Market-Based Greenhouse Gas Emission Reduction Legislation: 108th Through 118th Congresses

January 25, 2019 – December 4, 2024 R45472

Market-Based Greenhouse Gas Emission Reduction Legislation: 108^th Through 118^th Congresses

Updated December 4, 2024

Congressional Research Service

https://crsreports.congress.gov

R45472

Congressional Research Service

SUMMARY

Market-Based Greenhouse Gas Emission Reduction Legislation: 108^th Through 118^th Congresses

Members of Congress have expressed a range of perspectives regarding climate change issues and the policy options that address greenhouse gas (GHG) emissions. For example, between the 112^th Congress and the 118^th Congress, Members introduced resolutions in either the House, Senate, or both chambers expressing the view that a carbon tax is not in the economic interests of the United States. During this same time period, a number of Members introduced proposals that would limit GHG emissions through market-based approaches.

Market-based approaches that address GHG emissions typically involve either 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 covered entities 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—GHG emissions levels or GHG emissions 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 108^th and 111^th Congresses, most of the introduced bills would have established cap-and-trade systems. Between the 112^th and 118^th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs. The proposals range in the scope of emissions covered from carbon dioxide (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.

Number and Type of Introduced GHG Emission Reduction Bills

108^th Congress through 118^th 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.

R45472

December 4, 2024

Jonathan L. Ramseur Specialist in Environmental Policy

Market-Based Greenhouse Gas Emission Reduction Legislation

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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 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.

• 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.

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Introduction ..................................................................................................................................... 1 Background ..................................................................................................................................... 3

What Is a GHG Emissions Cap-and-Trade System? ................................................................. 4

What Is a Carbon Tax or Emissions Fee? .................................................................................. 4

GHG Emission Reduction Legislation by Congress ....................................................................... 5

Figures

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

in 108^th Congress Through 118^th Congress ................................................................................... 3

Tables

Table 1. GHG Emission Reduction Proposals: 108^th Congress ....................................................... 7 Table 2. GHG Emission Reduction Proposals: 109^th Congress ..................................................... 10 Table 3. GHG Emission Reduction Proposals: 110^th Congress ..................................................... 17 Table 4. GHG Emission Reduction Proposals: 111^th Congress ..................................................... 27 Table 5. GHG Emission Reduction Proposals: 112^th Congress ..................................................... 35 Table 6. GHG Emission Reduction Proposals: 113^th Congress ..................................................... 37 Table 7. GHG Emission Reduction Proposals: 114^th Congress ..................................................... 40 Table 8. GHG Emission Reduction Proposals: 115^th Congress ..................................................... 46 Table 9. GHG Emission Reduction Proposals: 116^th Congress ..................................................... 58 Table 10. GHG Emission Reduction Proposals: 117^th Congress ................................................... 71 Table 11. GHG Emission Reduction Proposals: 118^th Congress ................................................... 84

Contacts

Author Information ........................................................................................................................ 92

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Introduction

Human activities, particularly fossil fuel combustion and industrial operations, have increased the atmospheric concentration of carbon dioxide (CO2) and other greenhouse gases (GHGs) since the late 1700s. In particular, the atmospheric concentration of CO2 has increased by 49%.¹ Climate science indicates 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 under way 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, if anything, to do about future climate change and related impacts.

Members of Congress have expressed a range of perspectives regarding climate change issues. For example, between the 112^th Congress and going through the 118^th Congress, Members introduced resolutions in either the House, Senate, or both chambers expressing the view that a carbon tax is not in the economic interests of the United States. In 2016, 2018, and 2024, the House passed resolutions expressing this perspective (H.Con.Res. 89, H.Con.Res. 119, and H.Res. 1085, respectively).

During this same time period, a number of Members introduced proposals that would limit GHG emissions through 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. 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.⁵ This report focuses on these types of approaches to address GHG emissions.

Other approaches involve a range of policy options, including performance-based or technology- based standards (e.g., best available control technology), public investment, and tax policies.⁶ Although not discussed in this report, Members have introduced multiple, nonmarket-based proposals that would have likely resulted in reductions in GHG emissions. Several of these

1 U.S. Environmental Protection Agency (EPA), “EPA’s Climate Change Indicators in the United States,” https://www.epa.gov/climate-indicators/climate-change-indicators-atmospheric-concentrations-greenhouse-gases.

2 See U.S. Global Change Research Program, Fifth National Climate Assessment, 2023, https://nca2023.globalchange.gov/; and Intergovernmental Panel on Climate Change, Climate Change 2023: Synthesis Report, Summary for Policymakers, 2023, https://www.ipcc.ch/report/sixth-assessment-report-cycle/.

3 Some countries have levied carbon taxes (or something similar) for over 20 years. For a review of carbon prices in other countries, see World Bank, State and Trends of Carbon Pricing 2024, 2024, https://openknowledge.worldbank.org/entities/publication/b0d66765-299c-4fb8-921f-61f6bb979087. For example, the European Union established a cap-and-trade program in 2005 and covers emissions from the electricity sector, selected energy-intensive industries, and aviation. For an additional source of country specific information, see Climate Action Tracker, https://climateactiontracker.org; and Climate Watch, https://www.climatewatchdata.org/.

4 In the United States, cap-and-trade programs operate in a number of states: California, Washington, and in the Regional Greenhouse Gas Initiative (RGGI), a program involving a number of Northeast states.

5 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.

6 See CRS In Focus IF11791, Mitigating Greenhouse Gas Emissions: Selected Policy Options, by Jonathan L. Ramseur et al..

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proposals were enacted, including tax incentives to promote renewable energy sources⁷ and carbon capture and sequestration efforts.⁸

In particular, on August 16, 2022, President Biden signed H.R. 5376 (P.L. 117-169), a budget reconciliation measure commonly referred to as the “Inflation Reduction Act of 2022” (IRA). IRA contains eight titles, each with some provisions that directly or indirectly address issues related to climate change, including reduction of GHG emissions or promotion of adaptation and resilience to climate change impacts.⁹ Among other provisions, IRA includes a charge on methane emissions from selected entities in the oil and gas industry. The methane emissions charge applies only to methane emissions from specific types of facilities that are required to report their GHG emissions to the Environmental Protection Agency’s (EPA’s) Greenhouse Gas Emissions Reporting Program. This charge is the first time the federal government has directly imposed a charge, fee, or tax on GHG emissions. In 2024, EPA issued a final rule to implement this authority.¹⁰ EPA is scheduled to begin collecting the fee in 2025.¹¹

This report provides a comparison of the legislative proposals from the 108^th through the 118^th 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. As Figure 1 illustrates, between the 108^th and 111^th Congresses, most of the market-based climate mitigation bills would have established cap-and-trade systems. In the 111^th Congress, Members offered multiple and varied proposals,¹² ultimately resulting in the House passage of H.R. 2454, an economy-wide cap-and- trade bill.¹³ A companion bill in the Senate (S. 1733, 111^th Congress) was ordered reported from the Committee on Environment and Public Works, but the bill was not 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. Between the 112^th and 118^th Congresses, most of the introduced bills would have established carbon tax or emissions fee programs.

The proposals in the 118^th 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.¹⁴

7 See CRS In Focus IF11316, A Brief History of U.S. Electricity Portfolio Standard Proposals, by Ashley J. Lawson.

8 See CRS Report R44902, Carbon Capture and Sequestration (CCS) in the United States, by Angela C. Jones and Ashley J. Lawson.

9 For more details, see CRS Report R47262, Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change, coordinated by Jonathan L. Ramseur.

10 EPA, “Waste Emissions Charge for Petroleum and Natural Gas Systems,” 89 Federal Register 5318, November 18, 2024.

11 For more information, see CRS Report R47206, Inflation Reduction Act Methane Emissions Charge: In Brief, by Jonathan L. Ramseur.

12 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.

13 H.R. 2454 (111th Congress), which was introduced by Reps. 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.

14 For more information, see 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.

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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 (108^th-118^th).

Figure 1. Number and Type of Market-Based GHG Emission Reduction Bills

Introduced in 108^th Congress Through 118^th 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.

Background

Over the last 20 years, broad GHG emission reduction legislation has often involved market- based approaches, such as cap-and-trade systems or carbon tax programs. Market-based approaches generally rely on private-sector choices and market forces to minimize the costs of emission reductions and spur innovation.¹⁵ Both carbon tax and GHG 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: GHG emissions levels or GHG emissions 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.

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.

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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

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

17 This term of measure 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 (with data from 2022) uses the GWP values presented in the IPCC’s 2013 Fifth Assessment Report. For example, based on these GWP values, a ton of methane is 28 times more potent than a ton of CO2 when averaged over a 100-year time frame. EPA’s inventory is available at EPA, “Inventory of U.S. Greenhouse Gas Emissions and Sinks,” https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks.

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

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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—74% 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.

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 108^th Congress to the 118^th Congress by including a separate legislative table for each Congress.²³ The tables compare the

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, 1990-2022, 2024.

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

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bills by their overall framework, scope, stringency, and selected design elements. Categories of comparison include the following:

• 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. For more information, see CRS Report R48247, Border Carbon Adjustments: Policy Considerations, Legislation, and Developments in the European Union, by Jonathan L. Ramseur, Kristen Hite, and Christopher A. Casey.

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

CRS-7

Table 1. GHG Emission Reduction Proposals: 108^th 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

S. 366 Jeffords Feb. 12, 2003

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

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

No specific provision

CRS-8

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

sulfur dioxide, nitrogen oxide)

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

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

H.R. 2042 Waxman May 8, 2003

Directs EPA to issue regulations to meet CO2 emissions goals; may include a market-based

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

CRS-9

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

approach; also addresses other air pollutants (mercury, sulfur dioxide, nitrogen oxide)

H.R. 4067 Gilchrest Mar. 30, 2004

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

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

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

Source: Prepared by CRS.

CRS-10

Table 2. GHG Emission Reduction Proposals: 109^th 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

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

Cap of 5,896 mtCO2e for covered sources by 2010 (equivalent to 2000 levels),

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

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

No specific provision

CRS-11

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

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

reduced by the level of emissions from non- covered sources

may use allowance to help energy consumers with increased prices and provide transition assistance to dislocated workers and communities, among other objectives

least 1.5% must come from agricultural sequestration

H.R. 759 Gilchrest Feb. 10, 2005

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

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

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

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

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

1990 CO2 levels for power plants by 2010

No specific provision No specific provision

No specific provision

CRS-12

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

pollutants (mercury, sulfur dioxide, nitrogen oxide)

and generate electricity for sale

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

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

S. 1151 McCain May 26, 2005

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

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

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

No specific provision

CRS-13

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

importer or producer of HFC, PFC, and SF6 that, when used, will emit over 10,000 mtCO2e

from non- covered sources

and provide transition assistance to dislocated workers and communities, among other objectives

agricultural sequestration

H.R. 2828 Inslee June 9, 2005

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

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

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

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

20% to electric power, fossil fuel production, and energy intensive industries 15% to states for worker transition assistance

Provides additional allowances for sequestration projects

No specific provision

CRS-14

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

from years prior to enactment, without reductions in subsequent years

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

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

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

Determined by the President based on plan submitted to Congress; sell via auction and distribute to non- covered sources to

No specific provision

EPA to promulgate additional regulations to reduce GHG emissions,

CRS-15

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

levels by 2050

achieve specified goals: maximize public benefit, mitigate energy costs to consumers, provide worker transition assistance, among others

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

CRS-16

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

electricity efficiency standards, and establish renewable energy portfolio standards

S. 4039 Kerry Sept. 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

Source: Prepared by CRS.

CRS-17

Table 3. GHG Emission Reduction Proposals: 110^th 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

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

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

Initially provided to covered entities at no cost; percentage of allowances sold via auction gradually

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

No specific provision

CRS-18

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

generators by 2020

increases: by 2036, 100% sold via auction; activities funded by auction revenues include technology development and energy efficiency

international credits

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

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

CRS-19

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. 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

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

S. 1177 Carper Apr. 20, 2007

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

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

CRS-20

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. 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

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

CRS-21

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

(declining to zero by 2017)

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

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;

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

In 2012: 40% of allowances allocated to covered electric utilities, industrial facilities, and coops 9% allocated to states for conservation, extra

Up to 15% of allowance requirement may be achieved through domestic offsets; international

International reserve allowances must accompany imports of any covered GHG- intensive goods and primary

Low carbon fuel standard for transportation fuels

CRS-22

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

and Public Works on Dec. 5, 2007

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

for covered sources)

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

offsets can satisfy an additional 15%

products to the United States Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

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-

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

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

International reserve allowances must accompany imports of any covered GHG- intensive goods and primary

Low carbon fuel standard for transportation fuels

CRS-23

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

relief measures if necessary

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

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,

satisfy an additional 15%

products to the United States Least developed nations or those that contribute no more than 0.5% of global emissions are excluded

CRS-24

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

low income and rural assistance, and adaptation activities, as well as program management

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

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

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

CRS-25

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

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

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

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 toward

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

EPA to promulgate regulations that address emissions in uncovered sectors

CRS-26

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

LNG); or, facilities that emit more than 10,000 mtCO2e of HFCs annually as a byproduct of HFC production

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

0.5% of global emissions are excluded

Source: Prepared by CRS.

CRS-27

Table 4. GHG Emission Reduction Proposals: 111^th 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

Not explicitly defined Target of 4.9 billion mtCO2e for covered

Oversight board administers auctions to manage the allowance price path; precise use of

No specific provision

CRS-28

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

price path between 2012 and 2019

entities by 2020

auction revenues is not specified

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

No specific provision

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

No specific provision

CRS-29

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

would receive an equal payment

steel, aluminum, and paper

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

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;

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

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

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

CRS-30

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

the House of Representatives, coordinated by Mark Holt and Gene Whitney

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

EPA, covered entities may use unlimited amount of international allowances from “qualifying programs”

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

S. 1733 Kerry-Boxer Sept. 30, 2009 Reported by the Committee on Environment and Public Works (a

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

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;

In 2016, approximately 35% of an entity’s allowance submission can comprise offsets; up to 75% of an entity’s offsets

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

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

CRS-31

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

“Manager’s Amendment” in the nature of substitute) on Nov. 5, 2009

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

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

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”

“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”

CRS-32

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

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

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

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,

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

CRS-33

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

2012; if reached, additional shares made available, and this revenue would support mitigation from non-covered entities

technology development, energy efficiency, biological sequestration, and deficit reduction

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

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

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

CRS-34

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

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

meeting the specific criteria

Source: Prepared by CRS.

CRS-35

Table 5. GHG Emission Reduction Proposals: 112^th 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)

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

CRS-36

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

Permits cannot be sold or traded Price floor and price ceiling (i.e., price collar), ranges between $6.25 and $18.75 in 2015

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

Source: Prepared by CRS.

CRS-37

Table 6. GHG Emission Reduction Proposals: 113^th 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

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

CRS-38

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

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

S. 2940 Whitehouse Nov. 19, 2014

Fee on fossil fuels based on their carbon

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported

Fee continues until national GHG emissions are

Fee revenue used to create the American Opportunity Fund, appropriations from

No specific provisions

Imports of carbon-intensive goods subject to a fee—

Separate fee for non- CO2 GHG emissions at facilities that (1) are subject to GHG

CRS-39

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

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

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

80% below 2005 levels

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

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

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.

CRS-40

Table 7. GHG Emission Reduction Proposals: 114^th 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)

No specific provision

CRS-41

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

subject to the fee

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

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

CRS-42

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

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%

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

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)

CRS-43

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

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

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

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

CRS-44

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

used to support other objectives, including energy efficiency

H.R. 4283 McNerney Dec. 17, 2015

Tax on fossil fuels based on their carbon content “of the life cycle emissions” Tax starts in 2016 at $15 per metric ton of CO2 emissions; tax rate increases annually by $10/ton; if emission targets are met, tax ceases to apply for four years; tax reapplies if subsequent targets not met

Tax imposed on producers, miners, or importers of fossil fuels

Tax ceases if life-cycle emissions from fossil fuels reach 50% below 2005 levels (as determined by the Secretary of the Treasury in consultation with EPA)

Tax revenue used to provide quarterly dividends to every person with a Social Security number

No specific provisions

Imports of goods containing or produced using fossil fuels subject to a carbon equivalency fee—determined by the Secretary of the Treasury—that is equal to the cost that U.S. producers of a comparable good incur as a result of the U.S. carbon tax; this fee expires if the exporting nation implements equivalent measures or if an international agreement requires equivalent measures

No specific provisions

CRS-45

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

Exporters of fossil fuels or materials that used fossil fuels during production or manufacture may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the carbon tax

Source: Prepared by CRS.

CRS-46

Table 8. GHG Emission Reduction Proposals: 115^th 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

Fee applies to coal at mines, petroleum at refineries, natural gas at processors, imported fossil fuels,

Fee continues until national GHG emissions

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

No specific provisions

Imports of carbon- intensive goods subject to a fee— determined by the Secretary of the

Separate fee for fluorinated GHGs

CRS-47

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

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

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

are 80% below 2005 levels

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

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

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

Fee applies to coal at mines, petroleum at refineries, natural gas at processors,

Fee continues until national GHG emissions

The bill reduces the highest tax rate on corporate income from 35% to 29%, provides an annual tax credit for each individual, provides

No specific provisions

Imports of carbon- intensive goods subject to a fee— determined by the

Separate fee for fluorinated GHGs

CRS-48

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

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

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

are 80% below 2005 levels

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

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

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

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:

No specific provisions

The Secretary of the Treasury shall impose a fee on imports of carbon- intensive goods; the fee will be

No specific provisions

CRS-49

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

2019, increasing by 2% plus inflation each year

$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

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

S. 2352 Van Hollen Jan. 29, 2018

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

Covered materials include crude oil, coal, natural gas, and products derived from

2020 limit: permits sold equal to 20% below 2005

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

EPA directed to promulgate regulations to address other GHG

CRS-50

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

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

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

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

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

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

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

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

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program; emissions “directly

CRS-51

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

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

(as reported on Energy Information Administration Form 176) and some natural gas processors

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

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 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

CRS-52

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

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

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 continues until national GHG emissions are 80% below 2005 levels

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

CRS-53

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

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

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;

No specific provisions

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

CRS-54

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

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

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

reduction goals between 2025 and 2050 and assess the effectiveness of federal policies in meeting these goals

H.R. 6928 McNerney Sept. 27, 2018

Tax on fossil fuels based on their carbon content “of the life cycle emissions” Tax starts in 2020 at $25 per

Tax imposed on producers, miners, or importers of fossil fuels

Tax ceases if emission targets are met; targets based on life- cycle emission reductions (as determined by EPA) from fossil

Establishes a trust fund that receives appropriations equal to carbon tax revenues received in the Treasury Subject to the appropriations process, tax revenue used to offset a corresponding reduction in individual income tax rates starting

No specific provisions

Imports of goods containing or produced using fossil fuels subject to a carbon equivalency fee— determined by the Secretary of the

No specific provisions

CRS-55

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

metric ton of CO2 emissions; tax rate increases annually by $10/ton; if emission targets are met, tax ceases to apply for four years; tax reapplies if subsequent targets not met

fuels below 2005 levels: 2025: 30% 2030: 40% 2035: 50% 2040: 70% 2050: 80%

in 2019; remaining revenues would be allocated as follows: 80% used to provide quarterly dividends to every person with a Social Security number 20% used to support a range of objectives, including: -worker transition assistance -rural energy assistance -technology-neutral research and development -electric grid innovation -infrastructure resilience -energy efficiency and conservation

Treasury—that is equal to the cost that U.S. producers of a comparable good incur as a result of the U.S. carbon tax; this fee expires if the exporting nation implements equivalent measures or if an international agreement requires equivalent measures Exporters of fossil fuels or materials that used fossil fuels during production or manufacture may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the carbon tax

CRS-56

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. 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

S. 3791 Coons Dec. 19, 2018

Fee on fossil fuels based on their GHG content

Covered entities include petroleum refineries and importers, coal mines

Emission reduction targets apply to fossil fuel

Establishes a trust fund that receives appropriations equal to emission fee revenues received in the Treasury; monies in the trust

No specific provisions

Imports of carbon- intensive products subject to a fee— determined by the

Separate fee for fluorinated GHGs set at 10% of fee for

CRS-57

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

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

and importers, natural gas deliverers, and some natural gas processors

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

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

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

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.

CRS-58

Table 9. GHG Emission Reduction Proposals: 116^th 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 importers

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 emission levels of covered fuels (500 million mtCO2e) and monthly dividend check reach certain levels

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 Directs Department of Energy to enter agreement with the National Academy of Sciences to study effects of the fee on emissions from biomass and resulting impacts on carbon sinks

CRS-59

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. 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

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

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

2020 limit: permits sold equal to 12.5% below 2005 U.S. CO2 emissions 2025 limit: permits sold equal to 30%

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

EPA directed to promulgate regulations to address other GHG emissions that are not covered by the permit program;

CRS-60

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

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 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

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

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

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 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

No specific provisions

CRS-61

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

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

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

(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

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

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

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

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

CRS-62

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

are not met, fee increases by $30; if annual targets met, fee does not increase Fee collected quarterly

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

payments is not specified

covered fuels) may receive a refund under an analogous formula

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

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

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

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

CRS-63

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

met, fee does not increase Fee collected quarterly

development of GHG mitigation technology and related technologies 5% to support transition assistance through new and existing programs

under an analogous formula

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% of the taxable carbon substances used in the United States” Exporters may receive a refund for fossil fuels and any other product with increased

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

CRS-64

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

costs attributable to the new tax

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 million mtCO2e; the annual emission schedule is cumulative, reaching 49,000 million mtCO2e in 2031; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to 4,200 million mtCO2e 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 applies to manufacturers, producers, or importers of coal,

No specific provisions Establishes a trust fund that would receive appropriations equal to tax revenue received in the Treasury; the trust fund

No specific provisions

The Secretary of the Treasury shall impose a fee on imports of carbon-

No specific provisions

CRS-65

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

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

petroleum, and natural gas

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

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

CRS-66

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

$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

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

Emission reduction schedule for covered emissions starts in 2021 at 4,900 million mtCO2e; the annual emission schedule is cumulative, reaching 48,800 million mtCO2e in 2031; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to

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;

No specific provisions

CRS-67

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

annually by 5% plus inflation; if covered emissions do not meet emission reduction schedule, the tax rate increases by an additional $4

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

4,000 million mtCO2e in 2031

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;

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

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

CRS-68

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

0.1% for the Leaking Underground Storage Tank trust fund

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

S. 4484 Durbin Aug. 6, 2020

Fee on fossil fuels and other selected GHG emission sources Fee on fossil fuels starts in 2022 at $25/mtCO2e, increasing annually by $10 plus inflation; if emission targets are not met, the

Fee imposed on coal at coal mines and importers, crude oil at refineries and importers, and natural gas at producing wells and importers; and select sources that emit 25,000 mtCO2e or more of CO2 or methane per year

Fee increases are based on emission targets; targets based on percentage reductions compared to emission levels from covered fuels and sources in 2018: 2030: 47% below 2018 2035: 60% below 2018 2040: 70% below 2018

Establishes a trust fund that receives appropriations equal to emission fees received in the Treasury; after subtracting fee rebates and, in the first 18 years, approximately $5.5 billion per year, the remaining funds are allocated approximately as follows during the first 10 years: 70% for direct payments to eligible individuals, phasing out at certain income levels;

No specific provisions

Directs EPA to enter agreement with the National Academy of Sciences to study effects of fee program

CRS-69

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

fee increases are greater Fee on other sources starts in 2024 Fee is delayed in 2022 and 2023 if unemployment rate is 5% or higher A rebate is provided for carbon capture, sequestration, and utilization activities, if certain conditions are met

2045: 80% below 2018 2050: 90% below 2018

5% to support agricultural and forestry sequestration activities; 10% for grants to eligible entities to support transition assistance to a lower carbon economy; 15% for a newly established Climate Change Finance Corporation to finance “clean energy” and climate change resiliency activities, including research and development and commercialization of technologies

the comparable costs imposed by the exporting nation Exporters of fossil fuels and carbon intensive products may receive a rebate based on the emissions fee and manufacturing costs attributable to the emissions fee

H.R. 8175 McNerney Sept. 4, 2020

Tax on fossil fuels based on the carbon content “of the life cycle emissions” Tax starts in 2021 at $25 per metric ton of CO2 emissions; tax rate increases annually by

Tax imposed on producers, miners, or importers of fossil fuels

Tax ceases if emission targets are met; targets based on life- cycle emission percentage reductions (as determined by EPA) from fossil fuels below 2005 levels: 2025: 30% 2030: 40% 2035: 50% below

Establishes a trust fund that receives appropriations equal to carbon tax revenues received in the Treasury Tax revenue used to offset a corresponding reduction in individual income tax rates starting in 2021; remaining revenues would be allocated as follows:

No specific provisions

Imports of goods containing or produced using fossil fuels subject to a carbon equivalency fee (determined by the Secretary of the Treasury) that is equal to the cost that U.S. producers of a comparable good incur as a

No specific provisions

CRS-70

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

$10/ton; if emission targets are met, tax ceases to apply for four years; tax reapplies if subsequent targets not met

2040: 70% 2050: 80%

80% used to provide quarterly dividends to every person with a Social Security number 20% used to support a range of objectives, including: -worker transition assistance -rural energy assistance -technology-neutral research and development -electric grid innovation -infrastructure resilience -energy efficiency and conservation

result of the U.S. carbon tax; this fee expires if the exporting nation implements equivalent measures or if an international agreement requires equivalent measures Exporters of fossil fuels or materials that used fossil fuels during production or manufacture may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the carbon tax

Source: Prepared by CRS.

CRS-71

Table 10. GHG Emission Reduction Proposals: 117^th 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. 1512 Pallone Mar. 2, 2021

Among a range of other climate mitigation provisions, requires states to prepare and submit to EPA a plan for achieving GHG emission reductions As part of their plans, states may adopt emission control strategies developed and administered by EPA, including emissions trading systems Establishes a “federal backstop” carbon fee in a state that does not submit an acceptable climate plan, as determined by EPA

Carbon fee applies to fossil fuel storage terminals and distributors; electric power generators; and sources that emit more than 25,000 mtCO2e Carbon fee amount determined by EPA, based on modeling analysis of the fee needed to achieve specific emission reduction targets

EPA to set emission reduction targets for CO2 and methane emissions from covered sources, so that the national GHG emissions targets are achieved, including a 2030 target of 50% reduction in GHG emissions compared to 2005 levels

Carbon fees used to fund a “Race to Net-Zero Grant Program,” which provides grants to sources that paid a carbon fee in the current or preceding fiscal year; grant used to support emission reduction efforts at covered sources

Offsets may be used by states as part of their state climate plans; EPA is to develop process for accounting for offsets; the type of offsets allowed is unspecified

No specific provisions

The Climate Leadership and Environmental Action for our Nation’s Future (CLEAN Future Act) includes a number of provisions that would directly or indirectly reduce GHG emissions, including a clean electricity standard, energy efficiency standards and incentives, among other approaches

CRS-72

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. 645 Whitehouse Mar. 9, 2021

Directs Secretary of the Treasury to estimate the methane (CH4) emissions and emission rates from each oil- and natural-gas- producing basin Fee starts in 2023 at $1,800/ton, increasing annually by 2% plus inflation

Fee imposed on each company that produces, gathers, processes, or transmits oil or natural gas Fee on CH4 emissions based on (1) proportion of oil or natural gas produced in a particular location, or (2) another method of measure proposed by a company and approved by the Secretary

No specific provisions

Transfers revenues from the fee on CH4 emissions to the National Fish and Wildlife Foundation to provide grants through the National Coastal Resilience Fund

No specific provisions

S. 685 Durbin Mar. 10, 2021

Fee increases are based on emission targets; targets based on percentage reductions compared to emission levels from covered fuels and sources in 2018: 2030: 45% below 2018

No specific provisions

Directs EPA to enter agreement with the National Academy of Sciences to study effects of fee program Directs the Council on Environmental Quality to develop carbon sequestration targets and

CRS-73

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

Fee on other sources starts in 2025 A rebate is provided for carbon capture, sequestration, and utilization activities, if certain conditions are met

2035: 60% below 2018 2040: 70% below 2018 2045: 80% below 2018 2050: 90% below 2018

approximately as follows during the first 10 years: 70% for direct payments to eligible individuals, phasing out at certain income levels; 5% to support agricultural and forestry sequestration activities; 10% for grants to eligible entities to support transition assistance to a lower carbon economy; 15% for a newly established Climate Change Finance Corporation to finance “clean energy” and climate change resiliency activities, including research and development

and (2) the comparable costs imposed by the exporting nation Exporters of fossil fuels and carbon-intensive products may receive a rebate based on the emissions fee and manufacturing costs attributable to the emissions fee

strategies for public and private land and water resources

CRS-74

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

and commercializatio n of technologies

H.R. 2307 Deutch Apr. 1, 2021

Fee on fossil fuels based on their GHG content Fee set at $15/mtCO2e emissions in 2021, 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 importers

Emission reduction targets apply to fossil fuel combustion emissions; starting in 2023, annual reductions of 5% of 2010 net GHG levels (287 million mtCO2e) between 2023 and 2030; annual reductions of 3% of 2010 net GHG levels (172 million mtCO2e) between 2031 and 2050 Fee ceases if emissions from covered fuels decrease to 10% of 2010 emissions from covered fuels (544 million mtCO2e) and monthly dividend check reach certain levels

No specific provisions

Imports of carbon-intensive products subject to a fee— determined by the Secretary of the Treasury— equal to the total carbon fee that would have accumulated upon the GHG content of the product if the product were produced in the United States; the Secretary may modify this fee based on mitigation efforts/costs in the country of export Exporters of carbon-intensive products (and covered fuels) may receive a refund based on

Directs Department of Energy to enter agreement with the National Academy of Sciences to study effects of the fee on emissions from biomass and resulting impacts on carbon sinks

CRS-75

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

fee levied before exportation

H.R. 2451 Newman Apr. 12, 2021 This proposal is identical to S. 685 (Durbin)

Fee on fossil fuels and other selected GHG emission sources Fee on fossil fuels starts in 2023 at $25/mtCO2e, increasing annually by $10 plus inflation; if emission targets are not met, the fee increases are greater Fee on other sources starts in 2025 A rebate is provided for carbon capture, sequestration, and utilization activities, if certain conditions are met

Fee increases are based on emission targets; targets based on percentage reductions compared to emission levels from covered fuels and sources in 2018: 2030: 45% below 2018 2035: 60% below 2018 2040: 70% below 2018 2045: 80% below 2018 2050: 90% below 2018

No specific provisions

Imports of carbon-intensive goods are 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 fee and (2) the comparable costs imposed by the exporting nation Exporters of fossil fuels and carbon intensive products may receive a rebate based on the emissions fee and manufacturing costs attributable to the emissions fee

Directs EPA to enter agreement with the National Academy of Sciences to study effects of fee program Directs the Council on Environmental Quality to develop carbon sequestration targets and strategies for public and private land and water resources

CRS-76

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

10% for grants to eligible entities to support transition assistance to a lower carbon economy; 15% for a newly established Climate Change Finance Corporation to finance “clean energy” and climate change resiliency activities, including research and development and commercializatio n of technologies

H.R. 3039 Fitzpatrick May 7, 2021

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 2023 at

Emission reduction schedule for covered emissions starts in 2023 at 4,900 million mtCO2e; the annual emission schedule is cumulative, reaching 47,100 million mtCO2e

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

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

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

CRS-77

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

$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

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

in 2033; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to 4,000 million mtCO2e in 2033

infrastructure programs (“as provided in appropriations acts”) between FY2023 and FY2032: 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;

goods (associated with the carbon tax) Exporters of goods that are both energy- intensive and trade-intensive may receive a tax refund related to the increased costs of inputs (i.e., fossil fuels) subject to the tax

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 2027 and 2052 and assess the effectiveness of federal policies in meeting these goals

CRS-78

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

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;

CRS-79

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

0.1% for the Leaking Underground Storage Tank trust fund

S. 2085 Whitehouse June 16, 2021

Fee on fossil fuels based on their carbon content and certain facilities for GHG emissions Fee set at $54/ton CO2 emissions in 2023, increasing by 6% plus inflation each year

Fee applies to coal at mines and importers, petroleum at refineries and importers, natural gas deliverers (as reported on Energy Information Administration Form 176) and some natural gas processors; 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-

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

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

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

CRS-80

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

22 production and HFC-23 destruction, and fluorinated gas production; this fee starts as a percentage of the fossil fuel fee and increases annually

economy; this amount increases annually

inputs (i.e., fossil fuels) subject to the fee

determined by Secretary of the Treasury)

H.R. 4084 Deutch June 23, 2021 This proposal is identical to S. 645 (Whitehouse)

No specific provisions

Transfers revenues from the fee on CH4 emissions to the National Fish and Wildlife Foundation to provide grants through the National Coastal Resilience Fund

No specific provisions

S. 4355 Whitehouse June 7, 2022

Imposes an emissions charge at certain facilities; charge based on a carbon price and

Domestic charge applies to facilities that are required to report GHG emissions to the EPA’s GHG

No specific provisions

Allocates 75% of the emissions charge revenues to the Department of the Treasury to

No specific provisions

Imports of carbon-intensive goods (“primary goods”) are subject to a charge based on

No specific provisions

CRS-81

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

the degree to which a facility’s carbon intensity exceeds the intensity of the relevant industrial sector Carbon intensity is a measure of “covered emissions” divided by total weight of primary goods produced Carbon price starts in 2024 at $55, increasing annually by 5% plus inflation Directs the Department of the Treasury to establish a reporting program for facilities to provide data for calculating their carbon intensity (e.g., process emissions, electricity use, weight of primary

Reporting Program (40 CFR Part 98) and produce primary goods in specific industries, including petroleum and natural gas extraction; underground coal mining; iron and steel; chemical manufacturing; among other industrial sectors

establish and implement a competitive grant program to eligible entities for investments in technology that reduce their carbon intensity; authorizes Treasury to “recapture” grant funds under certain conditions Allocates 25% of the revenues to the Department of State for multilateral assistance to support climate and clean energy programs

the domestic carbon price and the difference in carbon intensities between the imported good and the carbon intensity of the relevant U.S. industrial sector; the default measure of carbon intensity for imported goods is the exporting country’s gross domestic product divided by total production-based emissions; under certain conditions, the Department of the Treasury determines the intensity measure for the relevant industrial sector in the exporting country (emissions divided by total weight of product

CRS-82

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

goods produced); data to be reported by June 30, 2025

in that sector); alternatively, an importer may submit a petition supporting a carbon intensity specific to a particular manufacturer in the exporting country Charge on imported goods paid by entity that imports the goods Primary goods produced in a “relatively least developed country” are excluded from the import fee U.S. facilities that export covered materials can seek refund based on payment of the domestic charge

Source: Prepared by CRS.

CRS-83

Notes: This table does not include two proposals in the 117^th Congress (S. 2378 and H.R. 4534) that would have established a border carbon adjustment framework for imported carbon-intensive materials. These proposals are not included in the above table because the bills would not have established a direct carbon price on domestic emissions or their inputs. The proposed border carbon adjustment mechanisms would have been based on “domestic environmental costs,” which included existing Clean Air Act regulations, among other costs.

CRS-84

Table 11. GHG Emission Reduction Proposals: 118^th 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. 5744 Carbajal Sept. 27, 2023

Imposes a domestic fee on fossil fuels based on the fuel’s GHG emissions content Fee starts at $15 per mtCO2e and increases annually by inflation plus $10/mtCO2e; fee increases by $15/ mtCO2e if certain emissions targets are not met; fee ceases if total GHG emissions from fossil fuels decrease by 90% compared to 2005 levels Provides a rebate for fuels used on a farm and for fuels or their derivatives used by U.S. Armed Forces; and provides a rebate for specific carbon capture and sequestration activities

Fossil fuels used, sold, or transferred at “covered entities,” which include coal mines, petroleum refineries, and specific natural gas distribution entities Import fee applies to fossil fuels and carbon- intensive products, including

• iron and steel; • aluminum; • cement; • glass; • pulp and paper; • chemicals; and • industrial ceramics Directs the Department of the Treasury (Treasury), in consultation with EPA, to add more products through a regulatory process

Between 2025 and 2030, annual GHG emissions reduction targets of 8% of net GHG emissions in 2005 (equates to 536 mtCO2e); between 2031 and 2050, annual GHG emissions reduction targets of 2.5% of net GHG emissions in 2005 (equates to 167 mtCO2e)

Revenues from domestic fee appropriated to Carbon Dividend Trust Fund, which provides monthly payments to eligible individuals Revenues collected from the import fee “supplement appropriations” to the U.S. Customs and Border Protection; and support the Green Climate Fund, established in 2021 through the United Nations Framework Convention on Climate Change

No specific provisions

Fee on imported fossil fuels equates to the domestic fee on fossil fuels BCA imposes a fee on imported carbon-intensive products Treasury determines whether to reduce a fee on imported materials based on explicit GHG emissions prices imposed in the exporting country BCA provides a credit or refund to exporters of covered fuels and exporters of carbon-intensive products

No specific provisions

CRS-85

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. 3422 Whitehouse Dec. 6, 2023

Imposes a domestic emissions charge at certain facilities, based on the degree to which a facility’s carbon intensity exceeds the intensity of the relevant industrial sector The charge increases over time, based on the degree of intensity exceedance Treasury determines the carbon intensity for covered industries; covered entities would be allowed to petition for a different carbon intensity of a specific good The domestic carbon price would start at $55, increasing annually by 5% plus inflation

The domestic charge applies to facilities required to report GHG emissions to the Environmental Protection Agency (EPA) GHG Reporting Program (40 C.F.R. Part 98) and produce primary goods in covered national industries (as defined in the bill), including

• petroleum and

natural gas extraction;

• surface coal mining; • underground coal

mining;

• iron and steel; • aluminum; • chemical

manufacturing;

• pulp and paper; • paperboard mills; • petroleum

refineries;

• asphalt; • glass; • hydrogen

production;

No specific provisions

Allocates 75% of domestic fee and BCA revenues to Treasury to establish and implement a competitive grant program to eligible entities for investments in technology that reduce their carbon intensity; authorizes Treasury to “recapture” grant funds under certain conditions Allocates 25% of domestic fee and BCA revenues to the Department of State for multilateral assistance to support climate and clean energy programs

No specific provisions

Imports of carbon- intensive goods (and finished goods) subject to a charge based on the domestic carbon price and the difference in carbon intensities between the imported good and the carbon intensity of the relevant U.S. industrial sector The import charge applies to primary goods imported into the United States from the same industries subject to the domestic fee Carbon intensity defined as a measure of “covered emissions” from a facility divided by total weight of primary goods produced at the facility Treasury determines the intensity measure

No specific provisions

CRS-86

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

• adipic acid

production;

• ethyl alcohol; • nitrogenous

fertilizers; and

• petrochemicals

for the relevant industrial sector in the exporting country (emissions divided by total weight of product in that sector) An importer can submit a petition supporting a carbon intensity specific to a particular manufacturer in the exporting country

H.R. 6622 DelBene Dec. 6, 2023 This proposal is identical to S. 3422 (Whitehouse)

• petroleum and

natural gas extraction;

• surface coal mining;

No specific provisions

CRS-87

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

intensity of a specific good The domestic carbon price would start at $55, increasing annually by 5% plus inflation

• underground coal

mining;

• iron and steel; • aluminum; • chemical

manufacturing;

• pulp and paper; • paperboard mills; • petroleum

refineries;

• asphalt; • glass; • hydrogen

production;

• adipic acid

production;

• ethyl alcohol; • nitrogenous

fertilizers; and

• petrochemicals

Allocates 25% of domestic fee and BCA revenues to the Department of State for multilateral assistance to support climate and clean energy programs

industries subject to the domestic fee Carbon intensity defined as a measure of “covered emissions” from a facility divided by total weight of primary goods produced at the facility Treasury determines the intensity measure for the relevant industrial sector in the exporting country (emissions divided by total weight of product in that sector) An importer can submit a petition supporting a carbon intensity specific to a particular manufacturer in the exporting country

H.R. 6665 Fitzpatrick Dec. 7, 2023

Imposes a tax on GHG emissions from fossil fuels, specific industrial

The tax applies to fossil fuels and GHG emissions from facilities—in specific

Emission reduction schedule for covered

Establishes a trust fund that receives appropriations equal to 75% of

No specific provisions

Imposes a tax on certain imported goods (as determined by

Establishes a conditional moratorium on Clean Air Act

CRS-88

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

sources, and specific products The tax rate starts (in 2025) at $35 per mtCO2e, increasing annually by 5% plus inflation; if covered emissions do not meet emissions reduction schedule, the tax rate increases by an additional $4 per mtCO2e Repeals specific existing taxes on fuels, including gasoline and aviation fuel

industrial source categories—that emit more than 25,000 mtCO2e per year, including

• iron and steel; • underground coal

mining;

• coal processing; • petroleum refineries; • cement; • petrochemicals; • lime; • ammonia; • aluminum; • soda ash; • ferroalloy; • phosphoric acid; • glass; • zinc; • petroleum and

natural gas extraction;

• lead; • magnesium; • nitric acid; • adipic acid; • semiconductor

manufacture; and

• electrical

transmission and distribution

emissions starts in 2025 at 4,700 million mtCO2e; the annual emission schedule is cumulative, reaching 47,100 million mtCO2e in 2035; assuming annual emission levels followed this decreasing schedule, covered emissions would decrease to 4,000 million mtCO2e in 2035

the bill’s tax revenue, including both the domestic tax and the BCA tax revenue (the bill does not provide a specific allocation for the remaining 25% of revenue) “As provided in appropriations acts,” the trust fund provides annual funding for the following infrastructure programs between FY2025 and FY2034:

• 70% to the

Federal Highway Trust Fund;

• 10% to states

for grants to low-income households;

• 4.2% for

various energy- related research and

Treasury); the tax is equivalent to the costs (associated with the domestic tax) on comparable domestic manufactured goods Covered goods include those that meet specific GHG emissions intensity and trade intensity thresholds (as determined by Treasury) The bill authorizes the use of certain sources of data, and, in certain situations, authorizes Treasury to use the “best available data” and “economic and engineering models” to make specific determinations The bill provides a rebate to exporters of goods that are both energy- intensive and trade- intensive; the rebate is based on the

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 2029 and 2054 and assess the effectiveness of federal policies in meeting these goals

CRS-89

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

The tax also applies to facilities that manufacture or import specified products or combust biomass with emissions above 25,000 mtCO2e

development objectives;

• 4.0% for

mitigation and adaptation infrastructure projects;

• 3.0% for

displaced energy workers;

• 2.5% for the

Airport and Airway Trust Fund;

• 1.5% for a

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

increased costs of inputs (i.e., fossil fuels) subject to the domestic tax

CRS-90

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

sequestration projects;

• 0.1% to

decrease the environmental impact of renewable energy activities; and

• 0.1% for the

Leaking Underground Storage Tank Trust Fund

S. 5107 Durbin Sept. 19, 2024

Imposes a fee on fossil fuels and selected GHG emissions sources Fee on fossil fuels starts in 2026 at $65/mtCO2e, increasing annually by $10 plus inflation; if specified emission targets are not met, the fee increases are greater Fee on other sources starts in 2028 Provides a conditional rebate for carbon capture, sequestration, and utilization activities

Fee applies to coal at coal mines and importers, crude oil at refineries and importers, and natural gas at producing wells and importers Fee also applies to sources in the “energy and industrial sectors” that emit 25,000 mtCO2e or more of CO2 or methane per year

Fee increases are based on emission targets; targets based on percentage reductions compared to emission levels from covered fuels and sources in 2018:

• 2030: 45%

below 2018

• 2035: 60%

below 2018

• 2040: 70%

below 2018

Establishes a trust fund that receives appropriations equal to fees received in the Treasury from the domestic fees and import fees Allocates expenditures during the first 10 years as follows:

• 70% for direct

payments to eligible individuals, phasing out at

No specific provisions

Imports of carbon- intensive products subject to a fee (determined by Treasury) that is equivalent to the difference in (1) costs domestic producers of comparable products incur due to the fee and (2) the comparable costs imposed by the exporting nation The bill defines carbon-intensive products to include

CRS-91

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

• 2045: 80%

below 2018

• 2050: 90%

below 2018

certain income levels;

• 5% for

agricultural and forestry sequestration;

• 10% for grants

to support transition assistance to a lower carbon economy;

• 15% for a

newly established Climate Change Finance Corporation to finance “clean energy” and climate change resiliency activities

• iron, steel, and

steel mill products;

• aluminum; • cement; • glass; • pulp and paper; • chemicals; and • industrial

ceramics

Treasury authorized to add more products to the above list

Source: Prepared by CRS. Notes: This table does not include two proposals in the 118^th Congress (S. 3198 and H.R. 8962) that would establish a border carbon adjustment framework for imported carbon-intensive materials. These proposals are not included in the above table because the bills would not establish a direct carbon price on domestic emissions or their inputs.

Market-Based Greenhouse Gas Emission Reduction Legislation

Congressional Research Service R45472 · VERSION 25 · UPDATED 92

Author Information

Jonathan L. Ramseur Specialist in Environmental Policy

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

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