Biden Advisor Says Carbon Fee on the Table for Climate Policy

“There’s a lot of things in the mix now that people are thinking about … climate fees are one of them, whether it’s a sector based or it’s a broad based fee, none of those issues are off the table,” White House National Climate Advisor Gina McCarthy told a meeting of President Joe Biden’s council of advisors on science and technology.

“Congress is debating and hopefully we will see the end of that debate soon,” McCarthy said. She did not say whether the White House is pushing lawmakers to support a carbon fee policy. Under a carbon fee, the government sets a price for each ton of greenhouse gas that polluters emit that gradually rises, incentivizing industries to move to cleaner energy sources.

Biden and his fellow Democrats have been trying to push forward other measures to tackle climate change in a bipartisan infrastructure bill and a wider spending bill, including expanding tax credits for wind and solar power and incentives for electric vehicles.

But conservative West Virginia Democrat Manchin has opposed a major component of the spending bill known as the Clean Electricity Performance Plan, that would reward power utilities for investing in renewable power and fine those who do not, saying taxpayer money should not be used for something that utilities have already embarked on.

Manchin and fellow Democratic centrist Senator Kyrsten Sinema have opposed the cost of the $3.5 trillion spending bill that Democrats hope to pass on a party line vote in the 50-50 divided Senate.

Some lawmakers, including Democratic Senator Ron Wyden, who is chairman of the Senate finance committee, have been advocating for a carbon fee and dividend program. That program could raise revenues to help pay for the reconciliation bill but would also have to abide by Biden’s pledge not to raise taxes on families earning less than $400,000 annually. A carbon fee could also be crafted to avoid higher gasoline and fuel costs.

But carbon fees have long been unpopular among industry advocates and could face opposition from moderate Democrats in the House from states that depend on revenues from fossil fuel production. And time is running short for Congress to act before the annual climate talks that begin on Oct. 31 in Glasgow, Scotland, where Biden is hoping to show the world that the United States is again committed to moving ambitiously on climate.

McCarthy said that beyond what is going on in Congress, the executive branch can also act on climate.

“Despite what happens on the Hill there are many ways in which we can continue to work through our authorities in the federal government and using our partnerships with states and local communities,” she said.

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(Reporting by Timothy Gardner; Editing by Aurora Ellis)