The Climate Leadership Council is backed by industry and promotes a climate liability waiverThe Climate Leadership Council, backed by many fossil fuel giants, pushes a carbon tax proposal that would end climate liability suits. Photo credit: CLC, via Twitter
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By Karen Savage

Congressional leaders at a hearing on the economic and health consequences of climate change on Wednesday weren’t told that a prominent carbon tax proposal backed by the oil and gas industry would also immunize those companies from climate liability lawsuits. The proposal being discussed, the Climate Leadership Council’s Baker Shultz Carbon Dividends Plan, has drawn support from companies like Exxon, which is already battling several of those lawsuits.

“At the heart of the Baker-Schultz Plan is a ‘grand bargain’ that trades a robust and rising carbon fee for regulatory streamlining, thereby appealing to both environmentalists and businesses,” said Ted Halstead, chief executive of the Climate Leadership Council, a policy group, and Americans For Carbon Dividends, an industry-backed organization founded to promote the plan.

What Halstead did not mention in his oral testimony, or in the question and answer period that followed, is that the plan would let oil companies off the hook for climate-related damages. “Robust carbon taxes would also make possible an end to federal and state tort liability for emitters,” the plan reads.

Halstead was invited to testify before the House Ways and Means Committee at Wednesday’s hearing. During prepared testimony, Halstead, who founded the CLC in 2017, outlined details of the Baker-Schultz plan, which calls for a $40 per metric ton carbon tax in exchange for the climate liability waiver and a rollback of most greenhouse gas regulations.  

The hearing, which lasted more than four hours, included testimony from scientists and public health experts, including Dr. Katherine Marvel, associate research scientist at NASA Goddard Institute for Space Studies.

The Ways and Means Committee has jurisdiction over taxation and tariffs, as well as programs like Social Security, Unemployment and Medicare. The hearing was meant to delve into the economic and public health impacts of climate change. Halstead was invited to speak about the Baker-Schultz carbon tax proposal.

The plan proposes a gradually rising carbon fee, with all of the proceeds paid to Americans in a monthly dividend payment. For companies that import or export goods to countries without a carbon pricing system, a border adjustment would be specified.

Halstead said the fee would add about 36 cents to the cost of a gallon of gas.

The plan also includes what it calls “regulatory simplification:” a rollback of carbon dioxide emissions regulations. The plans authors claim the program would reduce emissions more than all current and prior climate regulations.

Although most U.S. taxpayers would benefit from monthly dividend payments, none of the proceeds would help cities and states pay for the astronomical costs of climate mitigation and adaptation.

The Climate Leadership Council and Americans for Carbon Dividends, which has spearheaded the push to implement the Baker-Schultz Plan, have worked to garner support for the plan over the past year, placing op-eds in several media outlets. Most do not mention that the plan would eliminate climate liability suits.

“It’s no surprise that the CLC doesn’t talk about the permanent legal immunity provision lurking inside their fossil fuel-funded Trojan Horse,” said Kathrin Sears, supervisor for Marin County, which filed one of the liability suits pending against fossil fuel companies. Marin, along with the county of San Mateo and the city of Imperial Beach, Calif. filed sued 37 companies in 2017 seeking compensation for climate damages.

“Letting oil, gas, and coal companies off the hook means taxpayers from Marin to Miami will have to pay tens of billions of dollars in order to protect our communities from the climate change-related costs and damages those companies knowingly caused,” Sears said.

According to Halstead, the Climate Leadership Council has also coordinated a bipartisan statement supporting carbon dividends signed by more than 3,500 economists and published in the Wall Street Journal, although the statement did not directly support the Baker-Schultz Plan.

Founding members of the Climate Leadership Council include oil giants Exxon, BP, Shell, and Total, corporate giants P & G, Johnson & Johnson, Pepsico, and Excelon. Former Fed chairman Ben Bernanke, former New York City Mayor Michael Bloomberg and former EPA administrator Christine Todd Whitman are also founding members, along with the environmental organization The Nature Conservancy.  

Halstead praised Microsoft for recently joining the group.

Microsoft is based in King County, Wash., which has filed a liability suit against Exxon, Shell, Chevron, BP and ConocoPhillips. The county alleges that the companies knew for decades about fossil fuels’ role in driving climate change and the potential impacts but deliberately failed to inform the public about those risks.  The county is demanding the oil companies pay compensatory damages into an abatement fund to help cover the costs of protecting its residents and property.

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