WASHINGTON - Some the America's largest corporations are pitching a carbon tax plan to Republicans and Democrats in Congress, enlisting figures including former Federal Reserve chairman Janet Yellen and former Energy Secretary Ernest Moniz to try to sell the proposal

The Climate Leadership Council, which includes companies such as Exxon Mobil, JP Morgan Chase and AT&T, is proposing legislation that would create a $40 per ton tax on all carbon emissions. The tax would increase 5 percent per year above inflation, with the revenues returned to taxpayers through a dividend.

The council says such a tax would cut U.S. carbon dioxide emissions in half by 2035. The tax doesn’t meet that goal, it would increase at even faster rate. In exchange, the council and its members want to halt U.S. carbon regulations.

“This is the most cost effective and market friendly way to reduce carbon emissions. It creates powerful incentives for businesses and households to switch to lower carbon energy sources and reduce energy use,” Yellen said Thursday. “It replaces the need for more cumbersome environmental regulations.”

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The council’s plan is part of a debate on how best to attack climate, whether through regulatory schemes that set limits on carbon emissions and impose penalties for exceeding them or through market mechanisms such as taxes or cap-and-trade schemes that provide economic incentives for companies to reduce their carbon footprints.

To try and drum up support for its proposal, the council hosted a dinner in Washington Tuesday night, inviting Republican and Democrats from the Senate Climate Solutions Caucus, whose members include Sen. Lindsey Graham, R-S.C., Sen. Chris Coons, D-Del., Sen. Mitt Romney, R-Utah, and Sen. Michael Bennet, D-Colo.

“We believe its likely our plan will be introduced in both chambers on a bipartisan basis this year,” said Ted Halstead, chairman of the climate council. “Obviously it won’t pass, but the point is to tee this up ahead of the 2020 election,”

For the moment, a carbon tax remains a tough sell among Republicans and Democrats alike.

Democrats are pushing for outright fossil fuel bans and a rapid shift to renewable energy sources, such as wind and solar power. Republicans, who have long resisted efforts to address climate change, are now pushing for increased federal funding to develop technologies to reduce the amount of carbon dioxide in the atmosphere. Several companies, such as the Houston oil and gas company Occidental Petroleum, are deploying carbon capture systems that prevent carbon dioxide from escaping from industrial processes or suck the greenhouse gas from the atmosphere.

At a press conference Wednesday, House Republicans led by Minority Leader Kevin McCarthy, of California, said they would oppose any effort to put a domestic price on carbon emissions.

“[Carbon pricing] doesn’t affect the global use of carbon and that’s where the fight has to be,” said Rep. David McKinley, R-W.V. “In India and China, they’re going to continue to burn and use coal.”

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The climate council, whose leaders include former secretary of state James Baker, have heard such arguments ever since they put forward the idea of a revenue neutral carbon tax scheme more than two years ago. But a growing body of U.S. corporations and political leaders have since joined its ranks, steadily putting more pressure on Congress.

“A well-designed price on carbon is the most effective way to reduce greenhouse gas emissions across the economy,” ConocoPhillips CEO Ryan Lance said in a statement. “We support the development of a carbon dividends plan.”

Other energy companies that are members of the climate council include BP, Calpine, Royal Dutch Shell, Total and Vistra Energy.

james.osborne@chron.com

Twitter: @osborneja