With increasing signs that the EPA is having trouble coming up with a regulations designed to kill coal-fired power plants that will survive legal challenge, there is fresh news that the EPA is, on its own authority, considering allowing states to impose a carbon tax. From Adele Morris of the Brookings Institution:
The U.S. Environmental Protection Agency (EPA) is developing a proposed rule due out in June that could allow states to use carbon excise taxes or fees to limit the one-third of U.S. greenhouse gas emissions that come from power plants. The tax approach, one of several options EPA could offer states, could provide an important test for price-based limits on climate-changing activities.
A national price on carbon currently has little traction in Washington, but EPA’s power plant rule could open the door for a straightforward state-based tax. EPA just needs to set a minimum tax trajectory that any state could adopt.
Morris thinks “A tax option is feasible and consistent with the law. If EPA can allow cap-and-trade under the rule, as the agency has indicated it will, it can allow an excise tax or fee.”
So is this what we’ve come to in the administrative state: bureaucracies can authorize new taxes without a vote of Congress or state legislatures?