Daily GPI / Regulatory / NGI The Weekly Gas Market Report / Regulatory / NGI All News Access

GOP Elders Lobby Trump for Carbon Tax Over Obama Climate Change Policies

A coalition of veteran Republican officials, including former Secretary of State James A. Baker, met Wednesday with White House officials to advocate for a national carbon tax to address climate change.

The Climate Leadership Council, composed of a who’s who of former GOP cabinet-level and senior administration officials, including George P. Shultz, Henry Paulson, Marty Feldstein and Greg Mankiw, wants to eliminate nearly all of the Obama administration’s climate policies in favor for a rising carbon tax.

The tax would start at $40/ton and be returned in the form of a quarterly check from the Social Security Administration to every U.S. citizen.

Baker earlier this week made his case in interviews on CNN and with The Washington Post. An opinion piece also was posted Wednesday by his council colleagues in The New York Times. The new website on Wednesday also detailed all of the policy proposals.

Baker said he was unsure if climate change was entirely caused by man. However, “the risk is sufficiently strong that we need an insurance policy and this is a damn good insurance policy.”

Besides serving as George H. W. Bush’s secretary of state, Baker served as Treasury secretary under Ronald Reagan. Paulson served as Treasury secretary under George W. Bush, while Shultz was Treasury chief under Richard Nixon. Feldstein served as chairman of the Council of Economic Advisers (CEA) and chief economic adviser to Ronald Reagan, while Mankiw chaired CEA under George W. Bush.

Congressional Republicans and oil and gas industry groups have criticized all efforts to enact carbon taxes, preferring cap-and-trade systems. However, carbon taxes actually have been advocated for years by many of the world’s leading oil and gas companies, including ExxonMobil Corp., Royal Dutch Shell plc, BP plc, Total SA and Statoil ASA.

Implementing a widespread and effective price for carbon emissions is critical to realize the "full and positive impact" natural gas can have, six leading global producers, including BP and Shell said in 2015. Carbon pricing would create "clear, stable, ambitious policy frameworks that could eventually connect national systems,” reducing uncertainty and encourage the most effective ways to reduce emissions, they wrote.

Former ExxonMobil CEO Rex Tillerson, now secretary of state, long advocated for carbon taxes over cap-and-trade emission programs. Most Big Oil companies and many major independents, including Anadarko Petroleum Corp. and Apache Corp., already use carbon pricing on the expectation that emissions eventually will be regulated.

President Trump has emphasized that he wants to promote more fossil fuel extraction rather than curb carbon emissions. And carbon tax proposals have been mixed. A recent proposed carbon tax failed in a ballot initiative in Washington state.

Baker and members of the new council were to meet with Gary Cohn, who heads President Trump’s National Economic Council. They also were expected to speak with White House Chief of Staff Reince Priebus and counselor Kellyanne Conway.

Baker told the Post he was unsure how the idea would be received, “but it is a good proposal, it’s simple, it’s conservative, it’s free market, it’s limited government.”

The council estimates that the average family of four would receive $2,000 a year in dividends if the fee were to begin at $40/ton. As the tax rises, so would dividends for the American public.

Everyone would receive the same amount of revenue from the tax regardless of income level.

After the plan was introduced, GOP elder Mitt Romney on Wednesday tweeted his endorsement: “Thought-provoking plan from highly respected conservatives to both strengthen the economy & confront climate risks.”

Not every group is in support of the plan, including environmental advocate the Natural Resources Defense Council (NRDC). 

“Putting a price on carbon could be an important part of a comprehensive program,” said NRDC President Rhea Suh. “It can’t do the job alone, though, and is not a replacement for carbon limits under our current laws.”

Recent Articles by Carolyn Davis

Comments powered by Disqus