HOUSTON (CN) — Crowding around the ever-growing carbon tax drum circle, major oil companies are rubbing elbows with college students and economists.
The Climate Leadership Council’s proposal to charge electricity providers, oil and gas drillers, refiners and chemical plant operators a starting $40 per ton fee, or tax, on carbon emissions would hit Americans in the pocketbook, raising gasoline prices by 36 cents per gallon, according to its founder Ted Halstead.
Electric bills also would go up. Driving habits would change, especially for residents of Hawaii and California, where gas prices are already over $3.50 per gallon.
But under the council’s plan, all the taxes would be returned to the public as quarterly dividends. Halstead says a family of four would get $2,000 a year and the dividend would grow as the fee increases by 5% per year.
“According to the U.S. Treasury, 70% of American families — including the most vulnerable — would come out ahead, receiving more in carbon dividends than they pay in increased energy costs,” Halstead wrote in a Wall Street Journal op-ed in September 2019.
Halstead says the Republican-conceived plan shows how a “climate solution” can be based on the bedrock conservative principles of a free market and limited government.
To make the tax acceptable to industry, the council’s plan calls for “streamlining of regulations that are no longer necessary.”
Among several competing U.S. carbon tax proposals, it has gained the most traction, thanks to the millions of dollars pouring into its public relations campaign from its roster of Fortune 500 founders, including IBM, Microsoft, Johnson & Johnson, PepsiCo, AT&T, Ford Motor Co., BP, Shell and Chevron.
Experts say oil companies are pining for stability in the face of impending climate legislation, and the sooner they have a carbon tax baked into their costs the better to guide their mineral lease investments.
Smaller drilling firms are laying off workers as they struggle to stay afloat with oil prices below $60 per barrel, and a carbon tax would cut into their profit margins.
Former Pennsylvania Congressman Ryan Costello is managing director of the Climate Leadership Council’s lobbying group, Americans for Carbon Dividends.
“Introducing a bill in Congress is our top priority for 2020,” he said in an email.
He said despite the conventional wisdom that climate legislation is a nonstarter with Republicans in Congress, Republican lawmakers are growing concerned the party is turning off young voters by not addressing climate change.
The council’s plan is backed by Young Conservatives for Carbon Dividends, a group of Republican college students, and more than 3,500 economists.
University of Houston energy economics professor Ed Hirs is not one of them.
“I think it’s simply a naïve talking point that in practice would not work,” he said.
Because Louisiana and Texas are centers of the oil and gas industry, the states would bear a disproportionate amount of the taxes, Hirs said, and “naturally there will be layoffs” as refiners reconfigure or reduce their operations.
Hirs sees the proposed dividend in the Climate Leadership Council’s plan as a ploy to win votes for Republicans.