Statement of Introduction of the Save Our Climate Act
MR. STARK: Mister Speaker, I rise today to reintroduce the Save Our Climate Act, a bill that will create a simple tax on carbon. A carbon tax is a straightforward way to reduce our dependence on fossil fuels, spur development of alternative energy, slow climate change, and decrease our deficit.
The impacts of climate change become more severe with each year we fail to act. The ten warmest years on record have all occurred since 1990. Extreme weather events like droughts, floods, and violent storms are becoming more common as the planet gets hotter.
Our continued addiction to burning fossil fuels not only accelerates climate change it is also a drag on our economy. We need a policy that discourages the use of fossil fuels and promotes investment in efficiency and alternative energy sources. The simplest solution is a carbon tax.
My legislation imposes a tax on each ton of carbon dioxide contained in a fuel. The tax is imposed upstream, at the point of manufacture or import where it is easiest to administer. No new bureaucracy will be needed.
The tax increases every year at a predictable rate so that the market, including investors and individuals can adjust to the tax and plan for the future. Unlike a cap and trade system, a carbon tax does not require a complicated trading market, auctions, or an exchange to function and it is insulated from speculation and volatile swings in pricing.
A steadily rising carbon tax will provide the certainty American businesses needs to make the long-term investments in new energy sources that will break our addiction to fossil fuels. The United States can be the leader in green energy. A carbon tax will help to unleash American innovation and create jobs. That is why economists across the ideological spectrum—from Arthur Laffer and Alan Blinder on the right, to Jeffrey Sachs and Joseph Stiglitz on the left—have endorsed the idea. Through border adjustments, my legislation will protect American manufacturers and ensure that imported goods from countries like China are not given an unfair advantage over American products.
At a time of deep budget cuts meant to reduce the deficit, a carbon tax can be part of the deficit solution. My legislation will dedicate $437 billion toward deficit reduction over 10 years. In addition, the Save Our Climate Act will protect families from increased energy prices. Revenue generated will be distributed back to individuals as a yearly dividend to all Americans. The average dividend in the first year of the bill would be $172 per person, rising to $761 in the fifth year and $1126 in the tenth year.
We have a moral obligation to act to prevent catastrophic climate change and preserve our planet for future generations. The Save Our Climate Act is a first step toward meeting that obligation and creating a sensible tax code that incentivizes innovation and rewards responsibility. I encourage all my colleagues to support it.
NEWS – CONGRESSMAN PETE STARK
239 Cannon House Office Building
Washington, DC 20515
FOR IMMEDIATE RELEASE
Tuesday, October 25, 2011
Sarah Baldauf, (202) 225-3202
Stark Introduces Carbon Tax Bill to Reduce Emissions, Deficit CBO Says Carbon Tax is Most Economically Efficient Way to Cut Carbon Emissions
WASHINGTON - Today, Congressman Stark (D-CA) announced the introduction of the Save Our Climate Act, H.R. 3242. This legislation would levy a carbon tax on fossil fuels in order to reduce our dependence on foreign oil, spur development of alternative energy, protect consumers from rising energy costs, mitigate climate change, and reduce our deficit.
The Carbon Tax Center estimates that over 10 years, the Save our Climate Act would raise more than $2.6 trillion in revenue and reduce carbon emissions by 25 percent. Over several decades, the legislation will reduce the United States' carbon emissions to 80 percent below the country's emissions levels in 1990, which is the level scientists say must be achieved to stabilize our climate.
"We have a moral obligation to act to prevent catastrophic climate change and preserve our planet for future generations," said Rep. Pete Stark. "The Save Our Climate Act is a first step toward meeting that obligation and creating a sensible tax code that incentivizes innovation, reduces the deficit, and protects families from rising energy costs."
How SOCA Works: The Carbon Tax would be similar to a sales tax levied on producers of fossil fuels at the first point of sale. For example, an importer or manufacturer that buys or imports coal, natural gas, or oil would pay a fee based on that fossil fuel's carbon dioxide content. The SOCA dedicates $490 billion toward deficit reduction over 10 years and distributes over $2 trillion in revenue back to consumers.
"Rep. Stark's bill dispels the fog that has enveloped climate policy by relying on price incentives and American ingenuity rather than caps or coercion," said Charles Komanoff, energy economist and director of the Carbon Tax Center. "The Save Our Climate Act picks no favorites, sets no artificial caps, and has no rigged trading system. Polluters will lose and middle-class families will win."
What SOCA Costs Purchasers: The tax would begin at $10 per ton of carbon dioxide content and would increase by $10 per ton each year until the United States reaches the carbon emissions goal.
“We’re running out of time to wean our nation off the fossil fuels that are heating up the planet,” said Citizens Climate Lobby Executive Director Mark Reynolds. “We need to put a price on carbon that shifts energy usage to clean sources, and that’s what Congressman Stark’s bill does.”
How SOCA Protects the Middle Class and U.S. Businesses: The majority of the revenue raised would be paid in a dividend to individuals in order to offset increased fuel and energy prices. The Carbon Tax Center projects that the second year after implementation, the average dividend would be $160 per person. This would rise to $590 in year five and $1,170 in year ten. In order to ensure that American businesses are not put at a disadvantage by the carbon tax, foreign companies selling carbon intensive goods in the U.S would also pay the carbon tax when their goods are imported into the country. Additionally, American companies that export carbon-based goods would have the carbon tax refunded.
“Our country is not broke and we should not be cutting teachers or delaying smog rules; we simply need banks and corporate polluters to pay their fair share," said Erich Pica, President of Friends of the Earth. "By introducing a financial transaction tax, and now a carbon tax, Representative Stark has taken the lead on reducing the deficit and strengthening our country.”
Why SOCA is preferable to a Cap and Trade System or EPA regulation:
• According to the Congressional Budget Office, a carbon tax is the most economically efficient option for reducing carbon emissions.
• Unlike a carbon tax, cap and trade would create more bureaucracy and require considerable revenue to administer. A carbon tax provides market incentives to reduce emissions and does not require business to engage in a complex permitting process, unlike regulating CO2 through the Clean Air Act.
• Under cap and trade, carbon prices are dictated by a volatile trading market; European carbon markets have experienced wild swings. Such price volatility hurts consumers and discourages investment in alternative energy sources. This is would not be the case with a carbon tax.
• Cap and trade systems require huge new markets that are susceptible to speculation. A carbon tax cannot be gamed and does not require a new trading market.
• Unlike with cap and trade, carbon tax revenue can easily be returned to the public through a dividend.