Senators propose first US carbon tax

US senators proposed a tax on carbon emissions Thursday amid growing calls for action on climate change, but the bill is expected to face strong opposition from conservatives. Two days after President Barack Obama urged Congress to tackle the emissions blamed for rising temperatures, two senators laid out a plan that would for the first time set a price on carbon throughout the United States. The plan by staunch environmentalists Barbara Boxer and Bernie Sanders would charge $20 per ton of carbon from major polluters such as coal mines and oil refineries, rising 5.6 percent annually over 10 years. "We are looking at the danger of a planetary crisis," said Sanders, an independent from Vermont who generally votes with Obama's Democratic Party. "When scientists tell us that the temperature of this Earth may go up at least eight degrees Fahrenheit (4.4 Celsius) by the end of this century, that means cataclysmic changes to the planet. We have got to act," he told reporters. In hopes of shielding consumers from higher costs, 60 percent of the generated revenue would be sent back in a monthly rebate to every US resident. Much of the rest would go to improve energy efficiency at homes and promote renewable energy such as wind and solar in a bid to create jobs. The senators, citing the Congressional Budget Office, said that the carbon fee would generate $1.2 trillion over 10 years. They said that around $300 billion would be devoted to bringing down the ballooning US debt. Senator David Vitter, the top Republican on the Environment and Public Works Committee that will take up the bill, attacked the proposal. "It's not just energy prices that would skyrocket from a carbon tax, the cost of nearly everything built in America would go up," he charged. A proposal to set up a "cap-and-trade" system -- which would restrict emissions and provide a market incentive to businesses by allowing a trade in credits -- died in the Senate in 2010. In his annual State of the Union address, Obama voiced alarm at the series of record-breaking hot years, droughts and superstorm Sandy. He vowed to take executive action on climate change if Congress does not move. Republicans control the House of Representatives and many of them contest the view of mainstream scientists that human activity is causing temperatures to rise. House Speaker John Boehner said that the Democratic-led Senate should take the first look at Obama's priorities, which he said "isn't the agenda that many Americans are looking for." "If the president wants to impose a national cap-and-trade energy tax, I would hope that the Senate Democrats would take it up," Boehner said. Boxer, who heads the Senate Environment and Public Works Committee, rejected Republican complaints about presidential action on climate change, saying that Obama was enforcing existing laws. "I have not met an American who came up to me and said, 'senator, I really wish my water was dirtier and my air is too clean,'" she said. Europe pioneered the cap-and-trade system but the idea of switching to a straightforward carbon tax has increasingly come into favor. Australia last year introduced a carbon tax of Aus$23 (US$23.8) per ton. The White House said last year that it was not considering a carbon tax and Obama in his speech spoke of a market-based approach.