Old-Guard Republicans
to Push Carbon Tax at
White House Meeting
by and- Former White House advisers, cabinet secretaries pressing tax
- Trump’s economic adviser Gary Cohn among scheduled attendees
The One Idea Climate Change Adversaries Agree On
A group of prominent Republicans and business leaders backing a tax on carbon
dioxide were taking their case Wednesday to top White House aides, including
chief economic adviser Gary Cohn.
dioxide were taking their case Wednesday to top White House aides, including
chief economic adviser Gary Cohn.
The group, including former Treasury Secretaries Hank Paulson and James Baker,
is pressing President Donald Trump to tax carbon dioxide in exchange for
abolishing a slew of environmental regulations. They unveiled their plan with a
press conference in Washington and an op-ed in the Wall Street Journal.
is pressing President Donald Trump to tax carbon dioxide in exchange for
abolishing a slew of environmental regulations. They unveiled their plan with a
press conference in Washington and an op-ed in the Wall Street Journal.
"We know we have an uphill slog to get Republicans interested in this," Baker said
before heading to the White House. But "a conservative, free-market approach is
a very Republican way of approaching the problem."
before heading to the White House. But "a conservative, free-market approach is
a very Republican way of approaching the problem."
Other possible attendees at the meeting include the president’s daughter, Ivanka
Trump, who weighed climate change policy during the campaign, and Vice
President Mike Pence.
Trump, who weighed climate change policy during the campaign, and Vice
President Mike Pence.
The Republican and business leaders, calling themselves the Climate Leadership
Council, lend their stature to an approach for addressing climate change that
mirrors an idea already advanced by Exxon Mobil Corp. Supporters say the tax
is a conservative solution to climate change that replaces a regulatory regime
with a free-market approach for addressing the greenhouse gas emissions.
Council, lend their stature to an approach for addressing climate change that
mirrors an idea already advanced by Exxon Mobil Corp. Supporters say the tax
is a conservative solution to climate change that replaces a regulatory regime
with a free-market approach for addressing the greenhouse gas emissions.
Wal-Mart Founder
Paulson, who served as Treasury secretary under President George W. Bush,
previously has advocated a carbon tax through his eponymous think tank, the
Paulson Institute. Baker, who served as secretary of state and Treasury secretary
under two Republican administrations, as well as former Secretary of State
George Shultz, Wal-Mart Stores Inc.founder Rob Walton and Sequoia Capital
Operations LLC partner Thomas Stephenson, among others. Economic advisers
to former presidents George H.W. Bush and Ronald Reagan also are involved in the
effort.
previously has advocated a carbon tax through his eponymous think tank, the
Paulson Institute. Baker, who served as secretary of state and Treasury secretary
under two Republican administrations, as well as former Secretary of State
George Shultz, Wal-Mart Stores Inc.founder Rob Walton and Sequoia Capital
Operations LLC partner Thomas Stephenson, among others. Economic advisers
to former presidents George H.W. Bush and Ronald Reagan also are involved in the
effort.
"Climate change poses an unacceptable risk to our climate and to our economy,"
Paulson said in a statement. "Putting a price on carbon is by far the most efficient
and effective way to restrict emissions."
Paulson said in a statement. "Putting a price on carbon is by far the most efficient
and effective way to restrict emissions."
Baker himself conceded he remains "somewhat of a skeptic about the extent to
which man is responsible for climate change" but the "risks are too great to ignore."
which man is responsible for climate change" but the "risks are too great to ignore."
The plan faces strong political headwinds; both Trump and a majority of the
House of Representatives have come out against a carbon tax in the past year.
Trump also has pledged to do away with environmental regulations limiting
emissions of carbon dioxide
House of Representatives have come out against a carbon tax in the past year.
Trump also has pledged to do away with environmental regulations limiting
emissions of carbon dioxide
But the idea of a carbon tax, long favored by economists as the most
straightforward way to address climate change, could gain traction as part
of a broad tax overhaul on Capitol Hill.
straightforward way to address climate change, could gain traction as part
of a broad tax overhaul on Capitol Hill.
The blueprint involves a $40 tax on every metric ton of carbon dioxide released
by burning fossil fuels, with the price climbing over time. To avoid an undue
burden on the poor from the higher energy bills that would result, the projected
$200 billion to $300 billion in annual revenue would be redistributed to households
in the form of quarterly checks from the Social Security Administration. Families
of four would see an average annual payout of $2,000 under the plan.
by burning fossil fuels, with the price climbing over time. To avoid an undue
burden on the poor from the higher energy bills that would result, the projected
$200 billion to $300 billion in annual revenue would be redistributed to households
in the form of quarterly checks from the Social Security Administration. Families
of four would see an average annual payout of $2,000 under the plan.
The proposal also calls for border adjustments that would act to hike the costs
of products imported from countries that do not put a price on carbon.
of products imported from countries that do not put a price on carbon.
Martin Feldstein, who headed former President Ronald Reagan’s Council of
Economic Advisers, said the tax would be imposed at the point fossil fuels
enter the economy, such as when oil leaves the refinery or coal leaves the mine.
"The tax at the source is then built in to the prices of the products made from
that raw material," Feldstein said.
Economic Advisers, said the tax would be imposed at the point fossil fuels
enter the economy, such as when oil leaves the refinery or coal leaves the mine.
"The tax at the source is then built in to the prices of the products made from
that raw material," Feldstein said.
Romney Tweet
Former Republican presidential candidate Mitt Romney described the proposal
in a tweet as a "thought-provoking plan from highly respected conservatives to
both strengthen the economy and confront climate risks."
in a tweet as a "thought-provoking plan from highly respected conservatives to
both strengthen the economy and confront climate risks."
The group envisions the carbon tax taking the place of an array of Obama-era
environmental regulations that raise the cost of fossil fuels. The centerpiece of
President Barack Obama’s climate agenda, the Clean Power Plan slashing
emissions from electricity, would be immediately repealed, while others would
be phased out over time. U.S. companies emitting carbon dioxide also could win
environmental regulations that raise the cost of fossil fuels. The centerpiece of
President Barack Obama’s climate agenda, the Clean Power Plan slashing
emissions from electricity, would be immediately repealed, while others would
be phased out over time. U.S. companies emitting carbon dioxide also could win
The idea dovetails with an approach advocated by
some large integrated oil companies, including
Exxon Mobil, which has promoted a revenue-
neutral carbon tax instead of a patchwork of
environmental regulations. Secretary of State Rex
Tillerson, Exxon’s former chief executive, previously acknowledged the climate
is changing and described a carbon tax as the most efficient means of embedding
its cost in economic decisions stretching from oil companies to consumers.
Oil Companies
BP Plc has said a well-constructed carbon tax or cap-and-trade system would
encourage energy producers and consumers to pare emissions, while Royal Dutch
Shell PlcChairman Charles Holliday has called a carbon tax the most effective
and practical way of driving that change.
encourage energy producers and consumers to pare emissions, while Royal Dutch
Shell PlcChairman Charles Holliday has called a carbon tax the most effective
and practical way of driving that change.
It is unclear how the new plan will be received by Republicans in the White House
and on Capitol Hill.
and on Capitol Hill.
The Republican-led House last June approved a non-binding resolution
condemning the idea of a carbon tax as "detrimental to American families
and businesses." The measure, which passed 237-163, was designed to lock
in lawmakers’ positions, making it harder for those who lodged a vote opposing
a tax to support one later on.
condemning the idea of a carbon tax as "detrimental to American families
and businesses." The measure, which passed 237-163, was designed to lock
in lawmakers’ positions, making it harder for those who lodged a vote opposing
a tax to support one later on.
Trump himself has come out against the idea, rejecting a carbon tax in responses
to a survey by the American Energy Alliance last March. Many of the
conservative advocatesguiding Trump’s energy and environment policy
also eschew the idea.
to a survey by the American Energy Alliance last March. Many of the
conservative advocatesguiding Trump’s energy and environment policy
also eschew the idea.
The approach also runs counter to Trump’s campaign promise to help bring
back coal mining jobs. Because it generates more carbon dioxide emissions
than natural gas and oil, coal would be the fossil fuel hardest hit by a tax on carbon.
back coal mining jobs. Because it generates more carbon dioxide emissions
than natural gas and oil, coal would be the fossil fuel hardest hit by a tax on carbon.
Opponents fear that with the foundation laid now, lawmakers could seize on a
carbon tax as a potent source of revenue to offset rate reductions during a future
congressional debate on overhauling the tax code.
carbon tax as a potent source of revenue to offset rate reductions during a future
congressional debate on overhauling the tax code.
"This is not a climate proposal; it’s a tax proposal," said Thomas Pyle, head of
the free-market advocacy group American Energy Alliance. "There’s no need to
trade Obama’s climate regulations for a carbon tax. Donald Trump has already
promised to undo them."
the free-market advocacy group American Energy Alliance. "There’s no need to
trade Obama’s climate regulations for a carbon tax. Donald Trump has already
promised to undo them."
The idea of scuttling carbon dioxide regulations also is a non-starter with many
environmentalists who could be critical to advancing the tax idea.
environmentalists who could be critical to advancing the tax idea.
“We have a moral obligation to protect future generations from the growing
dangers of climate change,” said Rhea Suh, president of the Natural Resources
Defense Council. “Effective action means building on the progress we’re
already making — not sacrificing those gains by weakening the laws Congress
has already passed.”
dangers of climate change,” said Rhea Suh, president of the Natural Resources
Defense Council. “Effective action means building on the progress we’re
already making — not sacrificing those gains by weakening the laws Congress
has already passed.”
But a carbon tax has gained traction in some circles. Republican Bob Inglis, a
former representative from South Carolina, has pitched the tax as a free-market
solution to climate change. Tesla Inc. founder Elon Musk also has pressed the
Trump administration on the issue. It could benefit his electric vehicle business
by driving more consumers away from gasoline-fueled automobiles.
former representative from South Carolina, has pitched the tax as a free-market
solution to climate change. Tesla Inc. founder Elon Musk also has pressed the
Trump administration on the issue. It could benefit his electric vehicle business
by driving more consumers away from gasoline-fueled automobiles.
The issue divides the oil industry; though Exxon Mobil is just one of several
large integrated companies that favor a carbon tax, the idea is opposed by
many independent producers that do not own pipeline and refining operations.
large integrated companies that favor a carbon tax, the idea is opposed by
many independent producers that do not own pipeline and refining operations.
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