Stories from a Blue Planet: Bob Kihslinger-June 2021
Everyone Loves the Carbon Tax
In February of 2017 two venerable old Republicans were ushered into the new President’s office to have a sit down about climate change and the best way to stop it. George Shultz and James Baker were carrying with them the blueprint for what Fortune magazine called the “most ambitious climate plan in history” – the Baker-Shultz Carbon Tax Plan. One of the Republicans' few ventures into the climate change war.
The concept of a tax on carbon production 'promised' to be the most effective action that could be taken to stop the use of fossil fuels. How did it work? Simple. Charge oil companies for every btu of carbon energy they produce and use the money to support clean energy, climate mitigation and restoration or give it back to the consumers to help cover increased energy costs. The more businesses and consumers pay for a product, the less they will use it. The tax would increase over time thus accelerating the process.
However, there was concern that it might impede the economy and have a negative effect on lower income families? The work-a-round was the carbon dividend, long proposed by the CCL (Citizens Climate Lobby). Instead of a tax that went to government coffers there would be a dividend that would go directly to taxpayers thus offsetting the increased cost of fuels to the end user. A dividend also avoided the use of the dreaded “tax” word. No one seemed concerned that people might get used to the dividend and start rooting for the oil companies.
The Baker-Shultz Plan was loved by practically everyone. All the stakeholders were on board; businesses, politicians, and organizations. “This is the broadest coalition in U.S. history to come together in support of a concrete federal climate solution, and it continues to grow.” Fortune Magazine. Even climate justice advocates were impressed with a dividend approach that would pay each American back for any increased costs caused by the tax. Lower income families might even get more than they had to spend. Believe it or not, companies like BP and Exxon could also support it if it meant that they would not be targeted by new regulations and lawsuits. Bernie Sanders and Exxon, together at last.
All the ducks were in row and the carbon tax (or dividend) was about to have its day. Getting the President on board was the last step.