Two carbon tax bills have been introduced in Ways & Means (the U.S. House committee that originates tax legislation): Stark-McDermott, filed in April 2007, and Larson, filed in August. Since September, Rep. John Dingell has floated a proposal for a hybrid tax combining a carbon tax with an additional tax on gasoline and jet fuel. Dingell's office is polling the public for comments, and he is expected to file his bill before the end of the year.

Democrat Fortney "Pete" Stark, Ways & Means' second-most senior member, and Rep. Jim McDermott (D-Wash.), now in his 10th term, filed their carbon-tax bill on April 26. Their Save Our Climate Act would impose a $10 per ton (of carbon) charge on coal, petroleum and natural gas when the fuel is either extracted or imported. The charge would increase by $10 every year until U.S. carbon dioxide emissions have dropped 80 percent from 1990.

Rep. John B. Larson, a 5th-term Democratic representative from Hartford, CT, introduced his American Energy Security Trust Fund Act in August. The Larson bill would tax emissions of carbon dioxide at $15/ton starting in 2008, with the level increasing by 10% annually along with an additional inflation-offsetting adjustment. Since a molecule of CO₂ weighs 44/12 times as much as a carbon atom, the initial tax level in the Larson bill equates to $55 per ton of carbon.

The tax levels in the two bills are fairly similar. In the tenth year (2017), for example, the Stark-McDermott tax rate would be $100 whereas the Larson rate would be approximately $130, without the inflation adjustment (per ton of carbon in either case).

The Larson bill appears to be the stronger of the two, politically. For one thing, Rep. Stark has signed on as a co-sponsor. More importantly, Rep. Larson is Vice-Chair of the Democratic Caucus and the 5th-highest ranking Democrat in the House, as well as a member of the Select Committee on Energy Independence and Global Warming. And not including Larson and Stark, his bill has eight other co-sponsors: one, Blumenauer (OR), is a member of Ways and Means, as are Stark and Larson; and two others along with Larson are members of the Democratic leadership: Miller (CA) and DeLauro (CT). The remaining co-sponsors are Grijalva (AZ), Lofgren (CA), Lowey (NY), Moran (VA) and Towns (NY). All ten are Democrats.

We have estimated the carbon-reducing impact of the Larson bill, using CTC's 4-Sector Carbon Tax Impact Model. The price incentives in the Larson carbon tax would keep U.S. CO₂ emissions essentially constant at 6,000 million metric tons a year, whereas without carbon pricing, emissions would likely rise to 7,000 million tonnes by 2017. Thus it's fair to say that the Larson carbon tax would eliminate one-seventh of future emissions within just a decade. Still, stronger measures -- a combination of stronger efficiency standards, accelerated development of renewable energy sources, and even steeper carbon taxes -- will be required to reduce emissions below current levels.

The bill proposed by Rep. Dingell (D-Mich.), the senior member of Congress (he was first elected in 1954) and chair of the House Energy & Commerce Committee, combines a phased-in carbon tax reaching $50/ton (of carbon) in 2012, along with an additional 50 cent a gallon levy on gasoline and aviation (jet) fuel, also phased in over five years. We have estimated the carbon and petroleum savings from the Dingell proposal elsewhere on this site.

Another provision of Dingell's bill, eliminating the tax deduction for mortgage interest on homes larger than 3,000 square feet, would drive down oil use and carbon emissions still further by cutting out a powerful subsidy for gargantuan homes in suburban-sprawl developments.

The Larson bill would allocate most carbon tax revenue to reducing the burden of payroll taxes on working households, with smaller allocations to provide support renewable energy technologies and provide transition assistance for affected industries. The Stark-McDermott bill does not specify how the revenues would be applied.

We hope soon to present a summary table comparing the provisions, impacts and revenue-allocations of the various bills.