Skip to main content

GOP Senior Statesmen Call for Carbon Tax

A group of Republican senior statesmen is calling for a carbon tax to fight climate change. Led by former Secretary of State James A. Baker III, former Secretary of State George P. Shultz and former Secretary of Treasury Henry M. Paulson Jr., the group believes a carbon tax, which depends on increasing fossil fuel prices to reduce consumption, is a "conservative climate solution" based on free-market principles. Baker and his colleagues met with White House officials on Wednesday to discuss their proposals, which would eliminate nearly all of the Obama Administration's climate policies with a national carbon tax. This rising tax would start at $40 per ton and be returned to every American in the form of a quarterly check from the Social Security Administration. To learn more about their proposal, read on!

The carbon tax proposal is part of the Climate Leadership Council's new climate strategy, "The Conservative Case for Carbon Dividends," released on Wednesday. This plan rests on four pillars: a gradually increasing carbon tax; returning the tax proceeds to Americans as dividends; establishing border carbon adjustments that protect American competitiveness; and digressing government regulations once such a system is established. The proposal would eliminate the Obama Administration's Clean Power Plan, which President Donald Trump has pledged to repeal.

In a Wall Street Journal op-ed published the day before releasing their plan, Baker and Schultz wrote, "this carbon dividends program would help steer the U.S. toward a path of more durable economic growth by encouraging technological innovation and large-scale substitution of existing energy sources." They emphasized how the plan would also give companies the predictability they now lack, removing one of the most serious obstacles to capital investment. Baker, Schultz, and Paulson co-authored the report with five other conservative leaders, including Martin Feldstein and Gregory Mankiw, former chairmen of the Council of Economic Advisers.

The idea of a carbon tax is generally supported by many Democrats, including Al Gore. Several major oil companies, such as Exxon Mobil, have also come out in favor of the concept. Despite the strong Republican credentials amidst Baker and his group, the proposal is said to face attacks on all ends, including supporters of a carbon tax. Proponents of the Clean Power Plan are expected to resist its repeal, while Democrats will likely oppose parts of the Baker proposal such as limitations on the right to sue and the idea of a dividend. On the other side, many congressional Republicans are strongly against any form of tax increase, while President Trump has repeatedly stated he is more interested in promoting the use of fossil fuels rather than diminishing carbon emissions in the United States.

Subscribe To Viewpoints


Thomas R. Burton, III

Member / Chair, Energy & Sustainability Practice

Tom Burton has helped to shape the clean energy industry by drawing on his passion for innovation. As a Mintz attorney, Tom counsels investors, entrepreneurs, and Fortune 100 companies. He also guides start-up organizations and accelerators to foster the next generation of energy leaders.