ExxonMobil will spend $500,000 a year over the next two years to Americans for Carbon Dividends, a political action group led by former senators John Breaux and Trent Lott, the Wall Street Journal reports.
The group advocates for a so-called carbon tax and dividend. The tax component would set a price on the carbon emissions. Bigger emitters would pay more. The dividend component would return the pot of money collected equally to American taxpayers, to avoid accusations of government money-grabbing.
ExxonMobil, whose market capitalization is around $363 billion, has been lobbying the energy sector for a carbon tax for years. A national carbon tax would apply across the entire United States, preventing individual states from enforcing their own regulations. It would also reward companies that are able to invest in low-carbon technologies, which Exxon has done.
Other big energy companies including Shell, BP and Total have made similar moves, especially in the wake of the 2015 Paris climate agreement. That may be because companies find it hard to plan their business when anyone can take them to court for their carbon emissions, with unpredictable consequences. ExxonMobil and others already plan operations using an internal price for carbon in anticipation of being hit with some of those costs in the future.
Government-enforced carbon pricing of some kind already covers about 13% of global greenhouse gas emissions, according to the World Bank. Part of the problem for policymakers is figuring out whether to set carbon emissions caps based on environmental criteria, and let emitters trade the right to emit until the market finds a price, or to instead set a tax and cross their fingers that they set it at the right level to prevent too much damage to the environment.
Many experts claim a carbon tax would need to be above $40 per ton of emitted carbon dioxide in order to capture the externalized costs of human carbon emissions. If the U.S. set the tax there, it would raise enough money to pay a typical family of four a dividend of around $2,000, proponents say. Richer taxpayers would have paid far more than that through their consumption of carbon-taxed goods or services, while such a system might be a net gain for the poorest families because they consume less.
But it’s going to be a tricky sell. George David Banks, a former Trump advisor, told the Journal, “Not only are you asking the base to support climate policy, but you’re asking them to support a tax. You’re asking them to support a double whammy.”