National Post (National Edition)
Exxon puts up US$1M to lobby for carbon tax in U.S.
WASHINGTON •Aneffort to put a tax on carbon dioxide emissions in the U.S. just won an unlikely underwriter: a top producer of oil and gas.
Exxon Mobil Corp. is putting US$1 million into a political campaign that, if successful, would effectively spawn a tax tied to the company’ score products.
The move is consistent with Exxon’s long-standing support for a price on carbon dioxide, imposed, instead of an array of environmental regulations that already elevate the cost of fossil fuels. But it marks the very first such contribution by a major oil company to the effort, known as Americans for Carbon Dividends.
With Exxon’s donation, the biggest U.S. oil company is joining the nation’s largest nuclear power generator and major renewable energy boosters in bankrolling the political campaign to put a tax on emissions, with revenue the levy raises redistributed to U.S. households.
“This is the first time a U.S. oil and gas super major is putting real money behind a carbon-pricing effort; it’s just never been done before,” said Ted Halstead, chief executive of the Climate Leadership Council that developed the underlying plan. “A million-dollar gift is not small money for this type of thing.”
Power generator Exelon Corp. already committed to giving US$2 million to the effort over the next two years. Renewable power manufacturer First Solar Inc. and the American Wind Energy Association are each contributing US$100,000 per year. the donations are helping pay for a robust lobbying campaign led by former senators John Breaux and Trent Lott and advised by several political operatives.
The effort comes as scientists warn that action is urgently needed to arrest carbon-dioxide emissions and stave off the most catastrophic consequences of climate change. The United Nations Intergovernmental Panel on Climate Change insisted that countries must take “unprecedented” action to combat climate change, warning in a report Sunday that existing global efforts are insufficient to keep warming under a critical 1.5-degree Celsius threshold.
And on Monday, a Nobel Prize was given to a pair of economists who have studied sustainable growth, including one — William D. Nordhaus of Yale University — credited with arguing that uniformly imposed carbon taxes would be the most efficient strategy for addressing the problems caused by greenhouse-gas emissions.
“We’ve been supportive of a revenue-neutral price on carbon for a decade,” said Exxon Mobil spokesman Scott Silvestri, referring to a tax or fee that does not actually raise revenue for the government. “Applying a uniform cost across the economy is consistent with our principles on how to manage the risk of climate change.”
Exxon and other oil companies had already signed on as advocates of the underlying carbon plan, which has the backing of a broad coalition of prominent conservatives, corporations and economists, including former Federal Reserve chair Janet Yellen.
Under the Climate Leadership Council’s blueprint, every ton of carbon dioxide would be hit with a tax, potentially starting at US$40 per ton and rising over time, with revenue redistributed to households in the form of quarterly dividend cheques. In exchange, regulations aimed at cutting carbon-dioxide emissions — and much of the Environmental Protection Agency’s authority to regulate them — would be eliminated.
The carbon tax would boost the cost of energy derived from oil, natural gas and coal, thereby discouraging the use of those fossil fuels and encouraging the development of low-carbon power alternatives. The resulting carbon cuts would exceed reductions the U.S. had promised as part of the Paris climate accord, according to an assessment by Resources for the Future, a non-partisan think tank.