Energy

‘Conservative’ Carbon Tax Plan Hinges On GOP … Losing Seats In Congress?

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Michael Bastasch Energy Editor

Some former Republican lawmakers and officials have joined with Democrats to pass a national carbon tax, but their plan seems to hinge on fewer GOP-held seats in Congress.

Their strategy “is to build public support for the plan while working toward a legislative proposal that could be introduced after the midterm elections, when a new Congress might be more friendly to environmental legislation,” the group told The New York Times.

Some political observers expect Republicans to lose seats in the House. The RealClearPolitics polling average has Democrats up by 7 percentage points in a generic ballot, and 27 GOP-held seats are considered toss-ups.

However, a carbon tax would be a hard sell on Capitol Hill. The GOP could end up gaining Senate seats, and President Donald Trump signed an election pledge opposing a carbon tax. Congress also failed to pass cap-and-trade legislation in 2010, despite Democrats controlling both chambers.

“Politicians and Lobbyists always brew up new wine and market it in old bottles,” Dan Kish, a distinguished senior fellow at the Institute of Energy Research told The Daily Caller News Foundation.

“It’s a BTU tax, plain and simple. Back when they answered to voters, they opposed such things,” said Kish, referring to a failed Clinton administration plan to tax fuels based on heat content.

The group, called Americans for Carbon Dividends (ACD), is pushing a carbon tax plan first introduced by the Climate Leadership Council (CLC) last year. Both groups share similar backers and both are led by think tanker Ted Halstead.

Former Senate Majority Leader Trent Lott, a Republican, and former Senate Deputy Majority Whip John Breaux, a Democrat, co-chair the group. ACD is backed by corporate energy interests and environmentalists, including Exelon, the American Wind Energy Association and the Nature Conservancy.

ACD’s backers include founding members of CLC. Major oil and gas companies, including ExxonMobil and BP, are listed as CLC founding members, though CLC says it takes no corporate money.

“If Exxon Mobil and the Nature Conservancy can back this common-sense solution, shouldn’t Democrats and Republicans be able to do so as well?” Lott and Breaux wrote in the New York Times on Wednesday.

“Indeed, the Baker-Shultz carbon dividends plan is based on a few grand bargains meant to offer everyone with a stake in the climate debate an important win,” the former lawmakers argued.

Lott and Breaux said their plan would tax carbon dioxide at $40 per ton, which would steadily increase over time to encourage emissions reductions. The tax would raise the cost of gasoline about 38 cents a gallon, they said, and raise electricity rates.

The two lawmakers said Americans would be given a “dividend” from carbon tax revenues to offset higher energy costs. ACD estimates a family of four would get $2,000 in the tax’s first year. (RELATED: Obama Banned Fishing In 5,000 Square Miles Of Rich Ocean — Fishermen Want It Back)

“We must set it high enough to encourage a turn to cleaner energy sources and accelerate our transition to a low-carbon future. If America leads on carbon pricing, the rest of the world will follow,” Lott and Breaux argued.

Most Republicans and conservative leaders, however, still reject taxing CO2 emissions. Recently, Americans for Tax Reform and more than 20 conservative groups sent a letter in support of a House resolution condemning a carbon tax.

“We oppose any carbon tax. We oppose a carbon tax because it would lead to less income and fewer jobs for American families,” the groups wrote in support of legislation co-sponsored by House Majority Whip Steve Scalise.

“For example, a 2014 Heritage Foundation report found that a $37 per ton carbon tax would lead to a loss of more than $2.5 trillion in aggregate gross domestic product by 2030. That is more than $21,000 in income loss per family,” groups wrote.

“In addition, a carbon tax would cost over 500,000 jobs in manufacturing and more than 1 million jobs by 2030. According to a 2013 CBO report, a carbon tax is highly regressive,” reads the letter.

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