Energy

Corporate America Wants To Hit Consumers With A Massive Energy Tax

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Thomas Catenacci Energy & Environment Reporter
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  • Two major Washington, D.C. business groups representing corporations across sectors including the fossil fuel industry signaled support for energy policies that would raise consumer prices.
  • “No company pays a carbon tax, consumers will,” Daniel Turner, the executive director of Power the Future, told the Daily Caller News Foundation in an interview. “This idea that we will tax carbon and therefore have less of it, is just a complete fallacy.”
  • “The uncertainty of subsidies and the burden of regulations are much more challenging for businesses,” said Alex Flint, the executive director of the Alliance for Market Solutions, a free market group that advocates for a carbon tax. “So, if there is going to be a climate policy, business generally prefers a market signal.”

Two groups representing major corporations inched closer this week to backing a carbon tax policy critics argue would raise energy prices for consumers.

The American Petroleum Institute (API) privately drafted a proposal that would include a tax of $35-50 per ton of carbon dioxide emitted by fossil fuels, The Wall Street Journal reported Thursday evening. On Tuesday, meanwhile, the Business Roundtable (BR) — of which Amazon, Google, Apple, JPMorgan Chase and many other corporations are membersreleased an energy policy roadmap that endorsed carbon pricing, which forces emitters to choose between higher costs and transitioning to renewables, that they said incentivizes the “deployment of technologies to lower emissions.”

“At a time when Americans are paying for climate policy through hidden taxation and overlapping regulations that could increase the cost of energy, we are focused on analyzing solutions for the most transparent and impactful way to reduce emissions at the lowest cost to American families, and this proposal is part of that process,” API spokesperson Megan Bloomgren said in a statement shared with the Daily Caller News Foundation.

The group, which represents almost 600 oil and gas companies, confirmed the proposal but said it was part of its broader analysis of a “variety of approaches, policies and continuous innovation.” The proposal, which hasn’t been finalized or approved by its board, represents a departure from the group’s “Climate Action Framework” released last year that backed a carbon pricing system.

A carbon tax of $35 per ton would raise gasoline costs by about 28 cents a gallon while a $50-per-ton tax would increase pump prices by 41 cents a gallon, according to Energy Information Administration data. (RELATED: Biden White House Report Says Energy Taxes Are ‘Needed’ For Green Transition)

“No company pays a carbon tax, consumers will,” Daniel Turner, the executive director of Power the Future, told the DCNF in an interview. “This idea that we will tax carbon and therefore have less of it, is just a complete fallacy.”

“Just like every other industry, big corporations love big government, and the oil and gas industry is not immune from that,” he added. “It is unsurprising that some of the biggest producers and the biggest corporations want some sort of new regulation that they can afford, that their competitors cannot afford.”

An oil drilling rig setup in the Permian Basin oil field on March 13 in Midland, Texas. (Joe Raedle/Getty Images)

An oil drilling rig setup in the Permian Basin oil field on March 13 in Midland, Texas. (Joe Raedle/Getty Images)

Turner added that large oil corporations may support a carbon tax policy in an attempt to “buy goodwill” from environmental groups and activists. (RELATED: Biden Plans To Release More Oil From Emergency Stockpile. Will It Work?)

Still, other groups have echoed the API’s view that a carbon tax wouldn’t raise consumer prices if coupled with wide-scale deregulation of the fossil fuel industry.

“The uncertainty of subsidies and the burden of regulations are much more challenging for businesses,” Alex Flint, the executive director of the Alliance for Market Solutions (AMS), a free market group that advocates for a carbon tax, told the DCNF in an interview. “So, if there is going to be a climate policy, business generally prefers a market signal.”

Flint added that imposing a cost on carbon was the best free market solution to reducing emissions long term. Economists prefer the carbon tax because it is significantly less costly than subsidizing the green energy industry or regulating the oil and gas industry, he said.

A revenue-neutral carbon tax would increase U.S. gross domestic product up to $5,090 per household compared to the current regulatory approach, according to an Ernst and Young study prepared for AMS in 2018.

“The way I say it quickly is a carbon tax in lieu of regulations and subsidies,” Flint told the DCNF.

“Politicians are the ones who struggle with a carbon tax because part of a carbon tax that makes it work well is that it is transparent,” he added.

Less than half of Americans would support a carbon tax while just 29% would oppose it, according to a 2019 poll from the Associated Press. But voters in the state of Washington soundly rejected two separate carbon tax proposals between 2016-2018.

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