Biden needs to have a plan on day one that addresses quite a lot of critical issues. There is too much risk in focusing first on Covid—as urgent as that is—without also addressing the other critical issues, primarily climate change. That is why this bill stands a chance of passage—because Republicans will be able to support getting much needed Covid relief to their constituents, without needing to take it directly from the Treasury. Given that funds must go to millions of Americans who are at risk of eviction and starvation from the economic shut-down, this timely introduction of the long-discussed revenue-neutral carbon tax plan provides a very valuable service to the U.S. Government. Additionally, in this case, this is not a tax but a fee on polluters. And it can be designed in such a way that it is seen more as a revival and upgrade to the Clean Power Plan and less as the passage of the Energy Innovation and Carbon Dividend Act, which was likely seen as a frontal attack on fossil fuels by themselves. By making all businesses subject to the fee, the burden is spread around more broadly but also less onerously. This means that each business experiences a much smaller direct hit—dependent solely on its level of emissions. Cumulatively, each layer of fee brings the total fees charged for a ton of SOX, NOX, CO2 or methane to a level high enough to make a difference. Fees will also be levied on the most damaging emissions from industry, whether they impact health or climate change, will not matter, as this bill puts an end to the externalization of the costs of industrial waste emissions of significant pollutants on the environment.
This proposal was the result of an ephiphany that came from simply connecting the urgent need for funding with the funding structure contained in the proposed plan for taxing carbon carbon in a "revenue-neutral" way. By combining and crafting this legislation to be broader and more egalitarian, Biden can address many critical issues at once.
This is a proposal for legislation called Clean Air Relief Act that addresses most of the most pressing issues facing America: the need for immediate Covid relief, economic stimulus to help restart the economy, ensuring better air quality and reduced healthcare costs, while also addressing climate change. This approach provides a funding mechanism for ongoing Covid relief stimulus payments that, importantly, does not further increase the U.S. deficit but instead aligns incentives and provides relief according to responsibility and need.
What we propose is rather simple: the U.S. will update and upgrade the Clean Air Act, originally passed in 1970 but which is now very burdened with regulations. Additionally, it employs the "revenue-neutral" concept embodied in HR 763, the Energy Innovation and Carbon Dividend Act and returns the fees collected from polluters for their emissions to the most impacted Americans. Included in pollutants that emitters pay a fee for are the family of greenhouse gases that the Supreme Court agreed are harmful emissions. Unlike as proposed in HR 763, payments shall be issued only to those with income/assets below a certain level (such as $200,000/yr), providing broader payments to those most impacted by Covid (ie. many more individuals than was covered by the CARES Act) and thus yielding a more robust economic stimulus.
Polluter fees will be set low initially but will increase annually to reach the level equal to the real cost of capturing and cleaning up those emissions within a few years. This will simplify the economics and make air polluters individually motivated to reduce their own pollution in the first place. Those emitting CO2, methane and other greenhouse gases will be included in the broader group of polluters—rather than singled out by a "carbon tax" that just applies to greenhouse gases. The monthly stipend provided by this "revenue-neutral" approach will enable the broadest class of consumers to receive more than the extra they will pay as end users of polluting products but it will also incentivize them to switch to cleaner products, which will increasingly cost less.
With one comprehensive regulation, Biden will
simultaneously reduce toxic pollution that impacts health, reduce
pollution-related diseases and reduce healthcare costs. He will also reduce
emissions of CO2 and other greenhouse gases and effectively level
the playing field in the energy sector that is vital for addressing climate
change. If done properly, clean air regulations become less burdensome and bureaucratic
and more rational and thus reduce risk and align corporate incentives improving
returns. Meanwhile, funds distributed will support those who have lost jobs,
keep them in their homes but give them the resources they need to kick-start
The CARA fee will be paid only so long as pollution emissions continue. How long it lasts will depend upon whether companies clean up their acts, providing exactly the type of alignment of incentives and continuing stipend from the government to cover short-term Covid relief needs, allow the U.S. economy to recover yet commencing the transition to a clean economy. Most importantly, by including CO2 and other greenhouse gases, the U.S. de-risks the economy by putting a clear "price" on carbon in a way that conservative Republicans can approve, since it allocates responsibility appropriately and simplifies regulation in the process, while limiting government growth.
APPROVE INTERIM SUPPORT NOW
Biden can urge Nancy Pelosi to accept McConnell's inadequate Covid stimulus proposal now, to speed $900 billion to Americans who need these funds to feed themselves and stay in their homes this winter. Instead of holding out for more money now, they should negotiate to have funds distributed along with a requirement that the recipient agree to the CDC's Covid protection guidelines, including mask wearing and social distancing. This requirement will go a long way in reducing the actual spread of the disease.
SET THE STAGE FOR A LONGER-TERM SOLUTION
By issuing insufficient support to Americans this winter, there will pent-up demand from the public for more stimulus payments, especially if there are massive numbers of evictions starting. Biden and his team should work to set the stage for a big, longer-term relief program, so that the public is reassured. By the time the inauguration arrives, people will be anxious to hear what Biden has in store to help them. Once they hear the plan, it will be wildly popular, because there is nothing for the public not to like about it. The optics will favor passage, as it will be industrial polluters protesting paying for their externalized toxic waste vs. voters being evicted. This will put more pressure on Republicans to support the legislation, and it will likely appeal to moderate Republicans who seek to see their constituents provided with more support. Biden can then come into office with sweeping changes to fifty year-old clean air legislation, that is actually quite moderate, fair and egalitarian, which will make it extremely hard for Republicans to refuse.
APPEAL TO BUSINESSES TO SUPPORT THIS SOLUTION
Businesses have become increasingly aware of their need to address climate change and Covid, and many have made commitments to address their emissions in the absence of clear governmental response. Now Biden can rally their support for a sensible, economy and environmental-saving piece of legislation. By appealing to business leaders to support this solution, Biden is giving all businesses a role in transforming the economy. By not demonizing the fossil fuel industry by itself, Biden will reduce opposition in part by being more egalitarian, reasonable and bringing a practical approach to addressing the damage done by the removal of environmental protections by the Trump presidency. Biden will announce that there will be an across-the-board implementation of a fee for all businesses with direct emissions from their activity or from their products. The fees will be levied on both toxic and GHG-types of emissions. While the assessed fees will be low on a per ton basis, they will be applied to all businesses with emission, so that all corporate emitters pay the fee on any and all pollutants that they emit, so they are directly motivated to invest in ways to reduce their own emissions.
EXPAND COVID RELIEF TO MORE AMERICANS
Trump's Covid relief went only to those earning $75,000 or less. We propose that this new stimulus dividend payment be distributed more broadly and go to those Americans earning less than $200,000 or those with less than $1 million in investible assets. This will be a substantially larger class of citizens (namely those deemed "non-sophisticated investors"). As a stimulus that reaches more broadly, this payment will put money into the hands of those who are most likely to spend it and boost economic activity. This ongoing stipend will actually gradually lessen the severity of income disparity, improve quality of life for those barely making ends meet, while helping most all businesses recover, because many more consumers will be able to purchase goods and services.
COMMENCE THE IMMEDIATE TRANSITION TO CLEANER FUELS AND PROCESSES
The pollution fee, though starting at a low level, will start to reduce toxic air pollution and the emissions that cause climate change. It will motivate emitters to switch to clean energy alternatives, plug leaks and fund better pollution scrubbers, filters as well as carbon capture technologies, knowing that the fees will increase rapidly over time. It will kick-start the growth of the CCUS sector—increasing commercial demand for capture technologies—and will enable clean energy technologies to finally compete on a level playing field with fossil fuels, which is key to eliminating emissions. Industrial factories including agricultural farms will be motivated to clean up their acts as well. Overall, this will help to vastly reduce the incidents of air-pollution-related diseases and lower healthcare costs over time.
AUTOMATION & TRANSPARENCY
The EPA will implement a fee schedule and simple electronic assessment and collection system. The EPA will do a basic assessment of the likely pollution fees owed by every company for all of its specific emissions. Then it will be the company's responsibility for confirming or contesting the amount through an emissions certification form, in which they self-report the amount of their emissions. Their claim and their form must be signed off on by an emissions assessor and all submissions will be public information. The EPA will train and register troops of new professional assessors who will be paid a reasonable fee based upon EPA fee schedule. This will create a lot of new jobs. Any company whose certification is later found to be inaccurate by a large amount, will be assessed a penalty fine. The collection of such penalties will fund the EPA's administrative costs. The public will also be able to review the reports and contest those that are not accurate based upon the public's use of monitoring sensors, which will spur EPA audits.
CREATE EDUCATION TRUSTS FOR MINORS
Qualifying Americans will include minor children. Minors will qualify for a full share of the distribution but their share (or a large percentage of their share) will be put into a trust account on their behalf, to be used either for their college education or healthcare costs. This provision will help Democrats fulfill their desire to make college education free, reduce healthcare costs for the nation's youth. To the extent that these children have grown up in the shadow of toxic emissions, their receipt of the stipend will go a long way to reverse environmental injustice.
ENSURE SUCCESS BY PUBLISHING SCHEDULE OF FEE INCREASES
The EPA will set out a schedule of pollution fees for approximately 200 harmful emissions that will start quite low but grow rapidly. The fee will quickly rise to the level of the actual cost of removing that substance from the environment it was released into but escalate beyond that level, which will be the equilibrium point at which it becomes less expensive for the polluter to prevent the pollution in the first place. Then, pollution emission levels will truly decline. This will ensure success in bringing emissions down as well as serve to reduce the risks of carbon pricing shocks to the markets. This approach and a schedule of fee hikes will allow the markets to work through the transition in an orderly way, allowing all investors to receive the fee escalation plan and to invest in our clean energy future accordingly.
BORDER FEES WILL BE COLLECTED
To prevent the importation of products at lower costs which have not had the fee charged, the EPA will apply a net fee at the border to any products imported into the U.S. (to achieve price parity) and will create international aid accounts that will fund aid to groups within those countries working to address and limit their emissions.