Some environmentalists such as former Vice President Al Gore want to tax greenhouse-gas emissions, saying it’s a way to curb the use of fossil fuels such as coal and oil, and boost energy efficiency and cleaner energy sources, such as wind power. The Environmental Defense Fund said it prefers a cap on carbon emissions to a tax.
The carbon tax also has had support among economists who have worked for Republican administrations, including Kevin Hassett, who is also at AEI, and Gregory Mankiw, an economist at Harvard University.
Exxon, which opposed legislation in 2009 that would have capped carbon emissions and allowed an auction to trade them, said at the time that a carbon tax would be easier to implement and more predictable.
“Combined with further advances in energy efficiency and new technologies spurred by market innovation, a well-designed carbon tax could play a significant role in addressing the challenge of rising emissions,” Kimberly Brasington, a spokeswoman for the company, said in an e-mail. “A carbon tax should be made revenue neutral via tax offsets in other areas,” she added.
Exxon’s political action committee gave nearly $1.2 million to political candidates in the past two years, 93 percent of it to Republicans, according to the Center for Responsive Politics.
Exxon is the biggest U.S. natural-gas producer. A carbon tax could boost demand for natural gas in U.S. power plants, as gas emits half the carbon dioxide as coal when burned to make electricity. Natural gas futures fell 1.5 percent to $3.703 per million British thermal units today. Gas prices fell to a 10- year low in April after mild winter weather crimped demand for heating fuels while production rose to a record.
“The source hit hardest is coal,” David Kreutzer, a research fellow in energy economics at the Heritage Foundation in Washington who opposes the tax, said in an interview. “The biggest substitution for coal is going to be natural gas.”
Taxing greenhouse-gas emissions would help finance an overhaul of the convoluted corporate tax code and is a better way to address global warming than regulations from the EPA, according to Aparna Mathur, an economist at the American Enterprise Institute who hosted yesterday’s forum.
Exxon, the world’s largest energy company by market value, gave AEI $295,000 last year. Exxon played no part in Mathur’s research or the meeting, she said.
Some of Mathur’s fellow scholars at the Washington think tank say imposing a new tax is a mistake, and conservatives are getting duped into thinking it would be imposed in place of -- not in addition to -- other taxes and regulations.
“Conservatives are utterly naive to believe that they will get trade-offs in response to a carbon tax,” Kenneth Green, a resident scholar at AEI, said in an interview. “We’ve had some robust discussions over the lunch table about our differences.”