Sen. Whitehouse wants a $42 per ton tax on carbon emitters

Sen. Sheldon Whitehouse (D-R.I.) said he will propose a bill to impose a $42 per ton tax on all carbon dioxide emissions to punish polluters.

The fee comes from the Obama’s administration’s “social cost of carbon,” the price it puts on carbon pollution when calculating the benefits of climate change regulations.

{mosads}Whitehouse said his bill is meant to remedy the fact that the societal costs of carbon pollution — which is believed to cause climate change — are not reflected in the monetary costs.

“That is, by every economist’s standard, a market failure,” he said at a Wednesday forum on electric vehicles hosted by The Hill and sponsored by PG&E.

“If we can correct that, we can make a huge difference for this industry and for the move that we need to make to cleaner technologies,” he said of electric cars.

Under Whitehouse’s legislation, the tax would on polluters would increase by inflation plus 2 percent each year.

He wants to return the revenue from the fees to taxpayers, a concept known as “revenue-neutral” taxing.

That could come as a combination of lowering the corporate income tax and giving rebates to families, individuals and the poor.

“So on top of making polluters pay, we can lower the corporate tax rate, give every working American a very significant tax rebate, and give people who are really in dire straights and qualify for the [Earned Income Tax Credit] a better chance,” he said.

Whitehouse said he plans to unveil further details about his proposal, which he’ll sponsor with Sen. Brian Schatz (D-Hawaii), later Wednesday.