Integrated Companies
The idea dovetails with an approach advocated by some large integrated oil companies, including Exxon Mobil, which has promoted a revenue-neutral carbon tax instead of a patchwork of environmental regulations. Secretary of State Rex Tillerson, Exxon’s former chief executive, previously acknowledged the climate is changing and described a carbon tax as the most efficient means of embedding its cost in economic decisions stretching from oil companies to consumers.
BP Plc has said a well-constructed carbon tax or cap-and-trade system would encourage energy producers and consumers to pare emissions, while Royal Dutch Shell Plc Chairman Charles Holliday has called a carbon tax the most effective and practical way of driving that change.
It is unclear how the new plan will be received by Republicans in the White House and on Capitol Hill.
The Republican-led House of Representatives last June approved a non-binding resolution condemning the idea of a carbon tax as "detrimental to American families and businesses." The measure, which passed 237-163, was designed to lock in lawmakers’ positions, making it harder for those who lodged a vote opposing a tax to support one later on.
Trump himself has come out against the idea, rejecting a carbon tax in responses to a survey by the American Energy Alliance last March. Many of the conservative advocates guiding Trump’s energy and environment policy also eschew the idea.
The approach also runs counter to Trump’s campaign promise to help bring back coal mining jobs. Because it generates more carbon dioxide emissions than natural gas and oil, coal would be the fossil fuel hardest hit by a tax on carbon.
But a carbon tax has gained traction in some circles. Republican Bob Inglis, a former representative from South Carolina, has pitched the tax as a free-market solution to climate change. Tesla Motors Inc. founder Elon Musk also has pressed the Trump administration on the issue. It could benefit his electric vehicle business by driving more consumers away from gasoline-fueled automobiles.
The issue divides the oil industry; though Exxon Mobil is just one of several large integrated companies that favor a carbon tax, the idea is opposed by many independent producers that do not own pipeline and refining operations.
This article was provided by Bloomberg News.