Tags: james baker | carbon | tax | trump

Prominent Republicans Pitch Carbon-Tax Plan to Top Trump Aides

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Wednesday, 08 Feb 2017 08:01 PM

A group of prominent Republicans and business leaders pitched a tax on carbon dioxide to top White House aides Wednesday, selling the plan as an economic win that could drive job growth and yield environmental dividends too.

Former Secretary of State James Baker and other members of the new "Climate Leadership Council" pressed the case in a 45-minute meeting in the Roosevelt Room that included President Donald Trump’s top economic adviser Gary Cohn, Chief of Staff Reince Priebus and senior aide Kellyanne Conway.

"The signs were very encouraging," Ted Halstead, who founded the council, said after the meeting. "Two weeks into this new administration, we have positioned our solution as the most promising climate solution -- if they want to go there."

Baker also met briefly with Vice President Mike Pence, as the old-guard Republicans try to persuade the Trump administration that a carbon tax imposed in exchange for abolishing a slew of environmental regulations is an insurance policy against the risks of climate change.

"We know we have an uphill slog to get Republicans interested in this," Baker said before the White House meeting. But "a conservative, free-market approach is a very Republican way of approaching the problem."

White House spokesman Sean Spicer declined to comment on the idea.

The Republican and business leaders lent their stature to an approach for addressing climate change that mirrors an idea already advanced by Exxon Mobil Corp. Supporters say the tax is a conservative solution to climate change that replaces a regulatory regime with a free-market approach for addressing the greenhouse gas emissions.

The group includes Hank Paulson, who served as Treasury secretary under President George W. Bush and previously has advocated a carbon tax through his eponymous think tank, the Paulson Institute. Besides Baker, who served as secretary of state and Treasury secretary under two Republican administrations, other members include former Secretary of State George Shultz, Sequoia Capital Operations LLC partner Thomas Stephenson and former chairman of the board of Wal-Mart Stores Inc. Rob Walton. Economic advisers to former presidents George H.W. Bush and Ronald Reagan also are involved in the effort.

Baker himself conceded he remains "somewhat of a skeptic about the extent to which man is responsible for climate change," but the "risks are too great to ignore."

Political Headwinds

The plan faces strong political headwinds; both Trump and a majority of the House of Representatives have come out against a carbon tax in the past year. Trump also has pledged to do away with environmental regulations limiting emissions of carbon dioxide.

But the idea of a carbon tax, long favored by economists as the most straightforward way to address climate change, could gain traction as part of a broad tax overhaul on Capitol Hill.

The blueprint involves a $40 tax on every metric ton of carbon dioxide released by burning fossil fuels, with the price climbing over time. To avoid an undue burden on the poor from the higher energy bills that would result, the projected $200 billion to $300 billion in annual revenue would be redistributed to households in the form of quarterly checks from the Social Security Administration. Families of four would see an average annual payout of $2,000 under the plan, they say.

The proposal also calls for border adjustments that would act to hike the costs of products imported from countries that do not put a price on carbon. The tax would be imposed at the point fossil fuels enter the economy, such as when oil leaves the refinery or coal leaves the mine. In exchange, regulations aimed at cutting emissions would be eliminated.

Tax Proposal

The Republican-led House last June approved a non-binding resolution condemning the idea of a carbon tax as "detrimental to American families and businesses." The measure, which passed 237-163, was designed to lock in lawmakers’ positions, making it harder for those who lodged a vote opposing a tax to support one later on.

Trump himself has come out against the idea, rejecting a carbon tax in responses to a survey by the American Energy Alliance last March. Many of the conservative advocates guiding Trump’s energy and environment policy also eschew the idea.

The approach also runs counter to Trump’s campaign promise to help bring back coal-mining jobs. Because it generates more carbon dioxide emissions than natural gas and oil, coal would be the fossil fuel hardest hit by a tax on carbon.

Opponents fear that with the foundation laid now, lawmakers could seize on a carbon tax as a potent source of revenue to offset rate reductions during a future congressional debate on overhauling the tax code.

"This is not a climate proposal; it’s a tax proposal," said Thomas Pyle, head of the free-market advocacy group American Energy Alliance. "There’s no need to trade Obama’s climate regulations for a carbon tax. Donald Trump has already promised to undo them."

 

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A group of prominent Republicans and business leaders pitched a tax on carbon dioxide to top White House aides Wednesday, selling the plan as an economic win that could drive job growth and yield environmental dividends too.Former Secretary of State James Baker and other...
james baker, carbon, tax, trump
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2017-01-08
Wednesday, 08 Feb 2017 08:01 PM
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