineries and importers, coal mines and importers, natural gas deliverers, and some natural gas processors

Emission reduction targets apply to fossil fuel combustion emissions; starting in 2025, annual reductions of 5% of 2016 levels (248 million mtCO2e) between 2025 and 2034; annual reductions of 2.5% of 2016 levels between 2035 and 2050

Fee ceases if emissions from covered fuels decrease to 10% of 2016 levels (497 million mtCO2e) and monthly dividend check reach certain levels

Establishes a trust fund that receives appropriations equal to emission fee revenues received in the Treasury; monies in the trust fund are available (after administrative expenses) to provide monthly payments to eligible individuals (i.e., persons with a Social Security number or taxpayer identification number); adults get one share and children receive a half-share

No specific provisions

Imports of carbon-intensive products subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the excess of (1) GHG emissions from production multiplied by the relevant U.S. emissions fee over (2) the total foreign product cost of carbon

Exporters of carbon-intensive products (and covered fuels) may receive a refund under an analogous formula

Separate fee for fluorinated GHGs set at 10% of fee for fossil fuel emissions

Suspends enforcement of certain Clean Air Act GHG regulations; if EPA determines (in 2030 and every five years thereafter) emission targets are not met, the enforcement suspension would cease and EPA must promulgate regulations to reduce emissions from covered fuels

S. 940
Van Hollen
Mar. 28, 2019

This proposal is identical to H.R. 1960 (Beyer)

Cap-and-trade system for CO2 emissions from fossil fuel combustion

Permits sold through quarterly auctions by the Department of the Treasury

Auction revenue distributed to individuals, often described as a "cap and dividend" approach

A permit reserve and borrowed permits from future years may be used to help stabilize auction prices

Covered materials include crude oil, coal, natural gas, and products derived from these materials used for combustion

Covered entities include petroleum refineries and importers, coal mines and importers, and natural gas deliverers (as reported on Energy Information Administration Form 176) and some natural gas processors

2020 limit: permits sold equal to 12.5% below 2005 U.S. CO2 emissions

2025 limit: permits sold equal to 30% below 2005 U.S. CO2 emissions

2030 limit: permits sold equal to 50% below 2005 U.S. CO2 emissions

2040 limit: permits sold equal to 80% below 2005 U.S. CO2 emissions

Auction revenue distributed via quarterly dividend payments to all persons with a valid Social Security number

No specific provisions

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive compensation for losses related to the permit system

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program; emissions "directly attributable to the production of animals for food or food products" are excluded

H.R. 1960
Beyer
Mar. 28, 2019

This proposal is identical to S. 940 (Van Hollen)

Cap-and-trade system for CO2 emissions from fossil fuel combustion

Permits sold through quarterly auctions by the Department of the Treasury

Auction revenue distributed to individuals, often described as a "cap and dividend" approach

A permit reserve and borrowed permits from future years may be used to help stabilize auction prices

Covered materials include crude oil, coal, natural gas, and products derived from these materials used for combustion

Covered entities include petroleum refineries and importers, coal mines and importers, and natural gas deliverers (as reported on Energy Information Administration Form 176) and some natural gas processors

2020 limit: permits sold equal to 12.5% below 2005 U.S. CO2 emissions

2025 limit: permits sold equal to 30% below 2005 U.S. CO2 emissions

2030 limit: permits sold equal to 50% below 2005 U.S. CO2 emissions

2040 limit: permits sold equal to 80% below 2005 U.S. CO2 emissions

Auction revenue distributed via quarterly dividend payments to all persons with a valid Social Security number

No specific provisions

Unless an exporting nation has implemented equivalent measures, imports of carbon-intensive goods will be subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the costs domestic producers of comparable products incur due to the carbon price

Exporters of carbon-intensive goods may receive compensation for losses related to the permit system

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program; emissions "directly attributable to the production of animals for food or food products" are excluded

S. 1128
Whitehouse
Apr. 10, 2019

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions

Fee set at $52/ton CO2 emissions in 2020, increasing by 6% plus inflation each year

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels, and facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 tons of GHGs annually

Fee also applies to certain industrial sources, regardless of their emissions output, including aluminum production, HCFC-22 production and HFC-23 destruction, and fluorinated gas production; this fee starts as a percentage of the fossil fuel fee and increases annually

Fee continues until national GHG emissions are 80% below 2005 levels

The bill provides an annual tax credit for each individual; provides an equivalent benefit to individuals not eligible for the tax credit

Provides up to $10 billion in annual grants to states to be used to

(1) assist low-income and rural households with energy costs,

(2) support job training and worker assistance programs, and

(3) assist the state in climate change adaptation or transition to a low-carbon economy; this amount increases annually

No specific provisions

Imports of carbon-intensive goods subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the carbon price and (2) the comparable costs (e.g., GHG fees) imposed by the nation exporting the material

Exporters of energy-intensive goods may receive a refund related to the increased costs of inputs (i.e., fossil fuels) subject to the fee

Separate fee for fluorinated GHGs

Separate fee for GHGs (other than CO2 and fluorinated gas emissions) at facilities that (1) are subject to GHG reporting requirements in 40 C.F.R. Part 98 and (2) emit more than 25,000 mtCO2e emissions

Additional fee for GHG emissions (described as "associated emissions") resulting from venting, flaring, and leaking across the coal, natural gas, and petroleum supply chains (as determined by Secretary of the Treasury)

S. 2284
Coons
July 25, 2019

This proposal is identical to H.R. 4051 (Panetta)

Fee on fossil fuels based on their GHG content

Fee on solid biomass based on GHG content as determined by EPA, using a life-cycle analysis

Fee set at $15/mtCO2e emissions in 2020, increasing by $15 each year

If emission reduction targets are not met, fee increases by $30; if annual targets met, fee does not increase

Fee collected quarterly

Covered entities include petroleum refineries and importers, coal mines and importers, natural gas wells and importers, solid biomass combustion facilities

Emission reduction targets apply to emissions from covered fuels; starting in 2020, target equals 90% of 2017 levels, reaching 59% of 2017 levels in 2025 and 45% of 2017 levels in 2030; in subsequent years, the targets are reduced by 2.25% of 2017 emission levels each year

Fee ceases if emissions from covered fuels equal 10% of 2017 emission levels

Establishes a trust fund that receives appropriations equal to emission fee revenues collected in the Treasury; monies in the trust fund (after administrative expenses) are allocated as follows:

70% to provide monthly payments to eligible individuals (i.e., persons with a Social Security number or taxpayer identification number); adults get one share and children receive a half-share; payments are phased-out at certain income levels

20% to support existing and new infrastructure funding programs and other objectives

5% to the Department of Energy to support development of GHG mitigation technology and related technologies

5% to support transition assistance through new and existing programs

Directs the Department of Agriculture (in consultation with EPA) to provide payments for farmers and landowners for eligible sequestration activities; directs Department of Energy to provide payments for direct air capture of CO2 emissions; the funding source for these payments is not specified

Imports of carbon-intensive products subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the excess of (1) GHG emissions from production multiplied by the relevant U.S. emissions fee over (2) the total foreign product cost

Exporters of carbon-intensive products (and covered fuels) may receive a refund under an analogous formula

Separate fee for fluorinated GHGs set at 20% of fee for fossil fuel emissions

H.R. 4051
Panetta
July 25, 2019

This proposal is identical to S. 2284 (Coons)

Fee on fossil fuels based on their GHG content

Fee on solid biomass based on GHG content as determined by EPA using a life-cycle analysis

Fee set at $15/mtCO2e emissions in 2020, increasing by $15 each year

If emission reduction targets are not met, fee increases by $30; if annual targets met, fee does not increase

Fee collected quarterly

Covered entities include petroleum refineries and importers, coal mines and importers, natural gas wells and importers, solid biomass combustion facilities

Emission reduction targets apply to emissions from covered fuels; starting in 2020, target equals 90% of 2017 levels, reaching 59% of 2017 levels in 2025 and 45% of 2017 levels in 2030; in subsequent years, the targets are reduced by 2.25% of 2017 emission levels each year

Fee ceases if emissions from covered fuels equal 10% of 2017 emission levels

Establishes a trust fund that receives appropriations equal to emission fee revenues collected in the Treasury; monies in the trust fund (after administrative expenses) are allocated as follows:

70% to provide monthly payments to eligible individuals (i.e., persons with a Social Security number or taxpayer identification number); adults get one share and children receive a half-share; payments are phased-out at certain income levels

20% to support existing and new infrastructure funding programs and other objectives

5% to the Department of Energy to support development of GHG mitigation technology and related technologies

5% to support transition assistance through new and existing programs

Directs the Department of Agriculture (in consultation with EPA) to provide payments for farmers and landowners for eligible sequestration activities; directs Department of Energy to provide payments for direct air capture of CO2 emissions; the funding source for these payments is not specified

Imports of carbon-intensive products subject to a fee—determined by the Secretary of the Treasury—that is equivalent to the excess of (1) GHG emissions from production multiplied by the relevant U.S. emissions fee over (2) the total foreign product cost

Exporters of carbon-intensive products (and covered fuels) may receive a refund under an analogous formula

Separate fee for fluorinated GHGs set at 20% of fee for fossil fuel emissions

H.R. 3966
Lipinski
July 25, 2019

Tax on fossil fuels based on their potential CO2 emissions; tax rate set in 2020 at $40/short ton of CO2, increasing annually by 2.5% plus inflation; if GHG emissions target is met, the rate increases only by inflation

Tax imposed on manufacturers, producers, and importers of fossil fuels at first point of sale

GHG emissions target of 80% below 2005 levels

Net revenues from the tax on fossil fuels, imported products, and fluorinated GHGs support the following objectives:

10% used to increase monthly payments to Social Security beneficiaries

5% allocated to the Low-Income Home Energy Assistance program

1% allocated to the Department of Energy's weatherization assistance program

After these allocations, remaining revenues used to reduce the payroll tax rates that apply to employees and the self-employed

No specific provisions

Tax applies to specific imported products based on the lesser of the fossil fuels used during production or the CO2 emissions attributable to their production; eligible products based on a list of domestic industries (prepared by EPA) that, "in the aggregate, account for 95% percent of the taxable carbon substances used in the United States"

Exporters may receive a refund for fossil fuels and any other product with increased costs attributable to the new tax

Separate tax for fluorinated GHGs (based on metric tons of CO2e) set at 10% of the tax rate for fossil fuel emissions

Suspends enforcement of certain Clean Air Act GHG regulations; if EPA determines (in 2030 and every five years thereafter) that emission targets are not met, the enforcement suspension would cease and EPA must promulgate regulations to reduce emissions from covered fuels

H.R. 4058
Rooney
July 25, 2019

Tax on fossil fuels based on their potential GHG emissions, GHG emissions from specific industrial sources, and GHG emissions from specific products

Tax rate set in 2021 at $30/mtCO2e, increasing annually by 5% plus inflation; if covered emissions do not meet emission reduction schedule, the tax rate increases by an additional $3

Tax imposed on coal at coal mines and importers, petroleum products at refineries and importers, and natural gas at processors or at point of sale for combustion

Tax imposed on facilities—in specific industrial source categories—that emit more than 25,000 mtCO2e per year

Tax imposed on facilities that manufacture or import specified products or combust biomass with emissions above 25,000 mtCO2e

Emission reduction schedule for covered emissions starts in 2021 at 5,000 mmtCO2e; the annual emission schedule is cumulative, reaching 49,000 mmtCO2e in 2031; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to 4,200 mmtCO2e in 2031

Tax revenue supports the following objectives:

52.5% to offset a reduction in payroll tax rates that apply to employees, employers, and self-employed persons

7.5% to provide a payment to Social Security beneficiaries

7.5% to provide block grants to states to offset higher energy costs for low-income households

7.5% to support climate adaptation, carbon sequestration, energy efficiency, and research and development programs

No specific provisions

Imports of carbon-intensive goods subject to a border tax—determined by the Secretary of the Treasury—that is equivalent to the costs in comparable domestic manufactured goods (associated with the carbon tax)

Exporters of energy-intensive goods may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the tax

Establishes a conditional moratorium on Clean Air Act GHG regulations for stationary emissions sources (with some exceptions)

Creates a credit system, which phases out after five years, for persons making payments under existing state GHG reduction programs

H.R. 4142
Larson
Aug. 2, 2019

Tax on fossil fuels based on their carbon content

Tax set at $52/mtCO2 in 2020, increasing by 6% plus inflation each year

Tax applies to manufacturers, producers, or importers of coal, petroleum, and natural gas

No specific provisions

Establishes a trust fund that would receive appropriations equal to tax revenue received in the Treasury; the trust fund would provide annual funding for the following infrastructure programs:

$61 billion (plus the Highway Trust Fund shortfall) for highway (80%) and mass transit (20%);

$6.4 billion for the Transportation Investments Generating Economic Recovery program;

$4 billion for aviation;

$6.6 billion for passenger rail;

$8 billion for harbors, waterways, flood protection, and dams;

$8.4 billion for wastewater and drinking water;

$4 billion for broadband;

$3 billion for education infrastructure;

$1.5 billion for health care research and infrastructure;

$2 billion for the Public Housing Capital Fund;

$4.4 billion for Department of Energy research and development programs; and

$1.5 billion for Department of Agriculture climate-related research

In addition, the trust fund provides:

$7 billion annually for worker and community transition assistance, and

12.5% for an energy refund program that would provide monthly payments to households with incomes up to 150% of poverty line

Any remaining revenues support a consumer tax rebate for households with incomes up to 350% of the poverty line

No specific provisions

The Secretary of the Treasury shall impose a fee on imports of carbon-intensive goods; the fee will be equivalent to the cost that domestic producers incur due to the carbon tax; this fee expires if the exporting nation implements equivalent measures or if an international agreement requires equivalent measures

No specific provisions

H.R. 4520
Fitzpatrick
Sept. 26, 2019

Tax on fossil fuels based on their potential GHG emissions, GHG emissions from specific industrial sources, and GHG emissions from specific products

Tax rate set in 2021 at $35/mtCO2e, increasing annually by 5% plus inflation; if covered emissions do not meet emission reduction schedule, the tax rate increases by an additional $4

Tax imposed on coal at coal mines and importers, petroleum products at refineries and importers, and natural gas at processors or at point of sale for combustion

Tax imposed on facilities—in specific industrial source categories—that emit more than 25,000 mtCO2e per year

Tax imposed on facilities that manufacture or import specified products or combust biomass with emissions above 25,000 mtCO2e

Emission reduction schedule for covered emissions starts in 2021 at 4,900 mmtCO2e; the annual emission schedule is cumulative, reaching 48,800 mmtCO2e in 2031; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to 4,000 mmtCO2e in 2031

Establishes a trust fund that would receive appropriations equal to 75% of the tax revenue received in the Treasury; the trust fund would provide annual funding for the following infrastructure programs ("as provided in appropriations acts") between FY2021 and FY2030:

70% to the Federal Highway Trust Fund;

10% to the states as grants to allocate to low-income households;

4.2% for various energy-related research and development objectives, including carbon capture and storage and battery technology;

4.0% for frequent and chronic coastal flooding mitigation and adaptation infrastructure projects;

3.0% for displaced energy workers;

2.5% for the Airport and Airway Trust Fund;

1.5% for the Department of Energy weatherization program;

1.5% for the Abandoned Mine Reclamation Fund;

1.0% for the Reforestation Trust Fund;

0.5% to support agricultural GHG sequestration projects;

0.1% to decrease the environmental impact of renewable energy activities pursuant to Section 931 of the Energy Policy Act of 2005;

0.1% for the Leaking Underground Storage Tank trust fund

No specific provisions

Imports of carbon-intensive goods subject to a border tax—determined by the Secretary of the Treasury—that is equivalent to the costs in comparable domestic manufactured goods (associated with the carbon tax)

Exporters of energy-intensive goods may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the tax

Establishes a conditional moratorium on Clean Air Act GHG regulations for stationary emissions sources (with some exceptions)

Creates a credit system, which phases out after five years, for persons making payments under existing state GHG reduction programs

Creates a National Climate Commission to set five-year emission reduction goals between 2025 and 2050 and assess the effectiveness of federal policies in meeting these goals

H.R. 5457
Maloney
Dec. 17, 2019

Tax on fossil fuels based on their carbon content

Tax rate starts in 2020 at $40 per ton of carbon, which equates to approximately $11/tCO2 emissions; tax rate increases annually by a cost of living adjustment as defined in the bill

Tax imposed at coal mines and oil and gas wells and on fuels "entered into the United States"

No specific provision

Provides a $1,000 income tax credit for individuals and each of their dependents; tax credit phases out at adjusted gross income levels exceeding $314,000; tax credit and income phase-out level increases each year by a cost of living adjustment

No specific provisions

No specific provisions

No specific provisions

Source: Prepared by CRS.

Author Contact Information

Jonathan L. Ramseur, Specialist in Environmental Policy ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

GHGs in the atmosphere trap radiation as heat, warming the Earth's surface and oceans. The primary GHGs emitted by human activities (and estimated by EPA in its annual inventories) include CO2, methane, nitrous oxide (N2O), sulfur hexafluoride (SF6), chlorofluorocarbons, hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs). Other GHGs include carbonaceous and sulfuric aerosols, hydrochlorofluorocarbons, and elevated tropospheric ozone pollution generated by emissions of nitrogen oxides and volatile organic compounds, such as solvents.

2.

For the latest U.S. assessment of the human contribution to climate change, see Intergovernmental Panel on Climate Change, Global Warming of 1.5°C, Special Report, 2018; and U.S. Global Change Research Program, Fourth National Climate Assessment, vol. II: Impacts, Risks, and Adaptation in the United States, 2018. See also CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change, by Jane A. Leggett.

3.

Some countries have levied carbon taxes (or something similar) for over 20 years. For a review of carbon prices in other countries, see OECD, Effective Carbon Rates: Pricing CO2 through Taxes and Emissions Trading Systems, 2016, http://www.oecd-ilibrary.org/taxation/effective-carbon-rates_9789264260115-en; and the Carbon Tax Center website at http://www.carbontax.org/where-carbon-is-taxed.

4.

A number of U.S. states have taken action requiring GHG emission reductions. The most aggressive actions have come from California and from the Regional Greenhouse Gas Initiative (RGGI)—a coalition of nine states from the Northeast and Mid-Atlantic regions. The RGGI is a cap-and-trade system that took effect in 2009 that applies to CO2 emissions from electric power plants. (See CRS Report R41836, The Regional Greenhouse Gas Initiative: Background, Impacts, and Selected Issues, by Jonathan L. Ramseur.) California established a cap-and-trade program that took effect in 2013. California's cap covers multiple GHGs, which account for approximately 85% of California's GHG emissions. For more details, see the California Air Resources Board website, https://www.arb.ca.gov/cc/capandtrade/capandtrade.htm. In addition to its emissions cap, California has adopted a range of other climate change mitigation policies (e.g., renewable energy portfolio standards).

5.

Other approaches may include performance-based or technology-based standards (e.g., best available control technology). See CRS Report R41973, Climate Change: Conceptual Approaches and Policy Tools, by Jane A. Leggett.

6.

The 1990 Clean Air Act Amendments established a market-based cap-and-trade program to control the air emissions (sulfur dioxide and nitrogen oxides) that lead to acid rain. Although controversial at its inception, the program is widely considered a success. See, for example, Gabriel Chan et al., The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation, Harvard Environmental Economics Program, 2012, https://www.belfercenter.org/sites/default/files/legacy/files/so2-brief_digital4_final.pdf.

7.

See CRS In Focus IF10479, The Energy Credit: An Investment Tax Credit for Renewable Energy, by Molly F. Sherlock.

8.

See CRS Report R44902, Carbon Capture and Sequestration (CCS) in the United States, by Peter Folger.

9.

The House passed an identical resolution in the 114th Congress (H.Con.Res. 89).

10.

See CRS Report R40556, Market-Based Greenhouse Gas Control: Selected Proposals in the 111th Congress, by Larry Parker, Brent D. Yacobucci, and Jonathan L. Ramseur.

11.

H.R. 2454 (111th Congress), which was introduced by Representatives Waxman and Markey, would have covered approximately 85% of the U.S. GHG emissions. Although not complete coverage, this approach is typically described as economy-wide.

12.

See CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked Questions, by Richard K. Lattanzio, Linda Tsang, and Bill Canis.

13.

For more details, see CRS Report R44341, EPA's Clean Power Plan for Existing Power Plants: Frequently Asked Questions, by James E. McCarthy et al.

14.

For more details, see CRS Insight IN11142, EPA Repeals the Clean Power Plan and Finalizes Affordable Clean Energy Rule, by Kate C. Shouse and CRS Report R45393, EPA's Affordable Clean Energy Proposal, by Kate C. Shouse, Jonathan L. Ramseur, and Linda Tsang.

15.

In some instances, legislation would have directed EPA to establish a GHG emissions reduction program with a market-based approach as one option. An alternative approach to a market-based system might involve regulatory directives that require emission performance standards for specific sources or the application of best available control technology.

16.

A metric ton is approximately 2,205 pounds. A short ton equals 2,000 pounds.

17.

This term of measure (CO2e) is used because GHGs vary by global warming potential (GWP). GWP is an index developed by the Intergovernmental Panel on Climate Change (IPCC) that allows comparisons of the heat-trapping ability of different gases over a period of time, typically 100 years. Consistent with international GHG reporting requirements, EPA's most recent GHG inventory (2018) uses the GWP values presented in the IPCC's 2007 Fourth Assessment Report. For example, based on these GWP values, a ton of methane is 25 times more potent than a ton of CO2 when averaged over a 100-year time frame. The IPCC has since updated the 100-year GWP estimates, with some increasing and some decreasing. For example, the IPCC 2013 Fifth Assessment Report reported the 100-year GWP for methane as ranging from 28 to 36. EPA compares the 100-year GWP values in Table 1-3 of its 2018 GHG Inventory.

18.

Both the RGGI and California cap-and-trade systems allow offsets as a compliance option (see footnote 4).

19.

This differs from a price system that applies to energy content, such as a tax based on British thermal units (Btu). In 1993, President Clinton proposed a deficit reduction package that included a tax based on energy content, measured in Btu. The goals of the 1993 Btu tax proposal were to promote energy conservation and raise revenue. At the time, the proposed tax would have generated a new revenue stream of about $30 billion per year. The proposal was met with strong opposition and was not enacted; Congress ultimately enacted an approximately five-cent-per-gallon increase in the motor fuels taxes.

20.

See, for example, Alexander R. Barron et al., "Policy Insights from the EMF 32 Study on U.S. Carbon Tax Scenarios," Climate Change Economics, vol. 9, no. 1 (2018).

21.

EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks, 1990-2017, April 2019.

22.

See Table A-1 in CRS Report R45625, Attaching a Price to Greenhouse Gas Emissions with a Carbon Tax or Emissions Fee: Considerations and Potential Impacts, by Jonathan L. Ramseur and Jane A. Leggett.

23.

Congressional Budget Office, Options for Reducing the Deficit: 2017-2026, 2016.

24.

One GHG emission reduction bill was introduced in the 107th Congress. Senator Jeffords introduced S. 556, which would have amended the Clean Air Act to reduce CO2 emissions from electric power plants to below 1990 levels.