This page, featuring “opinion leaders” — environmental, business and religious — is one of half-a-dozen compiling expressions of support for carbon taxes (or more targeted taxes, e.g., on gasoline) by notable individuals and organizations. Use Navigation Bar at top of page to access other pages.
Environmental Organizations and Leaders
Lester Brown, Earth Policy Institute: “We need a way to reduce gasoline use, one that is practical and politically acceptable. We need a higher gas tax, but the only way to get a gas tax rise large enough to wean us from imported oil is to offset the rise with a reduction in the tax on income. The gas tax boost should be substantial — a rise that will send a strong, clear signal to consumers — and it should be gradually phased in. A gasoline tax hike of 30¢ a gallon per year for the next 10 years would send the right signal. This eventual increase of $3 per gallon would be offset at every step of the way with a reduction in income taxes.” (Let’s Raise Gas Taxes And Lower Income Taxes, May 11, 2006)
Carl Pope, Sierra Club executive director: “It [a carbon tax] will be more effective [than a cap-and-trade system] if people know that in year ‘X’ they will pay this much. Companies are highly motivated by costs.” (quoted in Tax on Carbon Emissions Gains Support; Industry and Experts Promote It as Alternative to Help Curb Greenhouse Gases, Washington Post, April 1, 2007) The article goes on to say: “Moreover, he [Pope] worries that rationing carbon allowances based on historical emissions would reward companies that spew out the most greenhouse gases now and did the least to limit them in the past.”
Ralph Nader: In a Dec. 3, 2008 Wall Street Journal op-ed co-authored with Canadian Toby Heaps, We Need a Global Carbon Tax (subtitled, “The cap-and-trade approach won’t stop global warming”), the noted environmental and citizen activist made a compelling case for pricing carbon emissions via a tax rather than a trading scheme:
A global carbon tax levied on a relatively small number of large sources can be monitored by satellite and checked against the annual surveillance of fiscal and economic polices already carried out by IMF staff. Thus, the accounting involved is much more precise and much less subject to the vagaries of corruption and conflict over which industries and companies get their free handouts of carbon credits — carbon pork — than in a cap-and-trade system.
Nader and Heaps provided “three reasons why countries, such as China and India, that have traditionally resisted any notion of a common responsibility to make current polluters pay would do well to enlist in this effort (emphases added).”
First, while there is no limit on the downside for missing a hard cap, with a carbon tax you just pay as you go. If a fast-growing country like China accepted an emissions cap and then overshot it, they would have to purchase carbon credits on the international market. If they missed their target by a lot, carbon credits would be scarce, and purchasing them would suck dry their foreign exchange reserves in one slurp. That’s why a carbon tax is much easier to swallow and, anyway, through the power of the price signal, it would produce the same desired result as a hard cap.
Second, administering billions of dollars of carbon credits in a cap-and-trade system in an already chaotic regulatory environment would invite a civil war between interest groups seeking billions in carbon credit handouts and the regulator holding the kitty. By contrast, a uniform tax on CO2 emissions levied at a small number of large sites would be relatively clear-cut. During the Montreal Protocol talks in the 1980s, India smartly balked at a suggestion to phase out CFCs in certain products and not in others because of the chaos that would result from the ambiguity.
Third, key people in China read our newspapers. They see the ominous clouds of protectionism under the guise of environmentalism in bills like Lieberman-Warner and they don’t want to be harmed; neither should we, given the trillions of dollars of Treasury bills they hold. Showing compliance with a harmonized carbon tax at a small number of large bottleneck points would be child’s play compared to the chaos of cap-and-trade.
Nader voiced similar arguments in an interview published on the New York Times Green, Inc. blog on May 11, 2009:
Q: In December, you co-authored an editorial in the Wall Street Journal that criticized the idea of using a cap-and-trade system to regulate carbon emissions, advocating for a carbon tax instead. So what’s your reaction to the Waxman-Markey climate bill now on the table, which calls for cap-and-trade?
A: I’m really astonished, because I would have thought they would have gone for a carbon tax. I mean, [cap-and-trade isn't] going to work. It’s too complex. It’s too easily manipulated politically. Right now, they’re having a battle over whether they can even auction the credits off for money. The industry doesn’t want auctions for money. So, they’re already having a battle right from the takeoff. I have to call Markey and see why did he ever buy into that.
Most people who know anything about this subject and its administrative feasibility say that a carbon tax is far better.
Greenpeace: Supports an emissions cap of 80 percent (with auctioned credits) AND a carbon tax. (Greenpeace Staff Blog)
Rex Tillerson, CEO, ExxonMobil was reported by Reuters in Dec. 2008 to have spoken in support of a U.S. carbon tax at a business meeting in Chicago: “He said he favors a carbon tax to curb greenhouse gas emissions — rather than a cap and trade system using pollution credits — because the tax is more effective, less costly and easier to administer,” Reuters reported. (Market-based Energy Policy Would Aid U.S. — Exxon CEO) Since then, Tillerson has spoken in favor of carbon taxing and against cap-and-trade on many occasions.
Earlier, in 2007, “The ExxonMobil [Tillerson] chief criticised the EU’s carbon trading system, calling it an administratively complex system that lacked transparency and failed to deliver a uniform and predictable cost of carbon. ‘It’s all about moving the money around,’ he said. Mr Tillerson said he would prefer a carbon tax that would enable the cost of carbon to spread through the economy in a uniform way, letting governments use the revenues to mitigate its effect by reducing employment or income taxes.” Energy crisis cannot be solved by renewables, oil chiefs say, (London) Times online, June 25, 2007.
In 2012, Pulitzer Prize-winning journalist Steve Coll, author of a widely praised new book, “Private Empire,” on ExxonMobil, had this exchange with New York Times reporter Tom Williams: “Q. The company came out in support of a carbon tax, partly because it didn’t want cap-and-trade restrictions. How much is the carbon tax support — and the company’s environmental gestures more generally — just a public relations move? A. You’ll hear different opinions about that. Their record in the main is that they mean what they say. They took what I would judge to be a radical stance of campaigning against mainstream climate science during the late 1990s and the first Bush term. Then they shifted — after doing a good deal of damage, in my judgment. Their support for a carbon tax is now on record, and I’d be surprised if they reversed it.” A Close Look at ExxonMobil and Corporate Responsibility, May 3, 2012.
Dan Reicher, director of climate change and energy initiatives, Google.org, in Newsweek, The Case for Brainy Power (Nov. 24, 2008):
Q. If you are asked to be secretary of energy in the Obama administration, what would be the first thing you’d do?
A. I think one of the things we clearly need to do is put a price on carbon emissions to control greenhouse gases. That would send the right price signals to the economy and drive the trillions of dollars of investment that will have to be made both to avert the climate crisis and to rebuild our economy.
Jamie Dimon, Chairman and CEO JPMorgan Chase & Co.: “[I]t would be a shame to let gas go below $3.50 or $3.25 a gallon – we should add the taxes to BTU, charge energy. We’ll all learn to be a lot more efficient … people aren’t gonna put $100 billion into alternative energy if oil can go back to $50. And it’s a commodity, there will be a surplus one day and it will go down… I think we’re going to have to give it back to lower paid people. You know, so they’re losing $2000 a year now on oil and on food, so it has to come out of payroll taxes or low income, and we shouldn’t be selfish about it.” Interview July 2008
Donald E. Felsinger, Chairman and CEO, Sempra Energy, the subject of a recent “Saturday Interview” in the New York Times, was asked if he believes “that some form of carbon emissions restrictions, perhaps in the form of a carbon tax, is inevitable?” He responded:
I believe they are inevitable. We are having debates within my own company about what is a better outcome, whether it be cap-and-trade or a tax. I think the most effective way to deal with carbon pollution is to have a carbon tax. Turning Energy Uncertainty Into Opportunity, May 3, 2008.
Jim Gordon, CEO, Energy Management, Inc. (developer of the Cape Wind windmill project in Nantucket Sound): “The scale, urgency and challenge of climate change and energy security require that all citizens and corporations either pay the health, military and environmental degradation costs of carbon emissions or begin to transition to a more sustainable future. Implementing a revenue neutral carbon tax is the most effective way of internalizing the real costs of burning fossil fuels and providing the pricing signal that will modify consumer behavior. A carbon tax rather than a cap and trade program will provide the best chance of ensuring a more rapid path to this sustainable future.” (Personal communication to CTC, March 29, 2008)
Bruce Williamson, CEO, Dynegy, quoted in a recent Houston Chronicle story, expressed strong support for a carbon tax, while recognizing that it would make some of his fellow energy company CEO’s uncomfortable:
Fellow power company CEOs “would probably cringe to hear me say it,” Williamson said, but he believes a federal tax on carbon dioxide emissions would be more fair than a cap-and-trade system.
Mr. Williamson description of the benefits of a carbon tax over cap-and-trade is concise and accurate:
A tax is “the easiest method, the fastest and the most equitable,” Williamson said, because cap and trade systems tend to be more costly for companies to manage and create regional imbalances that would likely lead to federal lawsuits. “I’ve made the joke before that Wall Street would likely lose its interest in the environment if there wasn’t money to be made from a trading opportunity.” Dynegy Listens to Dissent, March 29, 2007.
Robert Olsen, Chairman, ExxonMobil International Ltd.: In his keynote speech to the Offshore Europe Conference in September, Mr. Olsen described Exxon’s position as “In general, we believe that maximising the use of markets to select and deploy technologies will best serve society’s interests in the long term.” Mr. Olsen’s description of some of the “essential characteristics” of such a market sounded tailored to a carbon tax:
Achieving a uniform and predictable cost for carbon across the economy would enable market mechanisms to work effectively to this end. Uniformity ensures economic efficiency, whilst predictability facilitates good decisions affecting energy consumption today, and investment in the technologies needed to reduce emissions over time.
Administrative simplicity and transparency for both companies and consumers are also essential characteristics of an effective policy framework. This helps businesses plan their investments and helps consumers understand the impact of policy on the goods and services they purchase.
After describing the price volatility that has characterized the European Union’s cap-and-trade system, Olsen urged that alternatives be analyzed and debated:
For example, an upstream cap-and-trade system – that is, a system placing a limit on carbon at the point where the fuel enters the commercial world rather than at the point of emission – offers potential advantages in terms of efficiency and simplicity. It reduces the number of regulated entities and provides a uniform cost of carbon to the entire economy. Similarly, a carbon tax could enable the cost of carbon to be spread across the economy as a whole in a uniform and predictable way. (Technology’s Role in the Future of Energy, Sept. 4, 2007)
Lewis Hay III, Chief Executive of FPL Group: According to a news article announcing that FPL would be promoting a ”carbon fee” that would be tacked on to fossil fuel charges based on the amount of carbon dioxide released from burning them, Hay “believes such a fee, set at a reasonable level and gradually increased, would create market pressures encouraging emission cutbacks not just on utilities but across the economy — but it should be done in a way that is friendlier to industries, businesses and consumers than the ‘cap and trade’ scheme dominating discussions in Congress.” Hay stated that “cap and trade” would result in a “giant food fight over these [carbon] allowances,” invite fraud, such as that which has marred similar programs in Europe, and result in volatile carbon pricing. According to Hay, ”We think the big winners in a trading scheme will all be the investment bankers.” FPL Suggests Carbon Fee to Control Gas Emissions, MiamiHerald.com, March 31, 2007.
Paul Anderson, former Chairman and CEO, Duke Energy
I believe U.S. public policy on global climate change should encourage a transition to a ower-carbon-intensive economy through a broad-based, mandatory approach. And, I believe the best approach is a carbon tax … A well-crafted carbon tax would do three things: First, it would provide incentives for conservation for everyone. Second, it would promote higher utilization of today’s power plants that are low emitters of carbon and encourage low-carbon fuel choices for the future. And third, it would encourage the development of new technologies. The greatest attraction of a carbon tax is that it allows us to share the cost of reducing greenhouse gas emissions across all sectors of the economy – minimizing the disruption in any one area. (Address, Charlotte Business Journal, 10th Annual Power Breakfast, April 7, 2005)
Mr. Anderson was Chairman and CEO of Duke Energy at the time of his address. In an earlier interview, Mr. Anderson called a carbon tax a “no-regrets approach”:
Probably if you look at the position of industry in the past, it’s been very opposed to something like a carbon tax, but then I think in the past the reality that something was going to have to be done was not quite so evident. The nice thing about a carbon tax is if you accept that there still is a debate as to whether or not man-made CO2 is contributing dramatically to global warming, even if you don’t believe that, and there’s still some people out there that don’t, a carbon tax is a no-regrets approach to it; you haven’t shut down an industry, you haven’t penalised a fuel unduly, you’ve simply sent economic signals out there that, at the end of the day, the worst thing that happens, you have a little conservation. (Interview, Sunday Sunrise (Austrailia), March 13, 2005)
T. Boone Pickens, oil and gas industry leader and philanthropist, “proposes that we increase gasoline taxes enough to raise the price of gasoline to $5 a gallon and use the revenues to cut the payroll taxes paid by employees and employers.” (Quote from an op-ed by Robert Walker, Global Warming Response – Markets or Taxes? in the San Francisco Chronicle, March 23, 2007)
Glenn Cannon, former General Manager, Waverly Light and Power, and Past Chair of the American Public Power Association: “To me, a carbon tax make the most sense in any strategy where we want to achieve meaningful reductions in all sectors of the economy.” (Email message to Carbon Tax Center, March 12, 2007)
Former American Petroleum Institute Chief Economist Michael Canes combined support for taxing carbon and criticism of carbon cap-and trade in a July 24, 2007 interview with E&E TV. From the transcript:
What’s wrong with cap and trade is that it’s very wasteful. It’s going to result in a lot of constraints on the economy. It’s going to result in volatility of energy prices that is unnecessary. It is going to create a source of wealth for people to lobby for and for the political sector to distribute. And that’s going to result in socially wasteful activity to try to redistribute wealth among parties, including not just within the United States but from abroad as well. And lastly, it’s going to have to have a monitoring system. Cap and trade requires policing, and not just in the United States, but internationally, because it will become an international system very quickly. So, in my opinion, it is going to be wasteful. Many, many billions of dollars will go into the construct of this system and it’s not necessary. There are better alternatives on the table.
Now, why is [cap and trade] politically popular even though it appears to be a more efficient system than other systems? The reason is because it does create a source of wealth. And that means that the business sector sees possibilities of obtaining part of that wealth. And so they view this favorably. The political sector sees ways to distribute that wealth and so it has attractiveness to the political sector. It will result in organized exchanges to exchange these allowances to emit. And those who would set up such exchanges see this as favorable. And ultimately the environmental community finds it favorable because a cap is a cap, and you have a quantitative limit on how much can be emitted. This is a mistake on their part. And the reason for that is the annual rate is not what counts. It is the total stock of greenhouse gases that are in the atmosphere that matters. And whether the rate is a little higher or a little lower really doesn’t matter in any given year. But the environmental community likes the certainty and that’s why they favor it.
I can accept that stronger measures might be necessary and if so, then in my view a carbon tax would be the way to go. A tax on carbon is much neater. The revenues from the carbon tax are kept inside the United States. You set it at a level that tries to approximate the costs that carbon is imposing on the world, you might say. It efficiently gets people to economize on carbon. If revenues can be redistributed, say through other kinds of tax reduction, you can actually improve the efficiency of the tax system. The people at Resources for the Future estimate somewhere between $15 and $25 billion annually in gains from a $7 to $15 carbon tax per ton. So you can improve the economy, it’s a more efficient system. You don’t have this creation of wealth that people begin to try to lobby for and the people try to distribute. You don’t have to deal with international offsets which requires monitoring worldwide of who is producing what in the way of offsets. Are they real? Should they count or should they not? A very expensive way to go. You can avoid all that with a carbon tax and that is the way I think we should go if we’re going to take more serious action than voluntary behavior.
I have not seen [a specific legislative proposal] that quite fits these parameters. I know that Congressman Dingell has proposed a tax, at least conceptually, on carbon. I think his purpose is to see whether or not such a tax could fly. But it’s how you pose the alternatives. If you say let’s have a tax or let’s not have a tax, many people in the public will oppose the tax, no question. If you say let’s have a tax that has redistribution, via reduction of other taxes at least equal so that its revenue neutral or even possibly a small tax decrease, a kind of a sweetener, to get people to kind of agree to this, then I think this could fly politically.
Rabbi Arthur Waskow, The Shalom Center, Philadelphia: Rabbi Waskow, a long-time leader in progressive Judaism, has been speaking and organizing about U.S. “oiloholism” for some time. He has skillfully abridged material from CTC’s Web site on the Shalom Center’s site under the title Carbon Tax: Crucial Step To Stop Global Scorching. For more about the Shalom Center, see our Links page.
Friends Committee on National Legislation (Quakers): “What do the CEO of the world’s largest oil company, a former Reagan administration economist, the chair of the House Democratic Caucus, and the ranking Republican member of the House Science and Technology Subcommittee on Energy and Environment all agree on? That taxing the carbon content of fossil fuels would be the most direct, transparent, and effective way to reduce the human causes of global warming.”
“The key to winning public support for a carbon tax is that the money goes back to taxpayers. By itself, the carbon tax is regressive. People who pay a larger percentage of their income on energy and fuel, primarily people with low incomes, would be hurt the most. If the tax were accompanied by a dividend or tax credit system, however, it could easily be structured to have a net progressive effect — returning more money to most taxpayers than it costs them in higher bills for energy and products whose price is linked to energy.” (FCNL Washington Newsletter, February 2009)
Devin Helfrich, FCNL’s climate policy advocate, is tirelessly spreading the word on Capitol Hill about the advantages of a carbon tax with the bulk of revenue recycled to households. We’re pleased to be working with Devin and FCNL. Read his and James Handley’s comparison of the leading cap-and-trade proposal with the simpler and more straightforward carbon tax proposals here.