House Democrats have released draft carbon-pricing legislation, soliciting feedback on a potential per-ton fee for emissions, annual rate of fee increase, and revenue spending.

On March 12, 2013, House Democrats released a draft plan for carbon-pricing legislation that would impose a fee on greenhouse gas emissions from the nation’s largest polluters, such as power plants, oil refineries, and factories. The measure, which has the potential to address both climate change and budget deficit, aims to establish a system that would minimize compliance burden for polluting entities and reduce administrative costs. It would build on EPA’s existing program that requires major sources to report emissions. The Treasury Department would have the responsibility to collect carbon fees based on EPA emissions data.

The draft lays out several options to return revenues to the public, including energy rebates, reducing federal deficit, lowering tax liabilities for businesses and individuals, protecting interests of displaced workers, and investing in clean energy projects. It presents three per-ton pricing options – $15, $25, and $30 – and suggests a range of annual carbon fee increases from 2% to 8%. The bicameral group is also soliciting feedback on how a federal level program should interact with state level programs. The draft legislation is open for public comment until April 12, 2013.

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