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Pricing Carbon: Opportunities and Obstacles for EPA to Impose a Carbon "Tax"


April 16, 2020


Webinar Only

ELI Member Webinar

The Independent Offices Appropriation Act grants federal agencies, such as the Environmental Protection Agency (EPA) the authority to issue “user fees.” The Office of Management and Budget (OMB) distinguishes user fees from taxes in stating that the former is a “price charged by a government agency that convey special benefits to recipients […] that are at least as great as costs to the Government of providing the special benefits,” whereas the latter is a benefit to the general public.

Some legal scholars suggest EPA could impose a user fee on carbon emissions, while opponents claim only Congress may establish a price on carbon. Both point to a 1990 memorandum issued by EPA’s Office of General Counsel (OGC) that notes the difficulty regulating the use of fees as agencies may not use outside money to supplement appropriations. Subsequent OGCs have interpreted this as prohibiting user fees for air emissions absent Congressional approval, but the memorandum’s author argues this is a misinterpretation.

What are the legal and practical challenges and opportunities for EPA to implement a user fee on carbon emissions? How might the implementation of a user fee on carbon emissions differ from a carbon tax? What are the limitations of a user fee on carbon emissions? Panelists explored these questions and more as they opined on EPA’s authority to impose a user fee on carbon emissions.

Sandra Nichols Thiam
, Associate Vice President, Research & Policy and Director, Judicial Education Program, Environmental Law Institute, Moderator
E. Donald Elliott, Florence Rogatz Visiting Professor of Law, Yale Law School; former Assistant Administrator and General Counsel,  Environmental Protection Agency
Adele Morris, Policy Director, Climate and Energy Economics Project, and Senior Fellow, The Brookings Institution, formerly Senior Economist, Joint Economic Committee, U.S. Congress
Chad Stone, Chief Economist, Center on Budget and Policy Priorities

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