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Corporate America Is Terrified of the Green New Deal

There's a reason more big businesses are pushing for a carbon tax—and it's not because they want to fight climate change.

Oli Scarff/Getty Images

There is a “major shift” afoot in corporate America on climate change, according to Axios. On Monday, energy reporter Amy Harder reported that major companies “across virtually all sectors of the economy, including big oil producers, are beginning to lobby Washington, D.C., to put a price on carbon dioxide emissions.” These companies, in other words, are asking the government to make them pay more in taxes in an effort to solve global warming.

It’s not as surprising as it sounds. For several years now, the heads of oil companies like Suncor and ExxonMobil and BP have been publicly calling for a carbon tax, in which the government would charge polluters for every ton of climate-warming gases they emit. They’re doing this because a carbon tax, as a market-based policy rather than a mandated regulation, is the most business-friendly solution being floated in Washington.

It is notable, though, that such companies are ramping up their advocacy for a carbon tax. Three separate corporate efforts to lobby Congress on the policy have picked up steam in the last month, Harder wrote: “The nonprofit Ceres, which works on sustainable investments, is organizing a lobbying push this week with more than 75 companies, including BP, Microsoft and Tesla.” A group called “CEO Climate Dialogue,” made up of 13 Fortune 500 companies, also launched this week. And another lobbying group called “Americans for Carbon Dividends” was recently promised $1 million from two oil companies.

So why are corporations so passionate about a carbon? “It’s not really about saving the planet,” Harder noted. Indeed, in the face of growing public support for climate action, these companies increasingly realize they need to throw their weight behind some kind of climate policy. They want a carbon tax because it doesn’t threaten the industry’s very existence and allows them to keep polluting—so long as they pay for it.

But a carbon tax isn’t just corporate America’s favorite option; it’s the only option. The only serious mainstream alternative to a carbon tax is terrifying to corporations: an aggressive climate plan that doesn’t cooperate with polluters, but seeks to put them out of business.

A carbon tax does not appear in the Green New Deal—at least, not the version popularized by Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey. It doesn’t appear in Texas Congressman Beto O’Rourke’s $5 trillion plan to fight global warming. Even Washington Governor Jay Inslee—who is running for president explicitly on climate change and who spent his career trying to enact a fee on carbon—doesn’t include a carbon tax in his $9 trillion climate jobs plan.

There are many reasons for the absence of a tax in these plans, but the main one appears to be that it doesn’t guarantee emissions reductions. Democrats are starting to realize that drastic action is necessary to prevent catastrophe, and a carbon tax simply isn’t drastic enough.

To keep global warming in check, the economy needs to be completely decarbonized by the year 2050—and the changes that will get us there need to be in place in the next 11 years. Ocasio-Cortez and Markey have said they’re open to including a carbon tax in the Green New Deal, but that it’s insufficient to reach that goal. “It’s certainly possible to argue that, if we had put in place targeted regulations and progressively increasing carbon and similar taxes several decades ago, the economy could have transformed itself by now,” stated the draft text of their Green New Deal resolution. “But whether or not that is true, we did not do that, and now time has run out.”

Instead, the main strategy must be to convert the economy to clean energy and—eventually—to wipe out fossil fuels. As Ocasio-Cortez’s spokesperson told Politico in February, allowing the fossil fuel industry to persist is “not what we’re shooting for.”

By not including a carbon tax, O’Rourke and Inslee’s plans echo the Green New Deal’s reasoning, even if they don’t say it explicitly: We can’t trust corporations to solve the climate crisis themselves. “What is needed to avert the climate crisis is a massive restructuring and mobilization,” Benjamin Finnegan, a Green New Deal advocate with the nonprofit Sunrise Movement, has said. “An overhaul of our economy and society the likes of which has not been seen since World War II.”

That overhaul increasingly looks like it will be mandatory, not cooperative—unless a more moderate Democratic candidate comes out with a climate plan centered around a carbon tax. Even Joe “middle ground” Biden hasn’t done so. But that’s precisely why polluting corporations are now spending millions to lobby for it.