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To build back better, put a fee on corporate carbon pollution

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A woman wears a protective mask as she walks in heavy winds during a seasonal sandstorm on April 15, 2021 in Beijing, China. China’s capital and the northern part of the country typically experience sandstorms that originate in the Gobi desert, but scientists believe that climate change and desertification also plays a role in their…

As Democrats negotiate a revised plan to “build back better,” they should include a corporate pollution fee that puts innovation at the center of U.S. climate policy, holds corporations accountable for their carbon emissions and makes the tax code fairer for American families.

The idea, championed by Sen. Sheldon Whitehouse (D-R.I.), picked up steam recently when White House Spokesperson Jen Psaki said that a corporate carbon fee would not violate President Biden’s pledge to not raise taxes on people making under $400,000. “Polluter fees on corporations do not conflict with the $400,000 pledge,” she told reporters.

The proposal already has the backing of two powerful senators who are heavily involved in the effort to enact President Biden’s agenda: Sen. Ron Wyden (D-Ore.), the chairman of the Senate Finance Committee, and Sen. Chris Coons (D-Del), a close confidant of the president.

Here’s how a corporate pollution fee can help fulfill Biden’s Build Back Better agenda.

First, a corporate pollution fee makes the tax code fairer. A properly designed fee on corporate carbon pollution can put more money in the pockets of Americans earning under $400,000.

Today, American taxpayers are paying a hidden climate tax as the government shoulders huge costs of recovery from climate disasters. The most recent stopgap funding bill included $28.6 billion for much-needed relief from recent disasters, including this year’s colossal wildfires and severe drought. As climate change accelerates, Congress writes these disaster checks for more money, and more often.

Governments also face new financial burdens as they invest in climate-resilient infrastructure to avoid even bigger bills when disaster strikes. The bipartisan infrastructure bill before Congress includes $50 billion in critical climate resiliency investments to better prepare for the increasing reach and destructive power of climate disasters — a tiny fraction of what will be needed.

To meet these critical needs, taxing corporate pollution is a far superior approach than taxing working Americans. After all, shouldn’t the corporations that contribute the most to climate change pay their fair share of the bill?

A carbon pollution fee can be made even fairer by returning an equal share of the proceeds to every American. The approach has been endorsed by more than 3,600 economists, including four former chairs of the Fed and 15 former Chairs of the Council of Economic Advisers.

Second, a corporate pollution fee will boost innovation and private sector investment in clean energy, creating jobs and bringing down the cost of energy.

Even without a corporate pollution fee, the Build Back Better plan is a blueprint for creating good-paying clean energy jobs, including manufacturing electric vehicles, shifting the electric grid to clean energy, reclaiming abandoned mines and wells and enlisting people to work in a “Civilian Climate Corps.”

A corporate pollution fee would give an adrenaline boost to these programs and unleash a surge of private sector innovation and investment. Aligning market forces with government incentives would deliver the clarity investors and businesses need to go big on clean technology and infrastructure.


In short, it would make clean energy cheaper and more widely available sooner.

Third, a corporate pollution fee would be a powerful tool in the fight against climate change. It taps private sector resources to boost the overall pace and ambition of efforts to slash pollution and shift to clean energy. And it makes public sector climate programs, investments and incentives work better.

A corporate pollution fee on carbon emissions is not only good policy. It is also good politics. Some 67 percent of voters support requiring fossil fuel companies to pay a carbon tax, including 82 percent of moderate/conservative Democrats and 91 percent of liberal Democrats, according to a Yale poll last year.

Progressives should welcome having corporations pay their fair share. Woven into the extensive environmental justice, worker and clean energy provisions of the Build Back Better agenda, a corporate pollution fee would be a huge boost to U.S. climate leadership and help raise the prospects of more ambitious global action.

For moderate Democrats who dislike mandates, innovation is at the heart of a corporate pollution fee, which is why it’s the preferred climate approach for so many businesses.

Moderates concerned about the competitiveness risks of new corporate income taxes may also find taxing corporate pollution an attractive option. A corporate pollution fee can be paired with an imported pollution fee imposed on products coming into the United States. But it will only work if we hold domestic industry to the same standards.

Biden and congressional Democrats should include a corporate carbon pollution fee — the most powerful tool in the climate toolbox — in the Build Back Better reconciliation plan. A properly designed fee will ensure corporations pay their fair share and put innovation at the center of a climate change strategy, creating jobs and giving Americans everywhere access to cleaner, more affordable and reliable energy.

Jeremy Symons is principal of Symons Public Affairs. He was the project manager of Climate 21, a blueprint for “whole-of-government” presidential climate leadership. He previously worked at Environmental Defense Fund and for Democrats in the United States Senate.

Tags Build Back Better Carbon tax Chris Coons Climate change Environment Global warming Jen Psaki Jeremy Symons Joe Biden Pollution Ron Wyden Sheldon Whitehouse

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