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A Tax by Another Name? EPA’s Existing Authority to Impose a Carbon User Fee

Monday, October 7, 2019

A number of bills have been introduced in recent years to price greenhouse gas (GHG) emissions via a federal carbon tax. These proposals proceed from the implicit assumption that the federal government in general, and the U.S. Environmental Protection Agency (EPA) in particular, does not already have such authority. But this assumption, according to former EPA Assistant Administrator and General Counsel E. Donald Elliott, is incorrect.

In a Comment in the October issue of ELR’s News & Analysis, Elliott aims to set the record straight. He acknowledges that some of the confusion over the Agency’s authority stems from a 1990 legal opinion he wrote when he was EPA General Counsel. In contrast, he now asserts that EPA does have existing authority to impose a “reasonable user fee” on releases of carbon dioxide and other GHGs, as well as other pollutants, any time that it has the political will to do so.

Elliott’s original 1990 opinion, published as an attachment to his Comment, was intended to increase EPA’s use of tradeable permits and other economic incentives to regulate pollution. Ever since, EPA has been laboring under the impression that it may not impose an emission charge without specific authorizing legislation from Congress. But, as Elliott explains, the Independent Offices Appropriation Act—a federal statute that has been on the books since 1952—in effect authorizes EPA to impose a carbon tax, because a charge for using the public’s air to dispose of carbon dioxide and other wastes is technically not a tax, but rather a “user fee.” In the end, he argues, it is long past time that emission charges take their rightful place in EPA’s toolbox of instruments available to regulate pollution, including GHG pollution.

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