Leading Republican of the old Guard like former Secretary of State James Baker are urging the White House to introduce a carbon tax. At the same time, new jobs should be created and environmental regulations reduced. John Dyer reports from Boston.
The group of prominent Republican statesmen calling for a carbon tax are well aware that they have their work cut out for them.
“We know we have an uphill slog to get Republicans interested in this,” said James Baker, a former Secretary of State and the Treasury under ex-Presidents Ronald Reagan and George H.W. Bush before a White House meeting on Wednesday.
“A conservative, free-market approach is a very Republican way of approaching the problem.”
Unsure greenhouse gases are to blame
Illustrating the nature of that uphill battle, Baker – a Texas attorney with close connections to the oil industry – said he wasn’t even sure greenhouse gases caused climate change.
“I really don’t know the extent to which it is man-made, and I don’t think anybody can tell you with certainty that it’s all man-made,” said the 86-year-old Baker.
“The risk is sufficiently strong that we need an insurance policy and this is a damn good insurance policy.”
Trump listening closely
A new group called the Climate Leadership Council drafted the proposal.
The council includes Hank Paulson, a former Goldman Sachs Chief Executive and Treasury Secretary under ex-President George W. Bush; former Secretary of State George P. Shultz; Rob Walton, former Walmart board chairman; and a host of other financiers, climate change experts and others.
The White House didn’t issue a comment on the meeting. But council founder Ted Halstead said Trump listened closely to the group’s ideas.
“Two weeks into this new administration, we have positioned our solution as the most promising climate solution, if they want to go there,” said Halstead, who has founded non-partisan public policy think tanks in Washington, DC.
“It is pro growth, pro competition, pro jobs, deregulatory, and it will help the working-class voters that Trump promised to help.”
Help for low income Americans
The plan would levy a USD 40 tax per metric tonne of carbon dioxide released in a power plant, factory or other operation. That price would automatically increase over time.
The tax would generate around USD 250 billion annually, the group said. The government would then distribute those revenues to Americans, with low-income Americans earning more to help pay for their higher energy bills. A family of four would see an annual payout of around USD 2,000, the group said.
But it’s not clear whether the plan will make progress on Capitol Hill as Trump has repeatedly spoken against a carbon tax. And although he has changed other policy positions since his election late last year, earlier this week he laid out his “America First Energy Plan” that would end restrictions on shale, oil natural gas and coal production in order to create jobs but not adopt a new tax.
Tariffs and deregulation
Republicans who control the U.S. House of Representatives largely oppose new taxes of any sort, too. This summer, they voted in favour of a non-binding resolution that said carbon taxes were “detrimental to American families and businesses”.
But the plan has other elements that appeal to Trump and some Republican lawmakers. U.S. Secretary of State Rex Tillerson, a former Exxon chief executive, supports a carbon tax that resembles the council’s suggestions, for example.
The plan would also impose tariffs on foreign goods entering the US if their country of origin didn’t have a carbon tax, a vehicle for Trump to make good on his campaign pledges to punish foreign companies that harm American workers with their cheap goods.
Importantly, however, the plan would also cut many environmental regulations that now aim at curbing emissions.
Environmentalists, energy companies oppose the plan
That provision led environmentalists to pan the idea.
“Putting a price on carbon could be an important part of a comprehensive program,” said Natural Resources Defense Council President Rhea Suh in a statement. “It can’t do the job alone, though, and is not a replacement for carbon limits under our current laws.”
Energy companies opposed the plan, too.
“This is not a climate proposal. It’s a tax proposal,” said Thomas Pyle, president of the American Energy Alliance, a trade group. “There’s no need to trade Obama’s climate regulations for a carbon tax. Donald Trump has already promised to undo them.”
Americans divided on the idea
A Yale University poll late last year found that 66 per cent of American voters supported a carbon tax. Even 48 per cent of Trump voters supported a tax.
But voters in Washington State – where the environmental movement is strong – voted down a proposed carbon tax in a recent ballot initiative. The initiative failed because liberals argued over whether the tax revenues should pay for clean technology or go directly to the public.