Here are two surprising facts: Major oil companies are advocating for a self-imposed tax to combat climate change, and they intend for the benefits to support American families.
Prominent oil corporations such as ExxonMobil (XOM), BP (BP), Royal Dutch Shell (RDSA), and Total (TOT) have shown support for a carbon tax initiative proposed on Tuesday that is gaining momentum in Washington.
Additional notable supporters include billionaire former New York City mayor Michael Bloomberg, renowned physicist Stephen Hawking, and former U.S. Treasury Secretary Larry Summers.
The proposal has garnered attention following President Trump’s decision to withdraw from the Paris climate agreement, distancing the U.S. from international efforts to cut carbon emissions and curb temperature rise.
The Climate Leadership Council, which played a key role in forming this unprecedented coalition, placed an advertisement in the Wall Street Journal on Tuesday, promoting the initiative as “pro-environment, pro-growth, pro-jobs, pro-competitiveness, pro-business, and pro-national security.”
The advertisement further articulated that the plan reflects “the conservative principles of free markets and limited government.”
Here’s a breakdown of the proposed plan:
Companies would incur a tax on the carbon dioxide emissions resulting from mining, drilling, and other U.S. operations. The fee would initiate at around $40 per ton and increase over time.
The generated tax revenue would be distributed to Americans—independent of income—via monthly payments administered through the Social Security Administration.
The Climate Leadership Council estimates that the carbon tax could provide an approximate $2,000 benefit for a family of four in its initial year.
Companies would receive a rebate when they export their goods abroad, maintaining a level playing field on a global scale.
Furthermore, products imported into the U.S. would face taxation based on their carbon footprint, with proceeds from this “border adjustment tax” funneled directly to American citizens.
The organization also posits that some environmental regulations may become unnecessary if the carbon tax reaches sufficiently high levels.
Related: The reward for improved business practices: $12 trillion
In an op-ed published in the Washington Post on Tuesday, Summers and former Secretary of State George Shultz elucidated that the proposal addresses Trump’s reservations regarding the Paris agreement by ensuring American companies are not disadvantaged. They comforted those who are doubtful by stating, “our extensive experience in Washington has taught us that surging from the unbelievable to the inevitable can sometimes be quite swift.”
However, the proposal may not receive unanimous support. Critics point out that the tax burden could shift from companies to consumers, while some environmental advocates argue that market-driven solutions cannot effectively replace hands-on regulations for reducing carbon emissions.
“ExxonMobil might try to disguise this initiative as a climate action endeavor, but its primary goal is to shield executives from accountability regarding climate pollution and fraudulent practices,” criticized Greenpeace campaigner Naomi Ages.
Related: Solar power is undermining coal, despite Trump’s assurances
Experts also indicate that implementing the plan could pose significant challenges.
“When viewed in isolation from global contexts, the plan has merits,” commented Gregor Irwin, chief economist at strategic advisory firm Global Counsel. “However, the moment you attempt to integrate it with international systems… it becomes exceedingly complex and convoluted.”
Irwin noted that accurately computing fair carbon taxes for imports, ranging from oil to automobiles to electronics, would be arduous.
Furthermore, the initiative requires robust political support and federal legislation—a process that could span several years.
“It may take another presidential election cycle for this to come to fruition,” remarked Ted Halstead, leader of the Climate Leadership Council.
Halstead, involved in bringing Big Oil to the negotiating table, expressed his hope for the U.S. government to progress with the carbon tax; however, he acknowledged that nations like France, China, or the U.K. could spearhead this initiative first.
“This concept could take root in any country,” he asserted, highlighting that enacting such policies in one nation could potentially trigger a “domino effect.”
The Climate Leadership Council unveiled a list of companies and influential figures endorsing the carbon tax proposal on Tuesday. Here are some other notable proponents:
General Motors(GM)
Johnson & Johnson (JNJ)
Procter & Gamble (PG)
Pepsi (PEP)
Unilever (UL)
Hedge fund mogul Ray Dalio
Indian industrialist Ratan Tata
