Democrats Weigh Carbon Tax After Manchin Rejects Key Climate Provision – The New York Times

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The clean electricity program opposed by Mr. Manchin was notable because it would include both incentives and penalties. Payment to electric utilities to switch to clean energy was the carrot; a penalty for companies that did not replace fossil fuels with clean energy was the stick. A carbon tax might provide a similar inducement, when paired with tax incentives, analysts said.

“If you were to replace the clean electricity program with a price on carbon, I think that would go a long way. It would put back a lot of the stick elements that were removed,” said Zeke Hausfather, a climate scientist and policy analyst at the Breakthrough Institute, an energy and climate research organization.

Mr. Wyden’s staff, which is drafting the carbon tax language, is considering a domestic carbon tax that could start at $15 to $18 per ton, and that would increase over time, according to two people familiar with the matter who were not authorized to speak on the record.

The tax would be applied directly to coal mining companies, large natural gas processing plants and oil refiners, based on the emissions associated with their products, with one exception: Oil refiners would very likely be charged for producing diesel fuel and petrochemicals, but not gasoline — a way to shield most American drivers at the pump.

An important part of the policy, Mr. Wyden said, will be to use the revenue for tax rebates or checks for poor and working-class Americans — particularly those employed in the fossil fuel industry. “You’ve got to show workers and families, when there’s an economy in transition, that they will get their money back,” he said. “They will be made whole.”

Emily Cochrane, Zolan Kanno-Youngs and Jim Tankersley contributed reporting.

Source Article from https://www.nytimes.com/2021/10/16/climate/democrats-carbon-tax-climate.html

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