Florida Representative Carlos Curbelo is planning to introduce a tax reform bill on Monday that would replace the federal gasoline tax with a carbon tax. It would add three to 11 cents to a gallon of gas, for example, and use the extra proceeds to bolster the nation’s ailing infrastructure.
The carbon tax wouldn’t just apply to gasoline, though, but all fossil fuel uses, including power plants, refineries, steel mills, and concrete plants. The broader base would help raise $57–106 billion a year in additional money for infrastructure projects. The upper end of the range would almost cover the projected shortfall of the Highway Trust Fund, which the Congressional Budget Office projects will be $111 billion in the red by 2026.
The bill would tax carbon at a rate of $24 per metric ton and would rise 2% every year in addition to inflation. That would be sufficient to drive down carbon emissions, according to an analysis from the Center on Global Energy Policy at Columbia University and the consulting firm Rhodium Group. If the carbon tax were to start higher, though, emissions would fall faster and further and the additional revenues could go toward cutting other taxes, reducing the budget deficit, or even direct rebates to taxpayers.
Here’s Timothy Puko, reporting for the Wall Street Journal:
“This is designed ambitiously,” Mr. Curbelo said in an interview. “For some it will be a clean energy bill. For some it will be an infrastructure bill. … For others, it will be the bill that saves the planet. And all of those characterizations will be accurate.”
Curbelo, who represents a handful of Miami suburbs as well as the Florida Keys, is realistic about the bill’s prospects. Ahead of his bill’s introduction, for example, Louisiana Representative Steve Scalise has proposed a resolution that would undermine Curbelo’s efforts.
Even if Curbelo’s bill doesn’t pass, the idea of a carbon tax probably isn’t going anywhere. Other conservative groups and major corporations, including utility companies and oil supermajors ExxonMobil, BP, and Shell, have all endorsed the idea of a carbon tax.