By Michael Kanellos
Carbon taxes got a somewhat unlikely ally today: Rex Tillerson, CEO of ExxonMobil (NYSE:XOM).
“My greatest concern is that policy makers will attempt to mandate or ordain solutions that are doomed to fail,” such as a cap-and-trade system, Tillerson said in a speech at the Woodrow Wilson Center, according to a report in Dow Jones. “A carbon tax would be a more direct and transparent approach.”
Tillerson joins a host of others who have come out in recent months in favor of a tax, versus a cap and trade system. Late last year Representative John Larson (D. Conn) said he’d introduce carbon tax legislation. He introduced a bill for carbon taxes in 2007 but it went down in flames. Al Gore likes them and so does James Hansen. British Columbia implemented one last year.
Barack Obama has been on record of being a cap and trade kind of guy, but don’t forget: he was running for office. Saying you’re in favor of any tax is instant death. (John Doerr also testified in front of Congress — without crying — and seems to favor both a cap-and-trade and a carbon tax.)
Although it’s hard to say which will be implemented, there does seem to be momentum for a tax. And there are good reasons for it.
One, it raises revenue in a much more rapid manner. Two, everybody pays, eliminating the free pollution problem and adding a sense of fairness. Advocates say it will be easier to implement. Some VCs with connection to Washington have told me that a cap-and-trade system might not even be possible until a second Obama administration.
Think about it for a sec. It took the implosion of Wall Street and the economy as a whole to pass the investment tax credits, which are relatively straightforward. You think Congressional committees are really going to hop to it on a cap-and-trade system. At least a carbon tax will be something they can digest.
But we shall see.