A group of prominent Republicans has proposed a tax on carbon emissions to combat climate change, calling it “a conservative climate solution” based on free-market principles.
The proposed tax, released in a report titled “The Conservative Case for Carbon Dividends,” would replace the Obama administration’s Clean Power Plan, which President Donald Trump has pledged to repeal.
It would initially tax carbon dioxide at $40 per ton, raising an estimated $200 billion to $300 billion a year, with the rate to be reviewed after five years.
“Any climate solution should be based on sound economic analysis and embody the principles of free markets and limited government,” said the authors of the paper, who include former Secretaries of State James A. Baker III and George P. Shultz and former Secretary of the Treasury Henry Paulson.
“Such a plan could strengthen our economy, benefit working-class Americans, reduce regulations, protect our natural heritage and consolidate a new era of Republican leadership,” they added.
All the proceeds from the tax would be returned to households by way of quarterly tax-free dividend checks, direct deposits, or contributions to individual retirement accounts. The Social Security Administration would administer the program, with a valid social security number being required for eligibility.
“If you look at the priorities of President Trump, our plan ticks every one of his boxes,” Ted Halstead, founder and president of the Climate Leadership Council, said. “It is pro-growth. It is pro-jobs. It is pro-competitiveness. It would balance trade. And last but hardly least, it would be good for working-class Americans.”
But The New York Times predicted that the plan will be attacked from many quarters, including supporters of the Clean Power Plan, Democrats who oppose limitations on the right to sue like those envisioned in the proposal, and environmentalists who would prefer to see the money raised by the tax used to promote renewable energy.
The Natural Resources Defense Council released a statement saying that although a price on carbon “could be an important part” of climate mitigation, “it can’t do the job alone.”