Top American companies are in support of drastic cuts in greenhouse gas emissions by the government, but accompanying tax implications still remain prime subject of interests among analysts that weigh possibility of deriving economic benefits from high green energy costs.
Opponents of the new emission cut commitments argue that it would punish American producers with increased energy costs and allow Russia and China increase greenhouse gas emissions with cheaper production energy.
Proponents insist that new emission cuts targets would, on the contrary, create millions of jobs and boost economic activity.
Some 300 businesses including Google, McDonalds and Walmart signed letters urging the administration of President Biden to significantly cut the country’s green house gas emissions in line with the prevailing Paris Agreement on climate change.
Other signatories to the letters organized by Ceres, a nonprofit organization on sustainability, include Target, Verizon and Altria Group, the parent company of the tobacco giant Philip Morris USA and Philip Morris International. Others include electric utilities like Exelon and Pacific Gas & Electric.
The corporate urge on the administration to align with global campaign on energy demand shift would have significant implication of cost of production and global price competition of other industrialized nations that run on less efficient and cheaper fossil energy.
Besides, the plan by the US government to aggressively drive cleaner energy and emission reduction carries huge tax burden on corporate businesses, including the firms that signed letters for emission cuts.
The letter from some of the nation’s largest companies required the government to set a 2030 Paris Agreement goal that entails a 50 percent cuts in the nation’s emission of carbon dioxide, methane and other substances below 2005 levels.
The volumes of green house gas that would be reined in by the new targets has not been determined.
The corporate emissions goal falls in line with demands by major environmental groups which were rejected by former President Donald Trump who pulled the United States out of the Paris Agreement on the grounds of job creation and business viability.
President Biden said the United States would announce fresh targets for the Paris Agreement with target for a 50 percent reduction in emissions.
However, the targets come with higher tax bills on corporations in the United States, as the government’s plan for curbing climate change would raise corporate tax rates, a move sure to raise objections among at least some of the climate-conscious corporations.
The new tax rates, according to Ceres, would finance Biden administration’s $2.0 trillion long term infrastructure investment. It called for clean electricity standard and new regulations on the utility sector, automobile makers and oil and gas industries.
Under the Paris Agreement, nearly 200 nations set their own voluntary targets for cutting emissions by 2025, including major developing nations like China and India. The rules of the accord do not punish countries for failing to meet the goals, but do require countries to set them. The United States is currently less than halfway to its original goal.