ExxonMobil and Stephen Hawking Just Agreed to the Same Climate Fix
ExxonMobil and Stephen Hawking Just Agreed to the Same Climate Fix
(Bloomberg) -- Less than three weeks after President Donald Trump pulled the United States from the 195-nation Paris Agreement on climate change, there's a new ragtag group of underdogs supporting carbon-cutting.
ExxonMobil Corp., Total SA, Raymond Dalio, Laurene Powell Jobs, Stephen Hawking, Ratan Tata, and Michael Bloomberg, the founder and owner of Bloomberg LP, among others, have signed on as "founding members" of a months-old group called the Climate Leadership Council. The organization is the brainchild of Ted Halstead, a serial think-tank entrepreneur, who set out to craft traditionally conservative ideas into a potential climate fix.
The Council has developed a draft policy that taxes climate pollution and redirects the money to taxpayers. The idea was first unveiled in February, when former Treasury secretaries James Baker and George Shultz presented it to the president's top economic adviser, Gary Cohn.
"When major fossil fuel producers are supporting a tax that will bear on fossil fuels," said former Treasury Secretary [and CLC member] Lawrence Summers, "it's hard to believe that it isn't a good idea."
The plan is made up of four parts:
- A carbon tax on fossil-fuel combustion lets energy prices reflect the damage done to the climate from carbon dioxide emissions.
- Money raised by the levy is refunded monthly to taxpayers—turning distant climate benefits into immediate cash.
- A border tax on goods from countries without a carbon tax ensures that U.S. companies remain competitive.
- Finally, the U.S. safely rolls back climate regulations.
A CLC analysis released in February suggests that a $40 tax on every ton of CO2 may meet the climate goals set by President Barack Obama twice as quickly as his own policies would have (PDF).
Requests for outlooks on climate policy were not returned from two relevant Republican-led Senate and House committees and the Heritage Foundation.
Releasing a plan is one thing. Enacting the plan is another.
Broad political support is a prerequisite for ambitious legislation, which means that coalition-building far from the halls of Congress enables voting that eventually transpires there. Without a union of business and NGOs, for example, a climate bill that passed the House of Representatives in 2009 (and died in the Senate), probably would have been killed in committee, according to Eric Pooley, a senior vice president at the Environmental Defense Fund.
"Since the mid/late 70s, no major legislation passed unless a broad array of interests put their collective shoulder to the wheel and shoved really, really hard," Pooley said in an email. "There has to be political momentum."
Halstead is attempting to build that momentum by earning support from groups as diverse as BP Plc, Banco Santander SA, and environmental NGOs such as the Nature Conservancy and Conservation International. The 11 companies included as founding members together have a market capitalization of $1.9 trillion and annual revenue of $1.4 trillion. They operate in all 50 states and employ 1.6 million globally. (The council takes no corporate money. More than $2.5 million has been raised or committed from various philanthropic foundations and individuals.)
It's not an accident that several of the newly announced founding members are foreign companies. Halstead said that the council initiative is made for the U.S. but also designed for implementation in virtually any country. The key to contagion is the border adjustment. If nations with a carbon tax place a carbon levy on imports, the exporters may come to their senses, the thinking goes, and tax their own carbon rather than pay for it through trade.
Unfortunately, no one who's spent more than a half an hour in Washington can expect a simple idea to pass and fix the world.
To contact the author of this story: Eric Roston in New York at eroston@bloomberg.net.
To contact the editor responsible for this story: Josh Petri at jpetri4@bloomberg.net.