Big Oil Steps Up Support for Carbon Tax

By Timothy Puko Features Dow Jones Newswires

Some of the world's largest oil companies and the country's biggest auto maker are joining a group pushing the U.S. government to tax carbon in an effort to slow climate change.

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General Motors Co., Exxon Mobil Corp. and BP PLC are among almost a dozen companies joining the Climate Leadership Council, a new organization that advocates replacing many environmental regulations with a simplified tax on businesses that release carbon into the atmosphere. The plan proposes directly paying out this money to all citizens to defray the likely costs from rising energy prices.

A group of influential Republicans, including former secretaries of State George Shultz and James Baker, have spearheaded the group's efforts, which are at odds with many in their own party.

Since winning control of the White House and Congress last year, Republican lawmakers have worked to roll back Democratic policies aimed at reducing greenhouse gas emissions, culminating with President Donald Trump's decision to withdraw the U.S. from the Paris climate accord.

Several business leaders criticized that decision, and some of the companies joining the group, which officially launched in February, have advocated more aggressive policies to address rising temperatures and air pollution. Exxon, GM and the other corporations are joining alongside astrophysicist Stephen Hawking, hedge-fund magnate Ray Dalio, Harvard economist and former Obama economic adviser Larry Summers and others.

Exxon Chief Executive Darren Woods used his first blog post in that role this February to say a "revenue-neutral carbon tax" would be a "sensible approach" to cutting carbon emissions.

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It can promote energy efficiency and incentivize low-carbon energy sources without "further burdening the economy," he wrote.

"We have been encouraged by the proposal put forth by the Climate Leadership Council as it aligns closely with our longstanding principles, " Mr. Woods said in a statement Monday.

"We acknowledged long ago that climate change is real and that lowering emissions is both a social imperative and an economic opportunity," GM said in a statement. "Addressing climate change in an effective and sustainable manner requires a holistic approach involving all sectors of the economy."

A tax is also simple enough that, if passed, it would mean the country could eliminate a collection of regulations that have guided climate policy in the last several years, including the Obama administration's power plant rules, which the Trump administration has moved to reverse.

"My guess is that the big appeal is getting rid of all the regulatory morass," said Benjamin Salisbury, policy analyst at FBR & Co. But "with Republican domination in Washington, you are talking about the very early stages of a massive uphill climb."

Write to Timothy Puko at tim.puko@wsj.com

(END) Dow Jones Newswires

June 20, 2017 00:14 ET (04:14 GMT)