Major oil, power and consumer products companies are releasing their most specific plans yet for a nationwide tax on carbon dioxide that promises to halve U.S. emissions of the greenhouse gas by 2035.
The more detailed blueprint set to be unveiled Wednesday by the Climate Leadership Council calls for a $40 tax to be levied on each ton of carbon dioxide, with the fee increasing at least 5% every year and proceeds rebated to American consumers.
The tax would be imposed on carbon dioxide emissions at the mines and power plants whose products generate the greenhouse gas.
In exchange for the fee, federal regulations targeting carbon dioxide emissions from power plants, refineries and other industrial facilities would be swept away or preempted -- a regulatory rollback seen as critical to ensuring continued support from businesses and winning votes from conservative lawmakers in Congress.
The council, which unites major oil companies as well as conservation groups also agreed to jettison one of its most controversial initial proposals -- a shield immunizing climate-related lawsuits -- after it was panned by environmental activists.
Other members of the council include former Federal Reserve chairs Janet Yellen and Alan Greenspan; two former Republican secretaries of state, James Baker and George Shultz; and companies such as Johnson & Johnson and Procter & Gamble Co.
“It’s one thing to assemble an odd bedfellow coalition around general principles, and quite another to work out the details of an actionable plan, which we’ve now done,” said Ted Halstead, head of the Climate Leadership Council.
The effort comes as several 2020 Democratic candidates, including Joe Biden and Elizabeth Warren, endorse putting some kind of price on carbon dioxide, with Pete Buttigieg and Andrew Yang going even further to back a tax-and-dividend approach that would rebate the revenue to households, helping insulate poor and middle-income Americans from higher energy costs.
High-profile Republicans, including President Donald Trump’s former Defense Secretary Jim Mattis also have supported the idea.
There is also increasing political pressure to to confront climate change, as rising seas, more intense storms and severe droughts underscore the urgency. Polls show voters view the changing climate as a top issue heading into next year’s election, with young voters from both parties particularly eager to see bipartisan efforts to combat it.
The carbon tax-and-dividend approach has emerged as a favored business alternative to the Green New Deal and other progressive Democratic plans to rapidly decarbonize U.S. electricity.
ExxonMobil Corp., BP Plc, Royal Dutch Shell Plc and other oil companies are spending millions underwriting an advocacy campaign to bolster the Climate Leadership Council blueprint, with broadcast advertisements planned soon for Washington and other markets. The group has developed a multi year strategy for advancing the initiative on Capitol Hill and is aiming for the introduction of bipartisan legislation later this year.
The council argues that trading regulations for a carbon price would promote economic growth while giving companies more certainty and incentives to make long-term investments in driving down emissions.
Under the group’s new road map, the per-ton tax would automatically increase every year at 5% above inflation, but if emissions reductions are not on track, even bigger boosts would be triggered. To boost American competitiveness, fees would be slapped on imports of foreign, carbon-intensive products coming from countries without comparable environmental plans.