Exxon CEO Favors Carbon Tax Over Cap and Trade System

By Michael Kanellos

Carbon taxes got a somewhat unlikely ally today: Rex Tillerson, CEO of ExxonMobil (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.

Comments

[Ferdinand E...:]

Thank you Rex Tillerson. You are now my main man, I have been circulating a short article calling cap-and-trade nonsense, but I needed a heavy hitter outside academia to back me up. And thank you Michael Kanellos for passing this information to my good self. It looks like a good week after all.

Jan 09 08:34 AM

[Ferdinand E...:]

Hmm, my comment seems to have disappeared, but in any case thank you Michael and everyone else in this old world of ours who prefers a carbon tax to cap-and-trade.

Jan 09 08:42 AM

[Phenom1:]

How about we get rid of the hubris which believes that an earth that has been around for so many millennia, and survived admirably despite all sorts of natural disasters such as comets, meteors, a worldwide flood, solar emissions, ice ages, can be affected so adversely in a brief moment of geologic time by what man has produced. The world is actually cooler now than it has been on average for the past century or so. Silly, this greenhouse emissions stuff.

Jan 09 09:04 AM

[Mmarrkk:]

I think I like the carbon tax route because it at least is somewhat honest...this whole smoke and mirrors crap about all of this is just a new way for governments to confiscate more money! So calling it a tax is a better description. But having to choose between cap and trade and a carbon tax is kind of like saying "which would you prefer, death by plague or death by firing squad". I'd rather neither! But since governments want to steal more of our money, they have to come up with gimmicks to do so and get the masses to go along with it! Its all horsecrap anyway. They just want to push up their effective tax rates. Pretty soon, it will be 60% and everyone will be wondering how it happened!

Jan 09 09:13 AM

[scfranklin94:]

Problem with the carbon tax is that the revenue will probably be spent on things other than alternative energy. Major problem with the Cap & Trade is that bureaucrats set the quotas and hand out pollution credits. If you have to have one, at least with the carbon tax it's easier to match up tax revenue vs. gov't spending on alternative energy. Cap and trade will just lead to more government corruption as politicians jockey to get extra credits for impacted special interests - just like they do in Europe.

Jan 09 10:10 AM