Report: Baker-Shultz carbon tax would top Paris goals

Source: Nick Sobczyk, E&E News reporter • Posted: Tuesday, September 11, 2018

The Climate Leadership Council thinks its carbon tax proposal could put the U.S. on track to exceed its goals under the Paris climate agreement.

In an analysisreleasedyesterday, the group says the Baker-Shultz Carbon Dividends Plan could reduce greenhouse gas emissions 32 percent by 2025 compared to 2005 levels.

That would go beyond the 26 to 28 percent goal set under the Paris Agreement, and it would far outpace the reductions once expected under the Obama-era Clean Power Plan, according to the analysis.

Named after former Republican secretaries of State James Baker and George Shultz, the plan would put a tax on carbon, starting at $40 per ton and gradually increasing over time. The tax would be returned to the public through monthly or quarterly dividend checks.

The Climate Leadership Council began pushing the idea last year, and an offshoot group — Americans for Carbon Dividends — hired Squire Patton Boggs to lobby on the plan in July (Greenwire, July 26).

The analysis provides an optimistic outlook for an idea conservatives in the advocacy world are hoping can convince reluctant Republicans on Capitol Hill to act on climate change.

Still, the group acknowledges Congress is slow to change, said Greg Bertelsen, senior vice president at the Climate Leadership Council.

“We’ve always viewed this as something that wasn’t ripe for this Congress,” he said. “But we see a tremendous amount of momentum moving toward this policy solution. We see members on both sides increasingly interested in having these conversations.”

The analysis assumes Congress considers the plan next year and implements it starting in 2021. Building on data and modeling from the U.S. Energy Information Administration, Resources for the Future and the Rhodium Group, it suggests emissions reductions would come quickly as a result of fuel switching, increased investments in zero-carbon sources and more efficient use of fossil fuels.

The report includes a forward authored by several political big names, including Shultz, former Treasury Secretary Lawrence Summers, former Federal Reserve Chairwoman Janet Yellen and former EPA Administrator and New Jersey Gov. Christine Todd Whitman.

The Climate Leadership Council also released pollingshowing 2 to 1 — 56 percent to 26 percent — support for a carbon dividend plan.

But as lobbying efforts for carbon pricing shape up into the next Congress, the plan will likely face criticism from the left.

Some environmental groups don’t like the rollback of EPA greenhouse gas regulations included in the proposal. And they’re also not fans of the so-called liability waiver for fossil fuel companies, particularly given that the Climate Leadership Council gets funding from several major oil companies.

Still, Bertelsen said their approach has been a hit with lawmakers and the public so far, especially the idea of distributing dividends back to Americans. The group is hoping to see a real push for the policy in the next Congress, he added.

“It’s hard to speculate at this stage of the game exactly when that would take place,” Bertelsen said. “But we think that the tide is turning faster than most think and that we’ll be having a serious conversation about this policy in Congress sooner rather than later.”