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With $1 Million, Exxon Mobil Corp Helps Fund Carbon Tax Campaign


The largest oil company in the U.S. is encouraging attacks on the very products it makes. Executives at ExxonMobil have announced that the company will contribute $1 million over the next two years to support a campaign for a tax on carbon-based fuels. So what kind of difference could this make on efforts to reduce the effects of climate change? Here's NPR's John Ydstie.

JOHN YDSTIE, BYLINE: ExxonMobil's contribution will support a group called Americans for Carbon Dividends, an offshoot of the Climate Leadership Council. Its aim is to raise the price of fossil fuels to reduce their use and cut the amount of climate-changing carbon released into the atmosphere. ExxonMobil has voiced support for such a plan for years. But Greg Bertelsen of the Climate Leadership Council says the firm's financial contribution is a significant step.

GREG BERTELSEN: It's the first time in history that a U.S. oil and gas supermajor has put significant financial resources behind a direct price on carbon.

YDSTIE: In other words, a direct tax on carbon, though Bertelsen's group prefers to call it a fee, not a tax; more on that later. Bertelsen says ExxonMobil's support will make lawmakers more receptive to a carbon tax. But you may wonder why does an oil and gas giant like ExxonMobil support a tax on its main products? Bertelsen says one big reason is that companies want regulatory certainty. They want to know what the rules of the game will be, and that's unclear in the current environment.

BERTELSEN: We're operating in what amounts to a game of regulatory pingpong in which you have one administration developing rules only to have the next roll them back.

YDSTIE: Another important reason ExxonMobil supports the plan is that while it would tax carbon, it would also remove most existing regulations on carbon emissions. Bertelsen says the carbon tax his group is proposing would be much more effective at reducing carbon pollution than the current regulations. The Americans for Carbon Dividend's plan is based on a proposal from two Republican elder statesman - James Baker III and George P. Shultz, both Cabinet members in Ronald Reagan's White House. One carrot for Republicans is that the revenue from the tax, or fee, would be fully rebated to consumers. Bertelsen says the idea has received a positive reception from both parties on Capitol Hill.

BERTELSEN: With Republicans in particular, there is an increasing number of members of Congress on the Republican side that are looking to seriously engage on this issue.

YDSTIE: Of course, many Republicans are skeptical about both taxes and climate change.

VIN WEBER: I think it is a step.

YDSTIE: That's Vin Weber, a former congressman from Minnesota. He's now a lobbyist and political consultant at Mercury Public Affairs. But Weber says with a president in the White House who campaigned on reviving the coal industry, passing a carbon tax will be very difficult.

WEBER: I don't think there's any way of sugarcoating it. For a Republican today to embrace any new tax is difficult. And since President Trump was elected, particularly a tax that focuses on fossil fuels is even more difficult.

YDSTIE: Greg Bertelsen acknowledges the challenges and says the carbon tax has always been viewed as a longer term effort.

MARTIN: NPR's John Ydstie. Transcript provided by NPR, Copyright NPR.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.
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