President Obama wants America's transportation to go green, and he wants oil companies to pay for it.
The White House announced yesterday that it will propose a $10-per-barrel tax on oil as part of the fiscal 2017 budget. The money will go toward a $32 billion annual investment in clean vehicles, public transit and urban planning.
Oil companies immediately lambasted the idea of a tax. Republicans pronounced the plan dead on arrival in the GOP-led Congress.
"Once again, the president expects hardworking consumers to pay for his out of touch climate agenda," House Speaker Paul Ryan (R-Wis.) said in a statement.
"The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists. The good news is this plan is little more than an election-year distraction," he said.
But the clean transportation push represents a new chapter in Obama's larger climate change agenda, coming on the heels of federal regulations on power plant emissions and an international climate agreement to keep rising global temperatures at safe levels. The transportation sector accounts for nearly 30 percent of all greenhouse gas emissions in the country, second only to the power sector.
Administration officials framed the proposed investment as a way to cut emissions, reduce dependence on oil and prepare for the consequences of climate change, all while helping fix decades long problems with transportation infrastructure.
"It increases overall investment in our infrastructure in ways that will give American communities more climate-friendly options," said Transportation Secretary Anthony Foxx.
He and Energy Secretary Ernest Moniz have said they are "bullish" on fuel-efficient and autonomous cars, both items on the new Obama wish list. But the plan also targets sectorwide reductions in greenhouse gas emissions.
Infrastructure may find bipartisan support
The spending road map takes its cue from the American Recovery and Reinvestment Act of 2009, which provided $90 billion for research into clean energy technologies.
White House officials said that under the proposal, $20 billion per year would be allocated for reducing traffic and boosting mobility, including investments in public transit and new technologies like high-speed rail and magnetic levitation.
Another $10 billion per year would go toward streamlining local, regional and state planning. A Climate Smart Fund would provide bonuses to states that are able to cut carbon emissions from transportation, and three new grant programs would target regional-scale transportation, livable cities and infrastructure that is more resilient to the effects of climate change.
Finally, $2 billion a year would go toward clean transportation research and development, including infrastructure for low-carbon vehicles and smart cars and aircraft.
Last month, in a sneak peek at the president's budget proposal, Foxx announced that the spending plan would include $4 billion over a decade to accelerate the adoption of autonomous vehicles.
Money for infrastructure has long enjoyed widespread support. Late last year, Congress passed a five-year $305 billion transportation authorization and spending bill, the first multi-year bill in a decade. But Jeffrey Zients, director of the National Economic Council, called it merely a "downpayment."
"For too long, there's been strong bipartisan agreement that we need more transportation infrastructure, but it hasn't been accompanied by the political will to fund it," he said.
A higher gas tax has been one option, but the president and Congress have shied away. Another has been a fee based on road usage or vehicle miles traveled, instead of fuel used.
But a tax levied on oil companies spreads the cost more evenly among all users of the transportation system, not just highway drivers, Zients said.
A White House fact sheet added that the tax provides "a clear incentive for private sector innovation to reduce our reliance on oil."
The announcement marks the first time the White House has officially proposed such a fee. Environmentalists applauded the move as a key step in making the the global climate deal struck in Paris last year a reality.
"With this action, President Obama is advancing the mission our country and nearly 200 others agreed to last year in Paris," Rhea Suh, president of the Natural Resources Defense Council, said in a statement. "It connects the rising economic, social and environmental costs of burning oil to the vast opportunities for American innovation, enterprise and progress."
Oil groups attacked the idea.
"The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America's emergence as a global energy leader," said Jack Gerard, president and CEO of trade association the American Petroleum Institute.
"On his way out of office, President Obama has now proposed making the United States less competitive," he added.
The tax, which would apply to imports but not exports, is equivalent to around 22 cents extra per gallon of fuel. Zients recognized that some costs may get passed along to consumers.
Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500