Lindsey Graham Backs Carbon Fee

The drive to enact a carbon royalty (or fee) received an important boost last week. South Carolina Senator Lindsey Graham became the first Republican in the Senate to publicly endorse a "price on carbon” to fight climate change.

"I'm a Republican. I believe that the greenhouse effect is real, that CO2 emissions generated by man is creating our greenhouse gas effect that traps heat, and the planet is warming," said Graham. "A price on carbon—that's the way to go in my view."

He said that he is working with Senator Sheldon Whitehouse (D, RI) on legislation. Whitehouse and Senator Brian Schatz (D-HI) introduced a carbon tax bill in July, appearing at the American Enterprise Institute (AEI) to announce it. Graham, who said he would take the idea to the White House for consideration, called for climate change legislation during the 2016 election but did not mention a price on carbon explicitly.

From our meetings with scores of senators and their aides over the past three years, we know that a number of them privately support this free-market idea or are at least open to it. We will try to persuade them to join Graham in speaking out publicly.

But we also know that an important factor in their willingness to do so is support of such a fee from business leaders in their states. That’s why we are working with a growing coalition to develop this support. Our partners include Business Forward, the Evangelical Environmental Network, the American Sustainable Business Council, the National Wildlife Federation, and the Citizens’ Climate Lobby.

Graham’s statement is the latest sign of GOP movement toward national action to counter climate change. In February seven prominent Republican elder statesmen, including former Secretaries of State James Baker and George Shultz and former Treasury Secretary Henry Paulson, proposed a carbon fee with all proceeds being paid as a regular dividend to taxpayers. Meanwhile, the House Climate Solutions Caucus continues to grow and now has 56 members, half of them Republicans. The latest additions are Pat Tiberi (R-OH), Nydia Velazquez (D-NY), John Larson (D-CT), and Chris Collins (R-NY).

Like Graham, Senator John McCain (R-AZ) spoke last week about the importance of action, though he did not indicate his preferred solution. "I believe it is our responsibility to safeguard our environment and protect the planet," he said. "Climate change is real and requires pragmatic problem-solving to address."

This increasing receptiveness to a royalty fee coincides with the GOP’s drive to pass tax reform legislation. Because tax reform proponents are having trouble finding a way to make up for the revenue reduction that large tax cuts would cause, we are continuing to make the case that a carbon royalty could prevent a tax cut package from driving up the national debt--while enabling the United States to do its part to reduce greenhouse gas emissions. It is dealmaking season in Washington, and we intend to do whatever we can to move this idea into the final bill.