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Climate
A very exciting thing happened February 8. A group of senior Republicans released a proposal for a revenue-neutral carbon
tax—the first time leading Republicans have put forth a concrete market-based climate solution.
The group, working together under the Climate Leadership Council, includes former Treasury secretaries Henry
Paulson, George Shultz, and James Baker III. The Council’s plan, the Conservative Case for Carbon Dividends, calls for
a carbon tax starting at $40 per ton that rises over time. All of the revenue would be returned to households as a quarterly
dividend, and border adjustment tariffs would be applied to carbon-intensive imports from countries lacking an equivalent
carbon-pricing mechanism. (For more information, visit www.clcouncil.org.)
If you would like to step up your advocacy and engagement on climate change, here are two ways to do it. Sign on to the
Business Climate Leaders’ “Carbon Pricing Principles” by visiting www.businessclimateleaders.org/carbon_pricing_princi-
ples.aspx. Or, join more than 700 companies in sending President Trump a message to stick with the US commitments to
the Paris Climate Agreement by visiting www.lowcarbonusa.org.
The following article is reprinted with permission of The New York Times.—Geraldine Link, NSAA Director of Public Policy

A CONSERVATIVE CLIMATE SOLUTION:

REPUBLICAN GROUP CALLS FOR CARBON TAX

BY JOHN SCHWARTZ

A group of Republican elder statesmen is calling for a tax on estimated $200 billion to $300 billion a year, with the rate
carbon emissions to fight climate change. The group, led by scheduled to rise over time.
former Secretary of State James A. Baker III, with former The tax would be collected where the fossil fuels enter
Secretary of State George P. Shultz and Henry M. Paulson the economy, such as the mine, well or port; the money
Jr., a former secretary of the Treasury, says that taxing car- raised would be returned to consumers in what the group
bon pollution produced by burning fossil fuels is “a conser- calls a “carbon dividend” amounting to an estimated $2,000
vative climate solution” based on free-market principles. a year for the average family of four.
Mr. Baker [met February 8] with White House offi- The plan would also incorporate what are known as
cials, including Vice President Mike Pence, Jared Kushner, “border adjustments” to increase the costs for products from
the senior adviser to the president, and Gary D. Cohn, other countries that do not have a similar system in place,
director of the National Economic Council, as well as an idea intended to address the problem of other “free-
Ivanka Trump. rider” nations gaining a price advantage over carbon-taxed
In an interview, Mr. Baker said that the plan followed domestic goods. The proposal would also insulate fossil fuel
classic conservative principles of free-market solutions and companies against possible lawsuits over the damage their
small government. He suggested that even former President products have caused to the environment.
Ronald Reagan would have blessed the plan: “I’m not at all Attacks on the plan can be expected from many quar-
sure the Gipper wouldn’t have been very happy with this.” ters, even among supporters of a carbon tax in theory.
He said he had no idea how the proposal would be received Supporters of the Clean Power Plan are likely to oppose its
by the current White House or Congress. repeal. Democrats also tend to oppose limitations on the
A carbon tax, which depends on rising prices of fossil right to sue like those envisioned in the Baker proposal. And
fuels to reduce consumption, is supported in general by the idea of a dividend will no doubt anger those in the envi-
many Democrats, including Al Gore. Major oil companies, ronmental movement who would prefer to see the money
including Exxon Mobil, have come out in favor of the con- raised by the tax used to promote renewable energy and
cept as well. other new technologies to reduce emissions.
The Baker proposal would substitute the carbon tax for It is also unclear how the plan will be received by the
the Obama administration’s Clean Power Plan, a complex Trump administration. Stephen K. Bannon, the senior coun-
set of rules to regulate emissions which President Trump has selor to the president, has shown little interest in appeas-
pledged to repeal and which is tied up in court challenges, ing establishment Republicans. Breitbart News, which Mr.
as well as other climate regulations. At an initial price of $40 Bannon led before joining the Trump White House staff,
per ton of carbon dioxide produced, the tax would raise an has been outspoken in denying the science of climate change.

20 | NSAA JOURNAL | SPRING 2017