Big Oil, GM and ‘Progressive Republicans’ Pushing for Carbon Taxes

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Though it may seem unlikely; global oil giants Exxon Mobil, BP, Royal Dutch Shell, and Total – along with seven other big companies including General Motors – have recently voiced their support for a proposed US federal tax on carbon, which would help combat global warming.

Big Oil, GM and Progressive Republicans Pushing for Carbon Taxes

This past Tuesday the 11 companies and a varied group of other big-name backers including former New York City Mayor Michael Bloomberg, physicist Stephen Hawking, Indian industrialist Ratan Tata, and more signed on as “founding members” of the Climate Leadership Council. Other companies involved in the Council are Pepsico, Johnson & Johnson, Procter & Gamble, Santander, Unilever, and Schneider Electric.

The Council will be promoting a market-based climate strategy, devised by Republican Party progressives as well as former secretaries of state (James A Baker and George Schultz), a conservative Nobel economist (Martin Feldstein), an ex-US Treasury Secretary (Henry Paulson) and others.

The climate strategy is made up of four parts:

  1. The first is a tax on CO2 from industrial activities in the United States, starting at $40 a ton with periodic increases.
  2. The second portion of the strategy is to take the revenue raised by the tax and pay it out monthly to all taxpayers, equivalent to about $2,000 per family of four, in the initial 12 months.
  3. The third portion is a policy that would help companies in the United States compete in the global economy, by having the United States pay a border tax on all imports from nations that do not impose fines for their carbon pollution.
  4. Finally, the US will eliminate certain costly environmental regulations for carbon in a responsible and safe manner, as they would no longer be necessary amid the success of increases by the proposed tax.

Big Oil, GM and Progressive Republicans Pushing for Carbon Taxes

The Council describes the carbon tax proposal as being “pro-environment, pro-growth, pro-jobs, pro-competitiveness, pro-business and pro-national security.”

The announcement about the support for the tax comes 20 days after Pres. Donald Trump announced that he would be pulling the nation out of the Paris climate agreement.

Both Schultz and former Treasury Secretary Lawrence Summers said that the plan addresses Trump’s claim that the Paris accord leaves American companies at a disadvantage.

The proposition has some critics including several prominent environmental groups who are skeptical that Republicans in Congress will give their support to a carbon tax, for a variety of ideological and political reasons. Criticism was also brought forth over the fact that regulation might prove more effective than market forces at controlling CO2 emissions