Many pieces will have to fall into place during the upcoming election cycle for the Green New Deal to become a reality. But should a supportive slate of Democrats assume control of the White House and the Senate, we can be sure that any legislative package aimed at transitioning the American economy to carbon neutrality over the next ten years will face steep opposition from broad sections of corporate America and their political enablers in the Republican Party. After all, even the initial, largely symbolic “resolution” introduced last year in Congress by Representative Alexandria Ocasio-Cortez of New York and Senator Ed Markey of Massachusetts was greeted by an avalanche of ruling class outrage. Among the most memorable were charges that the Green New Deal represented “far left social engineering,” as Majority Leader Mitch McConnell described it on the Senate floor, or was nothing more than a “Trojan horse for socialism,” as the Chamber of Commerce bellowed from the sidelines.

. . . [A]ny legislative package aimed at transitioning the American economy to carbon neutrality over the next ten years will face steep opposition from broad sections of corporate America . . .

Such predictable histrionics aside, if momentum for the plan does build following November’s elections, there are already some pretty good indications of what the business community’s game plan for defeating the Green New Deal might look like. Take, for instance, the brief but revealing career of Americans for Carbon Dividends (AFCD), a political action committee formed in 2018 to push for a “bipartisan climate solution where all sides win.” Given the enormity of the climate crisis, if that sounds like deceptively optimistic business- speak—well, that’s because it is. AFCD is the creation of two former Senators, Republican Trent Lott of Mississippi and Democrat John Breaux of Louisiana, who since leaving public office have gone on to become high-profile corporate lobbyists, most recently at mega-firm Squire Patton Boggs where they are both senior counsels. Lott and Breaux are longtime allies of the oil and gas industry (Breaux, a centrist former head of the Democratic National Committee, also served as the Co-Chair of the Congressional Oil and Gas Caucus). AFCD, in turn, receives the lion’s share of its financial support from a veritable Who’s Who of industrial energy producers, including BP, ExxonMobil, Shell, ConocoPhillips, and Exelon, the country’s largest operator of nuclear power plants.

After years of systematically denying the existence of climate change, the “bipartisan climate solution” AFCD’s backers are now throwing their collective corporate weight behind a carbon tax. Specifically, a carbon “tax-and-dividends” plan developed by two Republican establishmentarians ne plus ultra: James Baker, a two-time White House Chief of Staff who held cabinet posts under Ronald Reagan and George H.W. Bush; and George Shultz, an economist who served in four different cabinet positions under Reagan and Richard Nixon. Their proposal, first outlined in 2017, imposes a tax on carbon beginning at $40 per ton and increasing “gradually” from there, the proceeds of which would be paid out as dividends to the American public on a per capita basis, starting at around $2,000 a year for a family of four. Despite some rather significant doubts about whether a carbon tax would even be effective at reducing overall carbon emissions, proponents of the Baker-Shultz plan claim that “no other policy lever can match its economy-wide effects in changing investment decisions and individual behavior.” And so to bring it about, the plan’s supporters launched a new non-profit, the Climate Leadership Council (CLC), which quickly recruited support from a wide array of corporate backers (including twelve Fortune 100 companies), as well as a number of larger environmental groups, renewable energy trade associations, and a host of mainstream economists. It now boasts of being the “broadest climate coalition in U.S. history.”

Americans for Carbon Dividends . . . dispatches prominent supporters to draw contrasts between the supposed pie-in-the-sky idealism of the Green New Deal and the more limited, pragmatic appeal of a carbon tax . . .

AFCD is, in effect, the CLC’s political fundraising and lobbying arm—and its goal, clearly, is to get out ahead of the climate change fight, before the more progressive forces behind the Green New Deal are in a position to make policy. In 2019, according to the Center for Responsive Politics, it was the eighth largest environmental lobby group by expenditures— not earth-shattering, perhaps, but still ahead of such familiar stalwarts as the World Wildlife Fund, the League of Conservation Voters, and the Sierra Club. Every cent, meanwhile, was spent on educating members of Congress and the Executive Branch about the Baker-Shultz Carbon Dividends Plan, which Lott and Breaux have called “the only realistic, workable path now open to us if we want to solve one of the most daunting challenges of our time.”

AFCD works to shape the public conversation around climate policy in significant ways as well. Sometimes, it dispatches prominent supporters to draw contrasts between the sup- posed pie-in-the-sky idealism of the Green New Deal and the more limited, pragmatic appeal of a carbon tax—as when former Federal Reserve Chair (and CLC Founding Member) Janet Yellen sang the praises of the Baker-Shultz plan in the Financial Times by calling it “much more efficient and less costly than methods proposed by the proponents of the Green New Deal.” AFCD also arranges for polling meant to highlight the plan’s greater public support—especially among Republican voters, who tend to oppose the Green New Deal but, according to one AFCD poll conducted in 2018, back a tax-and-dividends plan like the one in the Baker-Shultz proposal by a 23-point margin.

AFCD is even going so far as attempting to capture (or at least simulate) the youthful energy that has recently animated the climate justice movement—and especially Green New Deal–supporting youth groups like the Sunrise Movement—by seeding its own campus-based student wing. In December 2019, the group launched an initiative called Young Conservatives for Carbon Dividends, which draws together campus groups at more than two-dozen colleges to beat the drum for the Baker-Shultz plan. Deploying a millenarian rhetorical style that will sound familiar to any- one who has listened to the rousing speeches of Greta Thunberg (“We claim to be the party that cares about the future that our children will inherit, and we need climate policy that reflects that,” declaimed one senior at Harvard), the only thing that differentiates young AFCD sup- porters from their Green New Deal counter- parts is the nature of their policy ambitions. “[We need to] harness the power of the free market to solve climate change through innovation,” the same student continued. “Our plan would provide incentives for companies and individuals to lower emissions in ways they think are best.”

AFCD’s campaign to sell Washington and the American public on the Baker-Shultz carbon tax as a “realistic, workable” plan for addressing climate change is, in fact, just one of a number of new, business-backed initiatives to promote market-based alternatives to the Green New Deal. In May 2019, thirteen Fortune 500 companies, including Ford, Citi, and chemical giants Dow, DuPont, and BASF, along with four environmental non-governmental organizations (NGOs)—Center for Climate and Energy Solutions, Environmental Defense Fund, The Nature Conservancy, and World Resources Institute—launched a new group called the CEO Climate Dialogue, whose over- arching goal is “climate policies that will increase regulatory and business certainty, reduce climate risk, and spur investment and innovation needed to meet science-based emissions reduction targets.” Their top priority is establishing an “economy-wide carbon pricing policy”—in other words, a carbon tax— designed to “meet the climate challenge at the lowest possible cost.” Later that month, Ceres, a network of institutional investors that supports sustainable businesses and renewable energy development, organized a two-day lobbying blitz in Washington with more than seventy-five companies—including Shell, BP, and PG&E, the country’s largest utility—calling on Congress to set an economy-wide benchmark by establishing a carbon pricing policy. And a carbon tax is not the only market-based approach to climate change that big business has put its substantial lobbying muscle behind in recent years. ExxonMobil and other oil and gas giants also spent millions lobbying Congress in 2019 in support of the development of carbon capture technology, which traps greenhouse gases when they are emitted and prevents them from entering the atmosphere.

ExxonMobil and other oil and gas giants . . . spent millions lobbying Congress in 2019 in support of the development of carbon capture technology . . .

To be sure, five or ten years ago, even this kind of support for carbon-reducing technologies or climate policies from the country’s largest companies (and worst climate offenders) would have been unimaginable. It is a sign of just how undeniable the scientific consensus on climate change has become that corporate lobbyists, establishment Republicans, and the largest oil and gas producers in the world are now loudly championing a carbon pricing policy that revolves around a graduated corporate tax—three words that are as anathema to the modern-day Republican Party and its big business cronies as it gets. But that about-face should also be a pretty clear sign of just how fiercely much of the corporate right is prepared to resist the more ambitiously transformative, government-directed industrial policy envisioned by the progressive proponents of the Green New Deal. Perhaps not quite a Trojan horse for socialism, the Green New Deal nevertheless promises to reach far beyond the market-based approaches to addressing climate change that Exxon, BP, and their hatchet-men at groups like AFCD remain most comfortable with.

Perhaps not quite a Trojan horse for socialism, the Green New Deal nevertheless promises to reach far beyond the market-based approaches . . . that Exxon, BP, and their hatchet-men at groups like AFCD remain most comfortable with.

A cheer or two, then, for the companies at the American Sustainable Business Council (ASBC)—which include Ben and Jerry’s, King Arthur Flour, and Seventh Generation—who have come out in support of the Green New Deal. Recognizing that “today’s urgent challenges demand we scale solutions much faster than private industry can do alone,” the ASBC believes that “the Green New Deal’s unifying, high-priority vision . . . can bring business and other stakeholders together to achieve crucial goals.” If that still sounds like optimistic business-speak, well it is. But at least it is an optimism that is not solely focused on the next billion-dollar investment opportunity, and some business-speak that recognizes the fate of the planet truly does hang in the balance.

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Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

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Author Biography

Max Fraser is a junior fellow at the Dartmouth Society of Fellows.