This group, which includes Exxon Mobil, is proposing a four-part plan:

1. A $40 per ton tax on carbon rising annually at a gradual rate;
2. Tax revenues generated would be refunded to all citizens (hence the name, “Carbon Dividends”);
3. This plan would terminate the EPA’s regulatory authority over carbon emissions and specifically terminate the recently enacted Clean Power Plan;
4. Require “border carbon adjustments to level the playing field and permit American competitiveness.” (Other relatively high CO2 emitting countries apart from the US are China and Russia).

This article I am linking to is highly skeptical, as are some prominent environmental groups, due to the restrictions it would place on EPA regulation. I’m not sure yet whether I would support it. So far EPA regulation has not accomplished anything. Oil and gas companies must be afraid that it eventually will, and see this as a choice between a predictable and manageable business cost versus an unknown but potentially unlimited risk. What isn’t mentioned here is protection from litigation, which I have heard might also be part of the deal. They might be afraid of that too.

I support pollution taxes in general. I have made a career of helping regulated entities (water utilities in my case) deal with EPA regulations, and I don’t see them as particularly rational, effective, or economical even when the underlying laws are well-thought-out. It might be worth trying something different. Once we have a carbon tax on the books, the actual amount can be adjusted until it is effective, and the concept can potentially be applied to other types of waste and pollution.