For some time now, ExxonMobil has said that a uniform price of carbon applied consistently across the economy is a sensible approach to emissions reduction. Specifically, we have stated that a revenue-neutral carbon tax is one policy option being considered by policymakers that offers the best prospects for progress at the lowest economic cost to society.
We’re not the only ones who think it’s a serious idea that deserves a hearing.
This week a new coalition was unveiled to make the case for a market-based climate solution that considers both economic growth and environmental progress.
ExxonMobil is proud to be among the Founding Members of the Climate Leadership Council. We join other leading companies such as General Motors, PepsiCo, BP, and Johnson & Johnson, not to mention key individuals such as Michael Bloomberg, Lawrence Summers, Steven Hawking, Steven Chu, Marty Feldstein, Greg Mankiw, Vinod Khosla, and Rob Walton. Two prominent environmental organizations – The Nature Conservancy and Conservation International – are on board as well.
Our support is anchored in a proposal put forth in February by former Secretaries of State George Shultz and James A. Baker, III in The New York Times. (Secretary Shultz joined with former Treasury Secretary Summers in The Washington Post this week to expound on these ideas.)
These statesmen argued for a carbon tax that calls for a gradually rising price on carbon. The revenues generated by the plan would be returned to American energy consumers, and not kept by government.
Importantly, they also called for the rollback of existing carbon regulations that would be made superfluous by implementation of such a tax, and border carbon adjustments to level the playing field and promote American competitiveness.
It’s an approach that is consistent with the principles ExxonMobil has espoused for nearly a decade.
We believe that effective policies will be those that promote global participation; let market prices drive the selection of solutions; ensure a uniform and predictable cost of greenhouse gas emissions across the economy; minimize complexity and administrative costs; maximize transparency; and provide flexibility for future adjustments to react to developments in climate science and the economic impacts of climate policies.
This week’s announcement is the beginning of a process, not a culmination. As one of the world’s leading energy companies, we look forward to working with this coalition to effect positive solutions to the risks posed by climate change.
Pete Trelenberg is ExxonMobil’s environmental policy and planning manager.