ExxonMobil seeks national carbon tax to counter global warming
ExxonMobil spokesman Alan Jeffers told AMI Newswire that since last December’s Paris accord on limiting the worldwide production of greenhouse gases such as carbon dioxide, the company has had more opportunities to discuss the tax plan with other energy companies and federal lawmakers. ExxonMobil has been supporting such a carbon tax since 2009, Jeffers said.
The proposal is a tough sell in Congress, however, where House members in June supported a resolution opposing a national carbon tax by a vote of 237-163. A similar resolution, authored by Sen. Roy Blunt (R-Mo.), has garnered 25 co-sponsors in the Senate and is now under consideration in the Senate Finance Committee.
In a prepared statement, Blunt said, “Imposing a national tax on the types of energy we rely on most would drive up costs for hardworking families and run our economy into the ground.”
Jeffers countered that the nation’s current energy regulatory framework consists of a complicated, inefficient patchwork of financial incentives such as tax credits and regulatory policies designed to advance clean energy over fossil fuels. Indeed, the North Carolina State University Clean Energy Technology Center has identified more than 2,500 such programs that aim to promote energy efficiency and clean energy.
Having a transparent, easy-to-understand national carbon tax in place of the current patchwork would be easier for companies to navigate and make the entire framework simpler to administrate, Jeffers said.
A carbon tax, which would be levied on fossil fuel purchases at the point of sale, would have the effect of making green energies such as solar and wind more affordable, creating an incentive to move toward green energies, according to the Canada-based David Suzuki Foundation, a conservation and environmental policy group.
Jeffers said that a revenue-neutral tax would mean that the money consumers pay in carbon taxes would be returned to them, perhaps through a tax refund based on income. Alternatively, a carbon tax could be passed while reducing another tax by the same amount, resulting in no additional burdens being placed on the taxpayer.
“If you’re going to bring in some sort of way to put a price on carbon ... then this should be the preferred approach,” Jeffers said.
He added that if the tax is not revenue-neutral, the result is a regressive form of taxation. “If you don’t do that, you have an inordinate impact on the lower end of the income bracket,” Jeffers said.
The ExxonMobil spokesman acknowledged that in the company’s discussions with others in the energy field, the idea of a national carbon tax is not “universally” agreed upon, but he said the company wants to present an intellectually honest position as an alternative to the complex maze of clean-energy regulatory policies now on the books.
In a commentary article published in the Dallas Morning News, Suzanne McCarron, ExxonMobil’s vice president of public and government affairs, stressed that government policymakers should find ways to lower harmful emissions while minimizing the cost to society as a whole.
“To do so, they should ensure a uniform and predictable cost of carbon, allow market prices to drive solutions, maximize transparency to stakeholders, reduce administrative complexity, promote global participation and easily adjust to future developments in climate science and policy consequences,” she stated.
The best way to do so, McCarron concluded, is through the revenue-neutral carbon tax.
Although many academics and environmentalists support the concept of a carbon tax, energy companies historically have not embraced the idea. European oil companies such as Royal Dutch Shell and BP support a carbon tax, however.
Among European nations, Sweden has carbon tax equivalent to $140 per metric ton of carbon pollution.
Conservative organizations remain strongly opposed to a carbon tax, even those designed to be revenue-neutral.
Justin Sykes, federal affairs manager for Americans for Tax Reform, told AMI Newswire that the problem with such a tax stems from the idea that, over time, emissions would be reduced. That means the tax base would be eroded over time as the reliance on fossil fuels declined, Sykes said.
He predicted that under such a tax system, politicians would look to replace declining carbon tax revenues with a new tax or increase the tax that was previously reduced as the carbon tax was phased in.
And even if lawmakers could be convinced to pass such an energy tax, there would be no guarantee that future politicians would honor the promise of revenue neutrality, Sykes said.
“It’s like making a deal with the devil, and we all know how that ends,” he said.
He emphasized that a carbon tax would inevitably increase the cost of consumer goods such as food, clothing and other household items, with the burden falling hardest on low-income families who, as a rule, spend a greater share of their income on such items.
“Make no mistake, the average American is not seeing the benefit of any of the massive regulations (President) Obama has put out, but they damn sure are seeing the downside of their jobs being ended, their monthly energy bills increasing and their household income being reduced,” Sykes said.