James Baker speaking during Baker Botts’ 175th Anniversary Celebration at the National Archives on Wednesday, May 20, 2015. Courtesy photo. ()
If former Secretary of State James Baker, a senior partner at Baker Botts in Houston, gets his way, there may be less work for litigators who sue and defend the energy industry.
Baker and his fellow members of a group composed largely of former Republican White House administration officials, called the Climate Leadership Council, unveiled this week a proposal to have congress authorize a tax on carbon emissions and, in exchange, trash proposed carbon regulations in the Clean Power Plan, created by the Obama administration.
What would such a policy switch mean for those attorneys who represent plaintiffs and those who defend power plants in court battles?
Possibly reduced revenues.
“When I first looked at it , it struck me as appealing. But my second thought was, this is going to put some lawyers out of work,” said Amy Baird, partner in Houston office of Jackson Walker.
Baird hasn’t polled any of her clients, so she’s not yet sure of their reactions, she said. But the proposal could be an economically efficient way to reduce carbon emissions, she said.
It would also, however, mean “an extreme difference in legal work” because the focus would be on auditing, a much legal labor less intensive activity, than required for the legal battles triggered in a highly regulatory environment, Baird said.
Baker’s group, which includes former Secretary of State George Shultz and former Walmart Corp. Chairman Rob Walton, has proposed gradually increasing a carbon tax at refineries or first points where fossil fuels enter the economy. Then, in turn, they propose paying carbon dividends through the Social Security system to ordinary Americans, who would recognize the incentives to conserve fuel consumption. In an example provided in their report, Baker’s group estimates that a carbon tax of $40 a ton would lead to approximately $2,000 in carbon dividend payments in the first year to a family of four.
Why would GOP-dominated Washington lawmakers agree to such a plan, given that carbon taxes have usually been liberal darlings?
Because they would get regulatory rollbacks — “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,” the report states.
“Much of the EPA’s regulatory authority over carbon dioxide emissions would be phased out, including an outright repeal of the Clean Power Plan,” the report states.
But what else goes out the window?
Lawsuits and the lawyers who file and defend against them.
“Robust carbon taxes would also make possible an end to federal and state tort liability for emitters,” the report states.
Baker and the others who signed the report appear to have anticipated that GOP-dominated Washington, controlling the executive and legislative branches of the federal government at the moment may not embrace any carbon-emission tax proposals.
The report devotes one of its sections to “The Conservative Case for Carbon Dividends.”
In it, Baker and the others argue that “Trump’s electoral victory stems in large part from his ability to speak to the increasing frustration and economic insecurity that many voters feel the political establishment has failed to address. This frustration has found expression in a growing populist sentiment and yearning for fundamental change. A carbon dividends plan responds to these powerful trends.”
It also only slighty sidesteps taking a postion on climate change.
“Mounting evidence of climate change is growing too strong to ignore. While the extent to which climate change is due to man-made causes can be questioned, the risks associated with future warming are too big and should be hedged. At least we need an insurance policy,” the report states.
“For too long, many Republicans have looked the other way, forfeiting the policy initiative to those who favor growth-inhibiting command-and-control regulations, and fostering a needless climate divide between the GOP and the scientific, business, military, religious, civic and international mainstream. Now that the Republican Party controls the White House and Congress, it has the opportunity and responsibility to promote a climate plan that showcases the full power of enduring conservative convictions,” the report states.