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Horowitz: Carbon Tax Proposal Gets New Life

Tuesday, June 26, 2018


James Baker

At the beginning of the Trump Administration and likely with some hope of influencing it, Republican heavyweights led by former Secretary of State James A. Baker launched an initiative to adopt a revenue-neutral carbon tax framed accurately as a business-friendly, market-based solution to climate change.

As it turned out, President Trump not only did not embrace the proposal, he announced his intention to pull out of the Paris Climate Accords and through his EPA Administrator Scott Pruitt has done everything possible to reverse the climate change initiatives put in place by President Obama.   

The group led by Baker included Secretary of State George Shultz and former Secretary of the Treasury Hank Paulson, among other formidable and accomplished individuals. But in terms of political influence this was very much a group of yesterday’s Republicans.

This past week, new life was breathed into the carbon tax proposal and from some unlikely places. Former Senate Leaders and current major K Street players, Trent Lott(R-MS) and John Breaux (D-LA) announced that they are the Co-Chairs of a new organization, Americans for Carbon Dividends, that will be backing the Baker/Shultz carbon tax proposal.  Money from the solar, wind and nuclear energy industry is backing what promises to be a well-funded advertising, public relations, and lobbying effort as one might expect, but it also seems as if some major oil companies may come on board.

Lott and Breaux outlined the proposal last week in an opinion piece published by The New York Times: “The plan is simple and elegant. It calls for an initial fee of $40 on every ton of carbon-dioxide emissions at the source, and raising it each year until we reach the necessary emissions reductions as businesses and consumers move to cleaner sources of energy. All revenue would then be disbursed to Americans. A family of four would receive approximately $2,000 a year. We would then export this approach and leadership on this issue to every corner of the global economy, while protecting the competitiveness of American companies.”

The primary audience for this reinvigorated effort to adopt a carbon tax is no longer the Trump Administration; its Congress.  And recognizing political reality, Lott, Breaux and the group’s CEO Ted Halstead are making a long-term play with the introduction of legislation planned for the next Congress.

Some environmentalists have reacted negatively to this  proposal because as part of it certain climate regulations would be eliminated.  But which-- if any regulations-- that are still standing after the Trump Administration’s all out assault should be sacrificed as part of a principled compromise that results in a carbon tax is a question that can be addressed in the future.

The injection of this new force that plainly states that climate change is a major challenge and offers a constructive solution into today’s polarized climate debate is a very positive development.   The fact that fossil fuel companies are considering coming on board demonstrates that even the oil industry recognizes that the combination of stepped up state and local  climate change initiatives and the reality of a warming planet, means that embracing the climate change denial of the Trump Administration is no substitute for a long-term strategy.

I for one welcome Senators Lott and Breaux to the climate fight.


Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.


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