Some of the world’s largest oil and natural gas producers and influential corporate leaders on Tuesday joined a push to enact a U.S. carbon tax in an effort to slow climate change.
ExxonMobil Corp., BP plc, Royal Dutch Shell plc and Total SA are among the corporate founders of the Climate Leadership Council, an advocacy group to replace some U.S. environmental regulations with a simplified carbon tax on businesses.
The “conservative climate solution” initially was launched earlier this year by GOP elder statesmen James A. Baker and George Shultz. The group’s plan would tax greenhouse gas (GHG) emissions and return the money to taxpayers as a “climate dividend.”
Baker had met with White House officials at the time to advocate for the national carbon tax, but the proposal was considered a nonstarter.
The council’s plan involves eliminating 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.
The council estimates that the carbon tax would raise more than $200 billion a year, with the rate increasing over time and depressing demand for fossil fuels. An average family of four would receive about $2,000 in the first year as a carbon dividend, according to the council.
ExxonMobil CEO Darren Woods, who had used his first blog post in February to advocate for a revenue-neutral carbon tax, said Monday the council offers a “sensible” approach to cutting emissions without burdening the economy.
“We have been encouraged by the proposal put forth by the Climate Leadership Council as it aligns closely with our longstanding principles,” Woods said.
General Motors (GM), the largest U.S. automaker, also is a founding member of the council.
“We acknowledged long ago that climate change is real and that lowering emissions is both a social imperative and an economic opportunity,” said GM’s management. “Addressing climate change in an effective and sustainable manner requires a holistic approach involving all sectors of the economy.”
The council on Tuesday used a full-page advertisement in the Wall Street Journal to call on the United States to enact a consensus climate solution that "bridges partisan divides, strengthens our economy and protects our shared environment."
The underlying idea is that by making energy derived from fossil fuels more expensive, market forces would more quickly and effectively move toward renewable energy and low-carbon solutions. To protect U.S. companies, the plan recommends a border tax adjustment to increase the cost of goods arriving from nations that do not have a similar carbon tax.
According to the council, companies that emit GHG also should be protected from lawsuits over their contributions to climate change.
Members of the council include Michael Bloomberg, former Energy Secretary Steven Chu, astrophysicist Stephen Hawking, hedge-fund magnate Ray Dalio and Harvard economist Larry Summers, a former Obama economic adviser.
The Trump administration already has moved to gut the Obama administration’s environmental legacy, and last month announced its intention to withdraw from the Paris agreement, the climate accord reached by more than 190 countries.