If the issue moves at all, it will be the major oil companies that get on board to push it. To that end, Exxon says that it will support a carbon tax that is revenue neutral, or one where the revenues from the tax are plowed back into economy in the form of clean energy investments or used to reduce other corporate taxes.
“Exxon may have its own competitive reasons for getting behind the tax: It is a major producer of natural gas, a relatively low-carbon alternative to coal. And a carbon tax would boost demand for gas,” writes Howard Gleckman, in a column for Forbes.
With that, he says that Exxon should be taken at its word — that it prefers a single federal metric for measuring carbon emissions as opposed to a patchwork of state tax and regulatory laws. It’s a position that it has outlined in its 2105 report to shareholders on corporate citizenship.
Exxon, of course, is now under intense scrutiny from some state attorneys general for allegedly hiding information that it had known about global warming going back decades. That pressure, along with the fact that it is diversifying its energy holdings to include more renewables and natural gas, have prompted it to get out front — to work with regulators to find new solutions to climate change.
Enter the House Republicans, which just took a symbolic vote that said a carbon tax would only serve to raise the price of energy and they would reject any attempts to enact one. Is there any possible flexibility here?
Well, if Hillary Clinton wins the presidency, she has already said that addressing the climate “crisis” is atop her priorities. So, either the executive branch and the legislative branch can battle to a standstill or they can work with one another. How would they do that?
Among the ideas under discussion is the scaling back of certain regulations in favor of a carbon neutral tax. Even that is tough sell, however, because it would require climate skeptics to acknowledge the problem. That then circles back to Exxon, which has to be motivating force here — if, indeed, it is in search of a solution.
Under a carbon tax, government would tax industrial facilities such as oil companies and electric utilities according to their carbon footprints that can be readily measured.
A joint report issued by the Brookings Institution and the American Enterprise Institute says that pricing carbon is the most efficient way of reducing carbon dioxide releases that are tied to global warming. A $16 tax per ton would raise $1.1 trillion in the first 10 years.