BILL ANALYSIS Ó AJR 43 Page 1 Date of Hearing: June 27, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AJR 43 (Williams) - As Amended June 13, 2016 SUBJECT: Greenhouse gases: climate change SUMMARY: Urges the United States Congress to enact a tax on carbon-based fossil fuels, as specified. THIS JOINT RESOLUTION: 1)Urges the United States Congress to enact, without delay, a tax on carbon-based fossil fuels. 2)Specifies the tax should be collected once, as far upstream in the economy as practical, or at the port of entry into the United States; the tax rate should start low and increase steadily and predictably to achieve the goal of reducing carbon dioxide emissions in the United States to 80% below 1990 levels by 2050; all tax revenue should be returned to middle- and low-income Americans to protect them from the impact of rising prices due to the tax; and, the international competitiveness of United States businesses should be protected by using carbon-content-based tariffs and tax refunds. AJR 43 Page 2 3)Includes related "whereas" statements regarding climate change and a carbon tax. FISCAL EFFECT: Non-fiscal COMMENTS: 1)Background. Carbon tax (or fee) and dividend is a market-based, economy-wide approach to pricing carbon and reducing greenhouse gas emissions popularized by Peter Barnes around 2008. It is presented as a more simple, straightforward, and effective alternative to other market-based schemes, including cap-and-trade. In California, the Air Resources Board has adopted a cap-and-regulation under the market-based compliance mechanism authority granted by AB 32, a majority vote bill enacted in 2006. The current cap-and-trade regulation applies through 2020. A carbon tax, which would require a 2/3 vote of the Legislature in California, has never advanced. Several fee/tax-and-divided, cap-and-dividend, and cap-and-trade bills have been proposed in Congress over the past 10 years, but none have passed. 2)Author's statement: Currently at the federal level there are no statutes addressing carbon levels in the atmosphere, or the long term affects these levels are having with global climate change. The measures proposed in this resolution will AJR 43 Page 3 benefit the economy, human health, the environment, and national security, even without consideration of global temperatures, as a result of correcting market distortions, reductions in non-greenhouse-gas pollutants, reducing the outflow of dollars to oil-producing countries and improvements in the energy security of the United States. Phased-in carbon fees on greenhouse gas emissions (1) are the most efficient, transparent, and enforceable mechanism to drive an effective and fair transition to a domestic-energy economy, (2) will stimulate investment in alternative-energy technologies, and (3) give all businesses powerful incentives to increase their energy-efficiency and reduce their carbon footprints in order to remain competitive. Equal monthly dividends (or "rebates") from carbon fees paid to every American household can help ensure that families and individuals can afford the energy they need during the transition to a greenhouse gas-free economy and the dividends will stimulate the economy. The weight of scientific evidence indicates that greenhouse gas emissions from human activities including the burning of fossil fuels and other sources are causing rising global temperatures. The weight of scientific evidence also indicates that a return from the current concentration of more than 400 parts per million ("ppm") of carbon dioxide ("CO2") in the atmosphere to 350 ppm CO2 or less is necessary to slow or stop the rise in global temperatures. Further increases in global temperatures pose imminent and substantial dangers to human health, the natural environment, the economy, national security, and an unacceptable risk of catastrophic impacts to human civilization. REGISTERED SUPPORT / OPPOSITION: AJR 43 Page 4 Support Citizens Climate Lobby, Santa Barbara Chapter (sponsor) Opposition None on file Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916) 319-2092