Oil supermajors ExxonMobil, Shell, Total, and BP are backing a proposal for taxing carbon emissions created by veteran Republican politicians who have been seeking to raise support for their initiative.

The oil giants, as well as GM, P&G, Johnson&Johnson, and Michael Bloomberg and Stephen Hawking, among others, are the founding members of what is known as the Climate Leadership Council, which ran a full-page ad in The Wall Street Journal on Tuesday, proposing a “consensus climate solution that bridges partisan divides, strengthens our economy and protects our shared environment.”

“This plan would achieve significantly greater emissions reductions than all current and prior climate regulations, while helping America's businesses and workers get ahead,” the ad reads.

In February this year, senior Republican officials launched the Climate Leadership Council and discussed with White House officials the idea to introduce a national carbon tax, rather than using federal regulations, to address climate change.

According to The Washington Post, back in February many congressional Republicans were fiercely opposing any tax increase, while President Trump has repeatedly said that fossil fuels production is more important than cutting carbon emissions.

According to CNN, the carbon tax plan has found some support after President Trump said that he would pull the U.S. out of the Paris climate accord—a move that would isolate the U.S. from global efforts to cut emissions.

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The carbon dividend plan by the Climate Leadership Council rests on four pillars. The first is a gradually rising carbon tax that could begin at US$40 a ton and increase steadily over time. The second point—likely the selling point in the mind of the public—is that all proceeds from the carbon tax will be returned to the American people on an equal and monthly basis via dividend checks, direct deposits, or contributions to their individual retirement accounts. The third pillar is border carbon adjustments, where “border adjustments for the carbon content of both imports and exports would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt carbon pricing of their own.” The fourth pillar calls for a significant regulatory rollback, with “the elimination of regulations that are no longer necessary upon the enactment of a rising carbon tax whose longevity is secured by the popularity of dividends.”

Gregor Irwin, chief economist at strategic advisory firm Global Counsel, told CNN that the proposals are complicated and implementation could get messy. But before any implementation, the proposal needs political support, as well as federal legislation that could take years to enact the plan, or even a part of it.

“It may take another presidential election for this to be fully enacted,” Ted Halstead, founder, president & CEO of the Climate Leadership Council, told CNN.

By Tsvetana Paraskova for Oilprice.com

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