Old-Guard Republicans to Push Carbon Tax at White House Meeting

A group of prominent Republicans and business leaders backing a tax on carbon dioxide were taking their case Wednesday to top White House aides, including chief economic adviser Gary Cohn.

The group, including former Treasury Secretaries Hank Paulson and James Baker, is pressing President Donald Trump to tax carbon dioxide in exchange for abolishing a slew of environmental regulations. They unveiled their plan with a press conference in Washington and an op-ed in the Wall Street Journal.

“We know we have an uphill slog to get Republicans interested in this,” Baker said before heading to the White House. But “a conservative, free-market approach is a very Republican way of approaching the problem.”

Other possible attendees at the meeting include the president’s daughter, Ivanka Trump, who weighed climate change policy during the campaign, and Vice President Mike Pence.

The Republican and business leaders, calling themselves the Climate Leadership Council, lend their stature to an approach for addressing climate change that mirrors an idea already advanced by Exxon Mobil Corp. Supporters say the tax is a conservative solution to climate change that replaces a regulatory regime with a free-market approach for addressing the greenhouse gas emissions.

Wal-Mart Founder

Paulson, who served as Treasury secretary under President George W. Bush, previously has advocated a carbon tax through his eponymous think tank, the Paulson Institute. Baker, who served as secretary of state and Treasury secretary under two Republican administrations, as well as former Secretary of State George Shultz, Wal-Mart Stores Inc. founder Rob Walton and Sequoia Capital Operations LLC partner Thomas Stephenson, among others. Economic advisers to former presidents George H.W. Bush and Ronald Reagan also are involved in the effort.

“Climate change poses an unacceptable risk to our climate and to our economy,” Paulson said in a statement. “Putting a price on carbon is by far the most efficient and effective way to restrict emissions.”

Baker himself conceded he remains “somewhat of a skeptic about the extent to which man is responsible for climate change” but the “risks are too great to ignore.”

The plan faces strong political headwinds; both Trump and a majority of the House of Representatives have come out against a carbon tax in the past year. Trump also has pledged to do away with environmental regulations limiting emissions of carbon dioxide

But the idea of a carbon tax, long favored by economists as the most straightforward way to address climate change, could gain traction as part of a broad tax overhaul on Capitol Hill.

Carbon Pricing Spreads Along With Debate About Payoff: QuickTake

The blueprint involves a $40 tax on every metric ton of carbon dioxide released by burning fossil fuels, with the price climbing over time. To avoid an undue burden on the poor from the higher energy bills that would result, the projected $200 billion to $300 billion in annual revenue would be redistributed to households in the form of quarterly checks from the Social Security Administration. Families of four would see an average annual payout of $2,000 under the plan.

The proposal also calls for border adjustments that would act to hike the costs of products imported from countries that do not put a price on carbon.

Martin Feldstein, who headed former President Ronald Reagan’s Council of Economic Advisers, said the tax would be imposed at the point fossil fuels enter the economy, such as when oil leaves the refinery or coal leaves the mine. “The tax at the source is then built in to the prices of the products made from that raw material,” Feldstein said.

Romney Tweet

Former Republican presidential candidate Mitt Romney described the proposal in a tweet as a “thought-provoking plan from highly respected conservatives to both strengthen the economy and confront climate risks.”