Oil companies slipped a present to themselves into this carbon tax plan

Fossil fuel corporations would be shielded from climate lawsuits under a proposal several are supporting.

CREDIT: Friso Gentsch/picture alliance via Getty Images
CREDIT: Friso Gentsch/picture alliance via Getty Images

Two of the world’s most powerful oil companies are uniting behind a carbon pricing plan, in a surprising move that would require corporations to pay for the greenhouse gases they produce.

But their support hinges on a major caveat: The plan would both end regulations on carbon emissions and protect companies from mounting lawsuits targeting the role of oil companies in contributing to climate change.

This comes as global temperatures continue to set new records and the climate crisis becomes a hot-button issue among voters — with at least one 2020 candidate eyeing legal action against oil companies as part of a wider-scale climate proposal.

Oil giants BP and Shell have each pledged $1 million to Americans for Carbon Dividends (AFCD), a Republican-backed lobbying group under the Climate Leadership Council, to help fund its push for a carbon tax that would return revenue to consumers. ExxonMobil, ConocoPhillips, and other major corporations have already indicated their support for the proposal, which would impose a tax beginning at $40 per ton and gradually rise. Equal quarterly payments would then be given back to U.S. residents to counter the rising cost of energy.


The Baker-Shultz Carbon Dividends Plan takes its name from two former Republican secretaries of state. According to AFCD’s website, the plan is “based on the conservative principles of free markets and limited government, and offers the most popular, equitable and politically viable climate solution.”

The proposal has won support from private industry and from conservative voices. Some Republican lawmakers are growing concerned about their party’s perceived inaction on climate change, at a time when progressive Democrats like Rep. Alexandria Ocasio-Cortez (D-NY) are uniting behind proposals like the Green New Deal resolution.

Environmentalists, however, have been quick to point out the benefits to oil companies included in the new carbon pricing proposal. Under the plan, carbon regulations overseen by the Environmental Protection Agency (EPA) would be scrapped, with the tax meant to serve as a substitute. That includes things like the Obama-era Clean Power Plan, which has come under fire from the Trump administration.

Moreover, the proposal would eliminate a growing source of concern for oil companies — the lawsuits holding them accountable for their contributions to global warming.

A 2015 investigation by InsideClimate News found that Exxon was aware of climate change as early as 1977, but opted to keep the information from the public while continuing to expand oil and gas production. Along with other corporations, the company also continued to deny the existence of climate change for decades, actively opposing efforts to elevate climate science and spreading misinformation, in addition to funding climate denial efforts at think tanks.


Exxon’s own scientists conducted numerous studies into the future impacts of fossil fuels on the world’s atmosphere. The company’s understanding of the issue was so precise that in 1982 the corporation predicted how high worldwide carbon emissions would be today. This month, carbon dioxide levels in the atmosphere reached the highest levels ever recorded in human history, exactly reflecting an amount Exxon projected decades ago.

Since the revelations about Exxon’s climate knowledge and subsequent efforts to stall action, several states have launched lawsuits against it and other oil companies. These lawsuits, spearheaded by states including New York and Massachusetts, argue that the companies should be held accountable for their role in willfully contributing to climate change. Some have focused on what information companies may have withheld from the public, while others home in on recouping money for climate impacts.

Those efforts have been met with mixed success, including several rulings arguing that the courts are not the right venue for assigning blame over global warming. But in January, the Supreme Court declined to block a Massachusetts investigation into the extent of Exxon’s efforts to mislead the public on climate change. Other lawsuits against Exxon and other corporations have also been allowed to proceed.

The litigation is taking a toll on the reputation of oil companies, as are rising global concerns about climate impacts.

Carbon pricing has emerged as a potential source of common ground, appealing to lawmakers on both sides of the aisle, in addition to both public and private business interests.

But some progressives say caveats like the kind in AFCD’s plan are not compatible with climate action, including Green New Deal architects. Julian Brave NoiseCat, who directs Green New Deal strategy for the progressive think tank Data for Progress, has expressed skepticism about AFCD’s proposal. Cautioning “don’t believe the hype!” on Twitter, he noted that both BP and ConocoPhillips are among the Climate Leadership Council’s energy founding members. Environmental advocates are skeptical of any carbon tax push backed by oil companies.


Moreover, carbon tax efforts that have been more progressive have historically faced hefty opposition from fossil fuel corporations. During the 2018 midterm elections, BP America gave more than $9.5 million to stop a carbon pricing ballot initiative in Washington state, supported by social justice and labor groups, that ultimately failed.

Some Republicans also remain skeptical, including Rep. Kevin Brady (R-TX), the top Republican on the House Ways and Means committee. “A carbon tax is not the solution to address our environmental challenges,” Brady argued last week.

Democratic presidential contenders are taking a different approach, although respective climate plans differ vastly. Campaign officials for Mayor Pete Buttigieg (D) of South Bend, Indiana, told ThinkProgress that the candidate’s climate plan involves “a carbon tax-and-dividend,” potentially in line with proposals like the one pushed by AFCD. Gov. Jay Inslee (D-WA) has meanwhile released the most sweeping climate plan to date, one that would involve a massive overhaul of the U.S. economy to reach net-zero emissions within 15 years at most.

And some are directly taking aim at oil companies. A plan released last month by former Rep. Beto O’Rourke (D-TX) could pave the way for government action against such corporations; the candidate’s plan calls for “enforcing our laws to hold polluters accountable, including for their historical actions or crimes.”