EPA's Existing Authority to Impose a Carbon 'Tax
| Date | 01 October 2019 |
| Author |
10-2019 NEWS & ANALYSIS 49 ELR 10919
COMMENTS
EPA’s Existing Authority to
Impose a Carbon “Tax”
by E. Donald Elliott
E. Donald Elliott is Florence Rogatz Visiting Professor of Law, Yale Law School, and
formerly EPA Assistant Administrator and General Counsel, 1989-1991.
A
number of bills have been introduced in recent years
to put a price on carbon via a federal carbon ta x.1
ese proposals generally proceed from the implicit
assumption that the federal government in general, and
the U.S. Environmental Protection Agency (EPA) in par-
ticular, does not already have such authority. at is incor-
rect. Under a federal statute that has been on the books
si nce 19 52,2 EPA could impose a carbon “tax” any time an
administration in power is wil ling to do so. at is because
a charge for using the public’s air to dispose of carbon diox-
ide and other wastes is technica lly not a tax, but rather a
“user fee.”3
e confusion stems from a 1990 legal opinion written
by the present author when he was EPA General Counsel,4
which ironically was intended to increase EPA’s use of trad-
able permits and other economic incentives to regulate pol-
1. For a summary of pending carbon tax proposals and policy arguments pro
and con, see C R S, R45625, A
P G G E W C T E
F: C P I (2019), available at https://
fas.org/sgp/crs/misc/R45625.pdf.
2. Independent Oces Appropriation Act, 31 U.S.C. §9701, quoted and dis-
cussed infra.
3. See discussion infra notes 20-30.
4. Memorandum from E. Donald Elliott, Assistant Administrator and General
Counsel, U.S. EPA, on Existing Authority to Use Economic Incentives to
Regulate Pollution, to William K. Reilly, Administrator, U.S. EPA (July 13,
1990).
lution. It is time to set the record straight that EPA does
have existing authority to impose a reasonable user fee
on releases of carbon dioxide and other greenhouse ga ses
(GHGs), as wel l as other pollutants, any time that it has the
political will to do so.
For many purposes, tradable permits are admittedly
superior to emission fees for regulating environmental
pollutants,5 and I have been a longtime advocate of trad-
able pollution rights. However, in some circumstances,
charging fees for emitting pollution into the public’s air
can be attractive. is is particularly tr ue in view of our
country’s structural decit and national debt of $22.6 tril-
lion and rising; a user fee on releasing ca rbon pollution into
the atmosphere could raise billions of dollars annua lly for
the U.S. Treasury,6 as opposed to giving away the right to
pollute for free.7 In addition, the old adage “nothing is cer-
tain but death and taxes” captures the perception that fees
paid to the government are likely to remain constant or go
up, while the prices of permits uctuate.8 at is crucial
because to date, the problem of addressing climate cha nge9
is dominated by substituting one type of lower-emitting
5. Susan Rose-Ackerman, Euent Charges: A Critique, 6 C J. E.
512-28 (1973), reprinted in B-C P A 1974
(Richard Zeckhauser et al. eds., Aldine Publishing Co. 1975).
6. A U.S. Government Accountability Oce (GAO) report found that 23
federal agencies charged more than 3,600 dierent user fees and collected
nearly $64 billion in scal year 2010. U.S. G A
O, 2012 A R: O R D,
O F, A S, E R-
278-79 (2012) (GAO-12-342SP), available at https://www.gao.gov/
assets/590/588818.pdf.
7. See Bruce A. Ackerman & Donald Elliott, Air Pollution “Rights,” N.Y.
T, Sept. 11, 1982, at 23:
e E.P.A. should, instead, sell polluters the right to dirty the air
for a xed period—just as the Government now auctions o oil
and gas leases to the highest bidders. If polluters were forced to pay,
they would clean up to avoid the cost—and breathers, not industry,
would prot. e public would not stand for a multi-billion dollar
give-away of public lands or water to industry. Why should the air
be dierent?
8. B A. A ., T U S E
Q (1974).
9. is is not the place to debate the role that human activities play in caus-
ing climate change, or what priority should be given to addressing climate
change in national policy. e point of this Comment is a narrower one: to
Author’s Note: An earlier version of this Comment was presented at
the University of Michigan Environmental Law and Policy Program
Symposium “Planet in Peril: Averting Climate Catastrophe rough
Law and Social Change” on April 11-12, 2019, and at the Yale
Law School faculty workshop on April 22, 2019. Duke University
Law School Prof. Jonathan Wiener also provided helpful comments
on an earlier draft. I thank the commenters, but of course I am
solely responsible for the errors, omissions, and opinions that remain.
e opinions expressed are those of the author personally and do not
reect the positions of any organization or client; the author further
states that he has not represented any client on matters related to the
content of the Comment.
Copyright © 2019 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
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