There’s a Washington Post report that the WSJ op-ed proposal is much more than just an op-ed. There is an organized political move underway to make this happen. The WaPo report mostly focuses on the carbon tax and dividend, fails to mention Pillar 3 on border adjustments, and is unspecific about the proposed regulatory rollback.
The Natural Resources Defense Council (NRDC), a group I’ve been wary of in the past, states that imposition of a carbon tax does not justify reducing or eliminating regulation, a stance I find myself in agreement with here.
The fix appears to be in: the report says that the White House response was not instant denial and denunciation for the proposal. The sponsors will be meeting with White House officials soon. And Mitt Romney has even endorsed it.
I’ll note that I think the “climate change” label on this is a red herring; the main effect in the WSJ op-ed proposal is the regulatory change. Even if the tort reform of the proposal was facially limited to topics related to carbon use, the precedent this would create would serve to help undermine accountability across the board.
Though I may have to modify my just-stated stance. The WaPo report gives a number from the sponsors on a carbon tax rate: $40/ton of fuel. This is 4x the amount that I poached from other sources for my back-of-the-envelope calculations. That is a rate that becomes closer to non-negligible, and is merely 1/58th the remediation cost rather than 1/230th of it as my working figure of $10/ton had it. The $40/ton works out to $6/barrel, or about a 13% tax rate on materials. Of course, material costs are only a part of overall costs in determining profit for oil companies. And, when I went looking for some explication of the link between oil prices and profit, I found this research that links higher profits to higher commodity prices. It is at least possible that the point of the proposed carbon tax is in no way a self-sacrifice; even an artificial increase in the commodity oil price is likely to result in higher oil company profits. So now it appears that there is a backhanded benefit for the oil companies for Pillar 1 as well as the direct benefit of losing regulatory oversight with Pillar 4. Pillar 2 thus looks like a populist inducement (“free money for you!”), while Pillar 3 still is somewhat mysterious in exactly how oil companies can cash in from it. But I expect some concrete motivation exists to back the presence of Pillar 3 in the proposal beyond the one stated in the WSJ op-ed.
Offering up a proposal that doesn’t actually address the topic of the title and, when examined closely, gives enormous benefits to corporate interests does appear to be business as usual.