By John Siegel
Oil company leaders and other business executives are meeting virtually this week with more than a dozen Democratic and Republican senators to advocate for a carbon tax. The companies are aiming to shift the debate as Congress considers President Joe Biden‘s infrastructure proposal, which excludes a carbon tax.
Specifically, the companies will lobby for a carbon tax proposal developed by former Republican Secretaries of State James Baker III and the late George Shultz as part of the Climate Leadership Council that would return the revenue to households through equal quarterly payments, known as “dividends,” to offset higher energy prices.
The Climate Leadership Council organized the meetings, which will be attended by top officials from U.S. oil and gas majors ExxonMobil and ConocoPhillips, along with representatives from Ford, General Motors, IBM, and more.
“A well-designed price on carbon is the most effective way to reduce greenhouse gas emissions across the economy,” said Matt Fox, executive vice president and chief operating officer of ConocoPhillips.
But their decision to lobby the Senate demonstrates a new urgency as Biden and Democratic leaders in Congress have bypassed a carbon tax in favor of other climate policies as part of the administration’s infrastructure push.
Carbon pricing has emerged as the most palatable climate policy option for businesses, including oil companies and their lobby groups, who argue it would encourage the market to move to cleaner energy without mandating it. But the Biden administration and Democrats have mostly adopted the view that the federal government must play a more direct role in limiting the use of fossil fuels rather than relying on markets.
Carbon tax advocates are holding out hope, however, that the policy can gain traction after the infrastructure debate as a way for the United States to stay competitive with global competitors that have adopted pricing mechanisms. Biden climate envoy John Kerrysuggested last week that carbon pricing will stay on the administration’s agenda, even if it’s not the immediate path pursued.