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Eyeing hotter future, industry lays carbon tax groundwork

Business bigwigs head to the Hill this week to push climate legislation

Advocates for fighting global warming will get a boost from corporate firms advocating for a carbon tax. (Tom Williams/CQ Roll Call file photo)
Advocates for fighting global warming will get a boost from corporate firms advocating for a carbon tax. (Tom Williams/CQ Roll Call file photo)

Representatives from credit card firm Capital One, tech giant Microsoft, home-goods maker Johnson & Johnson and dozens of other companies are coming to Capitol Hill this week to do something unusual: Call for a new tax.

Officials from more than 75 companies will press Congress on Wednesday to pass climate legislation, including a “meaningful” national price on carbon emissions, according to Ceres, a sustainable investment group behind the effort.

A significant portion of the private sector supports a national carbon price in some manner, and this week’s push is to show lawmakers companies would back them if Congress taxed emissions, Anne Kelly, head vice president of government relations for Ceres, said in an interview.

“There’s an overwhelming consensus about carbon pricing needing to be part of the solution,” Kelly said. The message from the corporate suite to congressional offices is clear, she said: “We need your help in the form of a price on carbon and, basically, we’ve got your back.”

The campaign is part of a broader trend, including oil and gas companies Exxon Mobil Corp., BP and Royal Dutch Shell, to tax greenhouse gas emissions in exchange for rolling back regulations, but it is out of step with many congressional Republicans.

“A carbon tax is not the solution to address our environmental challenges,” Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee, said at a panel hearing last week.

Rep. Vern Buchanan of Florida told CQ Roll Call he does not support a carbon price. “I’m not interested in additional taxes,” he said. “I’d like to find stuff that we can compromise on and get done.”

And Sen. Cory Gardner of Colorado, who has a tough re-election fight in a state with some of the nation’s most aggressive clean-energy goals, said in a hallway interview that he, too, opposes taxing carbon emissions.

Several major fossil energy companies do support a carbon tax, as Ted Halstead, chairman and CEO of the Climate Leadership Council, a pro-carbon tax advocacy group, testified to the committee.

The council — which has earned support over the years from BP, Shell, Exxon, General Motors and economists and scholars such as the late Stephen Hawking and former Federal Reserve Chairs Ben Bernanke, Alan Greenspan and Janet Yellen — proposes a $40-per-ton fee that would rise over time. The government would collect the revenue and return it to U.S. citizens.

In exchange, under the deal, some regulations would be rolled back and companies would be granted a “liability shield” against civil litigation over the physical damages of climate change.

“Robust carbon taxes would also make possible an end to federal and state tort liability for emitters,” the plan reads in part. The highest-profile industry to be granted a federal liability shield is the gun industry.

Baltimore, New York City, San Francisco, Oakland and Boulder, Colorado, have sued fossil fuel companies over climate damages in recent years, seeking money for sea walls and conservation projects. Rhode Island and multiple California coastal counties have filed similar lawsuits.

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Cost-effective solution

“There’s a unified voice coming from corporate America, which is that a price on carbon is the most cost-effective solution,” Halstead told the committee.

Separately, a new business group supporting carbon pricing emerged last week. The CEO Climate Dialogue was organized with help from environmental groups like the Center for Climate and Energy Solutions, or C2ES; its member companies support taxing heat-trapping emissions in some manner. While the group wants the president and Congress to enact a national, “economy-wide” price “as soon as possible,” they do not specify how or at what rate emissions should be taxed.

“BP supports the Paris goals and has long advocated for a well-designed, economy-wide price on carbon to help deliver them,” Susan Dio, chair and president of BP America, said in a statement. “That’s why we are proud to be a part of the CEO Climate Dialogue, which will help inform the bipartisan discussions needed to enact effective carbon-pricing policy in the U.S.”

Chris Crane, president and CEO of Exelon, a nuclear-heavy utility that is also a member of the group, said the company has “long supported carbon pricing as the fastest, most economical way to both reduce emissions and encourage investment in new and existing clean power sources.”

In an interview, Janet Peace, senior vice president of policy and business strategy at C2ES, said this moment feels different than the run-up to the cap-and-trade bill the House passed in 2009 but that didn’t get a vote in the Senate.

Clout from large companies is a significant asset, she said.

“They have a profit motive,” adding that the science to tie climate change with specific events has sharpened over the past 10 years. “I think that attribution is much clearer,”Peace said in an interview. “And you can see that impacts are just getting bigger and bigger over time.”

In November, former Rep. Carlos Curbelo wrote a carbon tax bill, and Rep. Francis Rooney, a fellow Floridian, has emerged as a vocal supporter of taxing emissions. But they are outliers in their party.

There is a fear among climate advocacy groups who lobby Congress for carbon taxes that any bill could be wiped out if only Democrats support it, invoking conservative backlash to the Affordable Care Act.

“We need a long-term, durable solution,” Kelly said. “Durable means bipartisan.”

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