A group of nearly a dozen multinational corporations is backing a plan from senior Republican statesmen to replace President Obama's greenhouse-gas regulations with a carbon tax.
The coalition of former GOP officials -- which includes three former secretaries of the Treasury, James A. Baker, Henry Paulson and George P. Shultz, and calls itself the Climate Leadership Council -- made headlines in February when it proposed eliminating nearly all Obama-era climate policies in exchange for a tax on carbon emissions starting at $40 per ton.
Framing the proposal as a "carbon dividend," revenue raised by the tax would be redistributed as a quarterly check to Americans under their plan.
But the proposal is being pushed while Republicans control the White House and Congress, many of whom are dismissive of the science of climate change, much less any policy proposal to address it. Earlier this month, President Trump pulled the United States out of the Paris climate accord.
Nevertheless, on Tuesday, a group of 11 companies, which include oil majors BP, ExxonMobil, Royal Dutch Shell and Total and consumer-facing brands General Motors, Johnson & Johnson, PepsiCo, Procter & Gamble and Unilever, gave new life to the plan by endorsing it.
Each of the oil and gas companies mentioned above had, in one form or another, supported some kind of carbon pricing in the past. But supporting a concrete climate-policy proposal is new territory for the non-energy firms in the coalition.
“The framework announced today by the Climate Leadership Council offers a path that will help take constructive steps toward addressing climate change and provide transparency and predictability for business," David S. Taylor, president and chief executive of Procter & Gamble, said in a statement obtained by the Energy 202.
In addition to the companies, several individuals, including former New York Mayor Michael Bloomberg, physicist Stephen Hawking and philanthropist Laurene Powell Jobs, endorsed the proposal. This year, Bloomberg has also produced a documentary and book about climate issues.
A revenue-neutral carbon tax -- that is, one that gives revenue directly back to citizens -- has long been popular with economists, and was pushed by ExxonMobil early in Obama's first term as his administration sought to pass a cap-and-trade law in Congress. (Indeed, one of the proposal's co-authors is David Bailey, who used to work on climate policy at Exxon.)
The novelty of the proposal from the Climate Leadership Council is to marry such a carbon tax with a rollback of Obama-era regulatory policy, which the group says will no longer be necessary to reduce carbon emissions with the tax in place. The group also calls for "border adjustments" to be levied on foreign goods from countries without a similar carbon-pricing system in place.
What's next? Ted Halstead, who founded the council, said that unified Republican government is a golden opportunity for the GOP to shape climate policy in conservative fashion while they're in power. In February, Baker and his colleagues met with Gary Cohn, head of the National Economic Council and one of a handful of Trump advisers who pressed the president to stay in the Paris agreement, but the White House has not backed the proposal.
“There’s a chance that this White House comes around to this plan," said Halstead, noting that Trump said he was open to renegotiating an international climate deal.
He added: "It’s a less than 50 percent chance.”
Congress is even more of a longshot, in his opinion. "In this political environment," he said, "it will not start on Capitol Hill."
Then, why now? Trump has, after all, already pulled out of the Paris agreement. At least 22 GOP senators agreed with that decision.
But multinationals think in strategic terms beyond just a single presidential administration or congressional session. If the political tide turns and Democrats return to power, industry wants to be ready.
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-- Starting today, Energy Secretary Rick Perry will embark on a whirlwind tour through Congress, offering his first congressional testimony since becoming energy secretary. He is scheduled to make stops at a House Appropriations’ subcommittee today, a Senate Appropriations' subcommittee on Wednesday and the full Senate Energy and Natural Resources Committee on Thursday. The topic of each hearing: the proposed budget for the Energy Department.
In May, President Trump proposed slashing the non-nuclear-weapons portion of the Energy Department's budget by 18 percent. The Energy Department, which funds the bulk of basic science research for the federal government, traditionally has enjoyed bipartisan support. Expect to see that on display this week, with Democrats grilling Perry on cuts to climate-related science (especially after the closure of the department's International Climate Office) and Republicans defending job-creating DOE labs in their districts and elsewhere.
Also expect to see another round of questions on what, exactly, Perry thinks about climate change after going on national television on Monday and saying carbon dioxide wasn't a primary driver of climate change. (Read more below.) Last time around, in January, Perry told Congress that the climate is changing and that "some of it is naturally occurring, but some of it is also caused by man-made activity."
But another, more consequential topic of discussion than Perry's personal views on climate change is the DOE's wide-ranging study of the U.S. electric grid. Commissioned by Perry in April, the study is set to examine whether environmental policies such as subsidies for wind and solar energy are driving recent coal-fired and nuclear power-plant closures, and whether the transition of some "baseload” generation -- i.e., plants that provide a steady stream of electricity on demand -- to solar and wind sources (which only produce power when the sun shines or the wind blows) is threatening grid stability. Wind and solar advocates worried that the study, which could come as early as this week, was started with a foregone (and anti-renewable) conclusion.
-- Interior Secretary Ryan Zinke will also testify in Senate and House hearings on his department's proposed budget, which Trump wants to cut by 12 percent. In an interview with Reuters published Monday, Zinke laid out a vision for his department that we can expect to hear again in Congress -- it, he argues that more drilling and mining on federal lands can help the United States become not just energy independent, but "dominant." Where have we heard that buzzword before?
-- On Monday, Axios reported that Jeff Holmstead, a former assistant administrator in President George W. Bush's Environmental Protection Agency, is expected to be named Trump's pick for the No. 2 spot in the EPA under Pruitt. But, the law and lobbying firm Bracewell, where Holmstead is currently a partner, threw a bit of cold water on the story.
"We are in no position to confirm whether the Administration is actively considering Jeff for the post, and the AXIOS article seems highly premature," Scott Segal, head of the firm's policy group, told The Washington Post in an email. "However, we understand why the story is plausible."
Holmstead has lobbied in recent years on behalf of coal and energy industries with clients that include Arch Coal Inc., Duke Energy Corp., Southern Co., the Electric Reliability Coordinating Council and Salt River Project, according to the Center for Responsive Politics. Holmstead was also previously an adjunct scholar with the Citizens for the Environment, a branch of the Koch-funded Citizens for a Sound Economy.
At least one issue some conservatives may take with if Holmstead nominated: He has expressed opposition to repealing a 2009 endangerment finding that concluded carbon emissions endanger public health. The finding was the foundation for Obama-era climate-change regulations. “I don’t want to say it’s impossible, but it’s a lot harder than saying we want to move in a new policy direction,” Holmstead told Vox earlier this year.
But last year, Holmstead questioned the Obama-era Clean Power Plan in an interview with the Washington Examiner. “People have said you can't undo the endangerment finding … and that may be true. But you don't need to revoke the endangerment finding to say the Clean Power Plan goes way beyond statutory authority,” he said.
Holmstead also told the Examiner that he would advise a Republican president against withdrawing from the Paris climate accord.
“If I were advising the new president, I would advise that it would be a mistake to try to take any action to pull out of Paris. Paris is what it is. It is largely a political statement, and I don't think there would be any reason either legal or political to try to withdraw from the treaty,” Holmstead said in April 2016. “You would be using up a lot of political capital on something that doesn't matter very much.”
THE CLAIM: Rick Perry did himself few favors on Monday ahead of testifying in front of Congress today by going on national television and saying that carbon dioxide is not a primary cause of climate change.
On Monday, when asked if CO2 is “the primary control knob for the temperature of the Earth and for climate" on CNBC’s “Squawk Box," Perry said that “No, most likely the primary control knob is the ocean waters and this environment that we live in.”
If that exchange between Perry and CNBC host Joe Kernen sounds familiar, that's because it is. In March, Scott Pruitt told that same host on that same program in response to the same question: "I think that measuring with precision human activity on the climate is something very challenging to do and there's tremendous disagreement about the degree of impact, so no, I would not agree that it's a primary contributor to the global warming that we see."
In response, Rep. Earl Blumenauer (D-Ore.) called Perry’s comments “disturbing déjà vu” and sent Perry the same packet of educational materials on climate science that he sent Pruitt.
Disturbing déjà vu. Rick Perry needs to review the materials on climate science that I sent Scott Pruitt in March. I sent over to him today. https://t.co/5ZBrbnPIaf— Earl Blumenauer (@repblumenauer) June 19, 2017
This NASA climate scientist, who happened to co-author a paper titled "Atmospheric CO2: Principal Control Knob Governing Earth’s Temperature," tweeted in response to Perry:
TFW the title of a science paper you co-wrote becomes a litmus test for understanding climate change. 🤔 https://t.co/rPQhPqey0k— Gavin Schmidt (@ClimateOfGavin) June 19, 2017
in it, we asked the question how important is CO2 as a greenhouse gas to the current climate? and what would happen if it wasn't there?— Gavin Schmidt (@ClimateOfGavin) June 19, 2017
The answers are: Very, and it would get much colder (> 35ºC cooler). Neither conclusion was that surprising. pic.twitter.com/0I4iVfY82F— Gavin Schmidt (@ClimateOfGavin) June 19, 2017
in the big picture, CO2 (not water vapor, not continental configuration, not clouds) is the principle control knob for climate.— Gavin Schmidt (@ClimateOfGavin) June 19, 2017
THE FACTS: The Post’s Steven Mufson pointed out that Perry’s comments contradict consensus from the scientific community. Indeed, scientists at the agency Pruitt runs have reached the opposite conclusion. "Carbon dioxide is the primary greenhouse gas that is contributing to recent climate change," the agency's website says. NASA, the National Oceanic and Atmospheric Administration and the United Nations’ Intergovernmental Panel on Climate Change have all reached the same conclusion.
-- On Monday, South Korea's newly elected president, Moon Jae-in, announced the nation will scrap plans to build more nuclear power plants and extend the life of existing ones. The decision, made as anti-nuclear sentiment spreads in South Korea following the Fukushima accident in nearby Japan, could have far-rippling effects. The nation, bereft of fossil fuels, has pioneered some of the most advanced nuclear reactors in the world, even selling them to other nations. But if that export stumbles as a result of Moon Jae-in's decision, it could stymie de-carbonization efforts abroad that rely on nuclear power to replace coal-fired plants.
-- Once, it was assumed that Africa would be electrified the same way that North America and Europe were: through building out an electric grid infrastructure. But a nascent solar industry in Africa, funded by Western dollars and run with Silicon Valley ethos, is trying to power communities through solar panels for individual homes, according to a New Yorker story by Bill McKibben, founder of the climate nonprofit 350.org and a former staff writer for that magazine. The trend mitigates the need for power plants that burn fossil fuels but, McKibben writes, "[t]here’s more than a whiff of colonialism about the rush of Westerners and Western money into Africa."
-- Scientists are engaged in a bitter and personal feud over how much power the United States can get from renewable sources, reports my colleague Chris Mooney.
On the one side is Stanford professor Mark Jacobson and colleagues who argued in a 2015 paper that between 2050 and 2055, the United States could be powered mainly by wind, solar and hydroelectric energy sources whereby “no natural gas, biofuels, nuclear power, or stationary batteries are needed.”
On the other side is Christopher Clack of the National Oceanic and Atmospheric Administration, who with 20 co-authors published a counter-study arguing that that paper “used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions.” They argue that study fails to prove that such a dramatic energy transition can be accomplished affordably, given that energy storage technology that make wind and solar energy work when the wind isn't blowing or sun isn't shining may not arrived in time for Jacobson's projections.
Jacobson fired back by writing in a letter that Clack’s critique is itself “riddled with errors” and “demonstrably false" and that his team is biased toward fossil fuels.
-- Nearly one-third of the global population suffers deadly levels of heat for at least 20 days during the year, according to new research reported on by Chelsea Harvey for The Post. By the end of the century, thanks to climate change, that number could climb above 70 percent.
-- The good news: Scientists announced on Monday that a mass bleaching of coral reefs worldwide is finally easing after three years, the Associated Press reports. The bad news: "About three-quarters of the world’s delicate coral reefs were damaged or killed by hot water in what scientists say was the largest coral catastrophe."
- Energy Secretary Rick Perry is scheduled to testify before the House Appropriations’ Subcommittee on Energy and Water Development and Related Agencies on the department’s proposed budget.
- The Senate Committee on Energy and Natural Resources’ Subcommittee on Public Lands, Forests and Mining's will hold an oversight hearing on restoring watersheds and large landscapes.
- The Bipartisan Policy Center will hold an event on energy innovation today featuring a keynote speech by Sen. Lamar Alexander and panel discussion moderated by Axios reporter Ben Geman.
- The US Chamber of Commerce’s Institute for 21st Century Energy will host a celebration in honor of its 10th anniversary with a forum that includes EPA head Scott Pruitt and Interior Secretary Ryan Zinke.
- Perry will also testify before the Senate Appropriations Subcommittee on Energy and Water Development on Wednesday and the Senate Energy and Natural Resources Committee on Thursday on the department’s budget.
- The Ninth Annual Congressional Women’s Softball Game will take place on Wednesday.
- Former Defense secretary Chuck Hagel, former Energy secretary Ernest Moniz, former EPA head Christie Todd Whitman will speak at an energy and climate event at the Atlantic Council on Wednesday.
- Rep. Rodney Davis (R-Il), Rep. John Delaney (D-Md.), Rep. Ted Yoho (R-Fla.) and Rep. Eleanor Holmes Norton (D-D.C.) will take part in Bloomberg Government’s conversation on the latest innovations for America’s infrastructure on Wednesday.
- Moniz will speak at an event Wednesday at the National Press Club.
- Zinke will testify on Tuesday before the Senate Committee on Energy and Natural Resources on the department’s budget request.
- Zinke will also testify about the department’s budget during a hearing before the Senate Appropriations Subcommittee on the Department of the Interior, Environment and Related Agencies on Wednesday and the House Committee on Natural Resources on Thursday.
- The Senate Commerce, Science and Transportation Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard will hold a hearing on marine debris on Thursday.
- The House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials will hold a hearingon rail infrastructure on Thursday.
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