Former Treasury Secretaries to present proposal to the White House designed to harness free market principles to tackle climate risks
A group of veteran Republicans will today present an ambitious package of climate policies to senior White House officials in a fresh bid to deliver a “conservative climate solution”.
James Baker, former Secretary of State under President Reagan, is scheduled to meet with Vice President Mike Pence, senior advisor Jared Kushner, Gary D. Cohn, director of the National Economic Council, and the President’s daughter Ivanka Trump.
Baker is expected to present plans for a new carbon tax on behalf of the Climate Leadership Council, a group backed by former Treasury Secretaries Hank Paulson and George Schulz which has previously argued security and economic risks mean conservatives should look to develop effective climate policies.
The group’s latest report, entitled Conservative Case for Carbon Dividends, argues President Obama’s Clean Power Plan should be scrapped in line with President Trump’s proposals, but should be replaced by an economy-wide carbon tax initially set at $40 a tonne.
The proceeds from the tax would then be returned to households in the form of a carbon dividend, which could total as much as $2,000 a year for a family of four.
The plan, which would also include carbon border tariffs to stop unfair competition from overseas businesses not subject to a similar carbon levy, is projected to raise between $200bn and $300bn a year.
The tax would likely lead to higher prices as businesses seek to pass on increased costs, but the authors of the report maintain any inflation would be offset by the dividend paid to voters.
Meanwhile, businesses would have a compelling financial incentive to improve their efficiency and invest in cutting emissions.
“Carbon dividends would increase the disposable income of the majority of Americans while disproportionately helping those struggling to make ends meet,” the report states. “Yet these dividends are not giveaways; they would be earned based on the good behaviour of minimizing our carbon footprints.”
Speaking to the New York Times ahead of the White House meeting, Baker nodded to Republican scepticism about the causes of climate change, but insisted policy measures were required to guard against the risk of serious impacts.
“It’s really important that we Republicans have a seat at the table when people start talking about climate change,” Baker said. “I don’t accept the idea that it’s all man made but I do accept that the risks are sufficiently great that we need to have an insurance policy.”
The proposal is likely to face fierce opposition from many Republicans, including some of the President’s senior advisors, who have dismissed climate change as a “hoax” and characterised efforts to tax emissions as a tax on jobs and energy bills.
However, Baker and his colleagues – who include former Walmart chair Rob Walton and former chairs of the President’s council of economic advisors under President Reagan and President George W Bush, Martin Feldstein and Gregory Mankiw – could find some unlikely allies within the administration.
Ivanka Trump is said to be keen to promote action on climate change within her father’s administration, and Secretary of State Rex Tillerson backed plans for a carbon tax during his time at ExxonMobil.
Speaking during his confirmation hearing last month, Tillerson reiterated that he was supportive of ideas for a carbon tax that were revenue neutral and were offset by reduced employee payroll taxes.