Sec. 2. Greenhouse gas emissions

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Chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new subchapter: Sec. 4691. Tax imposed on greenhouse gas emissions. Sec. 4692. Border adjustments. Sec. 4693. Definitions and other rules. There is hereby imposed a tax on greenhouse gas emissions from fossil fuel products and on greenhouse gas emissions from any person who is required to report emissions, or to which emissions are attributed, under subpart A of part 98 of title 40, Code of Federal Regulations, as in effect on the date of the enactment of the Tax Pollution, Not Profits Act , and emitted not less than 25,000 tons of carbon dioxide emissions or carbon dioxide equivalent emissions during the preceding calendar year.

The Secretary shall apply to the person responsible for reporting under part 98 of title 40, Code of Federal Regulations, unless, in consultation with the Administrator of the Environmental Protection Agency, the Secretary determines that applying the tax to a different person would be less burdensome and would not have the effect of increasing carbon dioxide equivalent emissions. In 2018, the amount of the tax will equal $30 per metric ton of carbon dioxide or carbon dioxide equivalent.

The amount in the preceding sentence shall be increased each subsequent year by 4 percent above inflation, as measured by the Consumer Price Index for all urban consumers (all items; United States city average), rounded up to the next whole dollar amount. The Secretary shall provide a refund equal to the tax per metric ton of carbon dioxide or carbon dioxide equivalent for the capture and permanent sequestration of greenhouse gas emissions or from the use of a fossil fuel in manufacturing which does not result in the emission of a greenhouse gas in a manner that can be reasonably assumed to permanently sequester the greenhouse gas content of the fossil fuel.

In the case of any good exported from the United States, the Secretary may provide an equivalency refund to the person exporting such good equal to the cost associated with the tax imposed in section 4691. In the case of any good imported into the United States that would have had an increased cost imposed by section 4691 had that good been produced in the United States, the Secretary may impose an equivalency fee on the person importing such good equivalent to the tax that would have been imposed under section 4691 at any point in the supply chain of that good, had that good been produced in the United States.

The Secretary shall consult with the Administrator of the Environmental Protection Agency, the United States Trade Representative, and the Secretary of Energy in establishing rules and regulations implementing the purposes of this section. For purposes of this subchapter— The term carbon dioxide equivalent means, for each greenhouse gas, the quantity of greenhouse gas that the Administrator of the Environmental Protection Agency determines makes the same contribution to global warming as 1 metric ton of carbon dioxide.

The term greenhouse gas means any of the following: Carbon dioxide. Methane. Nitrous oxide. Sulfur hexafluoride. Hydrofluorocarbons. Perfluorocarbons. The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this subchapter, including, in consultation with the Administrator of the Environmental Protection Agency, defining permanent sequestration of greenhouse gas emissions and specifying under what conditions the use of a fossil fuel in manufacturing which does not result in the emission of a greenhouse gas in a manner that can be reasonably assumed to permanently sequester the greenhouse gas content of the fossil fuel for purposes of this section. .

The table of subchapters for chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Subchapter E. Greenhouse Gas Emissions . The amendments made by this section shall apply to taxable years beginning after December 31, 2017.