On Aug. 7, 2020, Sen. Dick Durbin (IL) introduced the America’s Clean Future Fund Act (S.4484).
Bill Summary
The America’s Clean Future Fund Act places a price of $25 per metric ton of carbon dioxide or carbon dioxide equivalent, beginning once the United States has weathered the worst economic consequences from COVID–19, but no later than 2023. The price increases by $10 each year, multiplied by the cost of living adjustment. The fee is assessed “upstream” at the point of extraction, manufacturing, or production, and covers fossil fuels (coal, crude oil, natural gas). There are refunds or credits available for carbon dioxide capture, utilization, and storage.
The revenue generated from this legislation funds three main components: a carbon rebate, transition assistance, and the Climate Change Finance Corporation. For the first ten years, 75% of the revenue is designated for a carbon fee rebate and payments for facilities and farmers that sequester carbon. For the same period, 15% of the revenue funds the Climate Change Finance Corporation (C2FC).
The C2FC is an independent federal agency established by the bill that seeks to address climate change and reduce greenhouse gas emissions by financing clean energy and climate change resiliency activities. A portion of the revenue—10%—funds transition assistance for impacted communities, such as carbonintensive communities and frontline communities. After 10 years, the percentages applied toward the carbon fee rebate, carbon sequestration payments, and C2FC increase, while the percentage designated for transition assistance decreases.
The America’s Clean Future Fund Act does not preempt state law or undermine existing federal regulatory authority.
Bill Evaluation
FCNL’s carbon pricing principles help us evaluate carbon tax legislation. Download this document to see how the America’s Clean Future Act aligns with our principles.
What About the Regulations?
The America’s Clean Future Fund Act does not preempt state law or undermine existing federal regulatory authority.
Conclusion
This bill is ambitious and addresses the climate crisis in multiple ways. The number of provisions in this bill would theoretically make it appealing to a diverse set of legislators. However, the bill could include more provisions to protect vulnerable communities.
Still, it is great to see that environmental justice communities are prioritized for transition assistance and funding from the C2FC. Lastly, the bill solely has Democratic support at this time, and we believe legislation must have bipartisan support to become law. Nonetheless, this bill adds to the significant conversation around carbon pricing in this Congress.
