Here’s a surprising development: Major oil companies are advocating for a self-imposed tax to combat climate change, with the intent of benefitting American families.
Leading oil corporations such as ExxonMobil (XOM), BP (BP), Royal Dutch Shell (RDSA), and Total (TOT) have endorsed a carbon tax initiative that is gaining momentum in Washington.
Other prominent supporters include billionaire and former New York Mayor Michael Bloomberg, physicist Stephen Hawking, and former U.S. Treasury Secretary Larry Summers.
Support for this plan has surged since President Trump announced the U.S. withdrawal from the Paris climate agreement, distancing the country from global initiatives aimed at reducing carbon emissions and controlling temperature increases.
The Climate Leadership Council, which played a pivotal role in forming this unexpected alliance, published an advertisement in the Wall Street Journal on Tuesday, promoting the plan as “pro-environment, pro-growth, pro-jobs, pro-competitiveness, pro-business, and pro-national security.”
The advertisement further emphasized that the proposal reflects “the conservative values of free markets and limited government.”
Here’s the framework of the plan:
Entities will incur a tax on the carbon dioxide emissions produced from extraction, drilling, and other operations within the U.S., initially set at approximately $40 per ton, with increases expected over time.
The revenue generated from this tax would be distributed to Americans—regardless of their income—through monthly payments managed by the Social Security Administration.
According to the Climate Leadership Council, this carbon tax could potentially yield $2,000 for a family of four in its first year.
Furthermore, companies would receive a rebate for goods exported internationally to maintain competitive parity on a global scale.
Conversely, imports would be taxed according to their carbon output, with proceeds from this “border adjustment tax” allocated directly to American citizens.
The organization also posits that certain environmental regulations might become unnecessary if the carbon emission tax is sufficiently substantial.
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In an opinion piece in the Washington Post on Tuesday, Summers and former Secretary of State George Shultz contended that the initiative addresses Trump’s apprehensions regarding the Paris accord by ensuring that American businesses are not put at a disadvantage. They reassured doubters, stating, “our extensive experience in Washington has demonstrated that shifts from the inconceivable to the inevitable can occur with great speed.”
However, the proposal might not garner unanimous backing. The tax burden could be transferred from businesses to consumers, and some environmentalists contend that market mechanisms cannot replace sound regulations in the effort to reduce carbon emissions.
“ExxonMobil may attempt to present this as ecological advocacy, but its primary goal is to shield executives from legal responsibility for climate harm and deceit,” remarked Naomi Ages, a Greenpeace campaigner.
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Analysts have noted the challenges of implementing this plan.
“When viewed simplistically, it appears promising,” stated Gregor Irwin, chief economist at the strategic advisory firm Global Counsel. “But as soon as you delve into how they intend to reconcile it with global counterparts, it quickly becomes complicated and chaotic.”
Irwin indicated that determining fair carbon taxes on a range of imported goods from oil to automobiles to semiconductors would be a significant hurdle.
Additionally, the plan requires political will and federal legislation, a process that could extend across years.
“It may necessitate another presidential election before this is fully implemented,” suggested Ted Halstead, head of the Climate Leadership Council.
Halstead, who helped garner support from the oil sector, expressed a desire for the U.S. government to advance the carbon tax, while also acknowledging that countries like France, China, or the U.K. might lead the charge instead.
“The concept can be initiated in any country,” he stated, noting that implementing such regulations in one nation could trigger a “domino effect.”
On Tuesday, the Climate Leadership Council released a compilation of companies and influential figures who endorse the carbon tax proposal. Here are other notable supporters:
General Motors(GM)
Johnson & Johnson (JNJ)
Procter & Gamble (PG)
Pepsi (PEP)
Unilever (UL)
Hedge fund magnate Ray Dalio
Indian industrial tycoon Ratan Tata
