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A Project of The Annenberg Public Policy Center

AFP Distorts Begich’s Carbon Tax Stance

The conservative Americans for Prosperity claims Democratic Sen. Mark Begich “is on record supporting a carbon tax … that will cost the average family over $2,000 annually.” Not true. Begich hasn’t backed a carbon tax proposal, and the $2,000 figure is based on general assumptions, not any specific plan or piece of legislation.

In fact, what Begich has clearly supported is an amendment requiring any potential, but currently nonexistent, carbon tax revenue to be returned to the American people in some way. It was a vote to make a hypothetical tax revenue neutral, a factor that was not part of the “over $2,000” calculation.

In reality, there is no legislation currently being debated in Congress that would institute a carbon tax, which would be a direct tax on the carbon content of energy sources including coal, oil and gas. Last year, Sens. Bernie Sanders and Barbara Boxer introduced a bill that would enact a $20-per-ton carbon fee and return 60 percent of the revenue to households. The bill was introduced and referred to committee on Feb. 14, 2013, and it hasn’t gone anywhere since. A group of four Democratic lawmakers also released a “discussion draft” of a carbon tax in March 2013, asking for comment on how a tax should be priced and structured, and how revenue could best be returned to the public.

“There’s nothing really on the table,” Charles Komanoff, director of the Carbon Tax Center, told us. “To my knowledge, there has never even been a hearing, even just an informational hearing on anything that is or resembles a carbon tax bill.”

Komanoff’s group, a nonprofit launched in 2007, supports a revenue-neutral carbon tax to reduce carbon dioxide emissions. Begich isn’t listed on the group’s website among the politicians voicing support for a carbon tax, and Komanoff said he wasn’t aware of the Alaska senator backing the idea.

The citations in the AFP ad don’t show Begich supporting a carbon tax, either.

Vague Ties to Carbon Tax

The AFP ad says Begich “is on record supporting a carbon tax, and even pushing Harry Reid to make it a priority.”

But neither of those statements are clearly supported by Begich’s votes and actions. The ad points to his March 2013 vote against an amendment to a Democratic budget resolution by Republican Sen. Roy Blunt to require 60 votes to approve a potential carbon tax in the future. AFP and other organizations wrote Blunt a letter, expressing support for the amendment, which, the letter said, would “create a procedural barrier against carbon taxes or fees in the future.”

Carbon tax opponents certainly would have appreciated Begich, and any other senator for that matter, voting for the Blunt amendment. But voting against a resolution to require a high-threshold for such a tax to pass the Senate at some unknown point in the future is not the same as voting in favor of the tax itself.

On the same day, Begich voted in favor of an amendment from Democratic Sen. Sheldon Whitehouse — who had introduced the “discussion draft” on the carbon tax with other lawmakers. Whitehouse’s amendment would have required any possible future carbon tax to be revenue neutral, with the money the government would receive from the tax being returned to the American people. That’s not a vote for a carbon tax, either.

The Carbon Tax Center certainly doesn’t count it as a show of support. James Handley, the group’s senior policy analyst, told us that the claim that Begich supported a carbon tax is “totally spurious.” Whitehouse’s resolution, Handley said, “would take the sting out of any carbon tax by shifting taxes off workers and onto polluters. Begich seemed to be saying ‘no’ to additional tax burdens, but ‘maybe’ to a tax shift.”

Neither the Blunt nor the Whitehouse amendment passed.

As for “pushing Harry Reid,” AFP highlights a letter Begich and other freshman Democratic senators wrote to the Senate majority leader in July 2010, a few months after the Deepwater Horizon oil spill in the Gulf of Mexico. The letter expresses support for comprehensive energy legislation, but it doesn’t say anything about a “carbon tax.” Instead, it says comprehensive legislation should include “making polluters pay through a price on greenhouse gas emissions.” That could mean a carbon tax, or it could be cap-and-trade, or it could mean another form of incentives or penalties. The letter doesn’t specify.

It goes on to say: “While each of us has individual priorities and concerns for our states and regions, we believe that the framework outlined above should guide energy legislation on the floor this year.”

Begich wrote another letter to Reid earlier that year saying that “none of the various proposals for economy-wide legislation sufficiently addresses Alaska’s unique situation,” according to a March 28, 2010, article in Petroleum News, a weekly based in Anchorage. Begich said in the letter that Alaska’s priorities for energy legislation would include increasing incentives for bringing Alaska’s natural gas to market, state sharing of offshore oil and gas revenues, funding for communities dealing with climate change effects such as town relocations, and more funding for government research of Arctic and climate issues.

We contacted Begich’s campaign to ask about his position, and spokesman Max Croes told us via email that Begich “does not support a Carbon Tax” and that the claim in the ad is “flat-out false.”

Last year, Begich released a radio ad, in response to robocalls from the National Republican Senatorial Committee that claimed he was a carbon-tax supporter. In the ad, Begich says: “I’m fighting against the carbon tax.” AFP uses that clip in its ad. The Begich campaign’s support for the radio ad doesn’t back up the claim that he’s “fighting against the carbon tax” — instead the campaign points to articles on Begich standing up for Alaska’s needs and taking divergent views from Democrats on oil issues.

As the 2010 letters to Reid show, Begich is in favor of energy legislation that addresses climate change. He told The Hill newspaper in August 2013 that “there’s no debate on the science.” He has supported renewable energy, and also increased oil and gas exploration in Alaska.

Analysis of a Phantom Bill

The AFP ad goes on to say the carbon tax that Begich supposedly supported “will cost the average family over $2,000 annually,” citing a Heritage Foundation analysis from January 2013. The implication is that Begich supported a plan that would have this impact on families, but Begich didn’t sign on to any specific proposal. In fact, there is no active legislation to which Begich could sign on, even if he wanted to. And the Heritage Foundation wasn’t analyzing any specific proposal, either.

Instead, Heritage developed its estimate using carbon-tax scenarios presented in the Energy Information Administration’s 2012 Annual Energy Outlook, which gives various metrics for energy demand and supply.

EIA considered the impact of imposing carbon taxes at two levels ($15 per metric ton and $25 per metric ton). It also considered a scenario in which companies make no capital investments in anticipation of greenhouse gas-reducing legislation. And the EIA presented a reference case, or “business-as-usual,” which assumes companies would make capital investments in anticipation of GHG legislation. Specifically, “the cost of capital for investments in GHG-intensive technologies … is increased by 3 percentage points to reflect the behavior of utilities, other energy companies, and regulators concerning the possible enactment of GHG legislation that could require owners to purchase emissions allowances” or invest in other emissions-reducing or offsetting measures, EIA said.

Heritage took the higher of the two carbon tax scenarios (the $25 tax) and compared that with the scenario in which companies wouldn’t make any adjustments in capital costs in anticipation of legislation. Using this maximum impact under the EIA scenarios, Heritage says a carbon tax would “cut the income of a family of four by $1,900” in 2016 and cause “average losses of $1,400 per year through 2035.” It also would “raise the family-of-four energy bill by more than $500 per year.”

But Begich hasn’t backed any carbon tax proposal — let alone one that includes these specifics.

Also, the EIA carbon tax scenarios don’t account for any offsets, such as returning revenue gained from a carbon tax to the public, an idea Begich indicated he supported by voting for the Whitehouse amendment. If revenue were returned to the public, such as in the form of credits or other tax decreases, the impact on families’ bottom lines could be much different. The authors of the Heritage article argue that a revenue-neutral tax is politically impossible in Washington, but that’s speculation, of course.

In the end, the Heritage analysis — along with the ad’s other claims about a loss of Alaskan jobs and little help for the environment —  has nothing to do with Begich. He hasn’t signed on to any carbon tax plan.

— Lori Robertson