Treasury official: Administration open to carbon tax if GOP takes lead

A senior Treasury Department official said Tuesday that the Obama administration could back carbon taxes as part of a wider fiscal reform deal, but with a big caveat: Republicans would have to show that they want to play ball.

“If this is going to be an issue that is part of discussions, there will have to be some interest shown by Republicans if we are going to make any progress,” Gilbert E. Metcalf, the Treasury Department’s deputy assistant secretary for environment and energy, told reporters.

“The administration has not proposed a carbon tax nor is it planning to, but if there is, as part of fiscal reform discussions, there are a lot of pieces on the table, and if Republicans see this as a viable piece, then it could be part of the mix,” he said.

A White House official said last week that the administration is not going to propose a carbon tax.

Metcalf spoke to reporters after remarks at a forum on carbon taxes hosted by the conservative American Enterprise Institute and co-sponsored with the Brookings Institution, International Monetary Fund and Resources for the Future. He made similar remarks to the entire conference.

“The president believes that any legislative effort to address the risk posed by climate change must have bipartisan support,” he said, noting that Republicans must show “what it is they are willing to discuss.”

His comments echo statements made several weeks ago by Joseph Aldy, a former White House energy aide who appeared in a debate as a surrogate for the Obama campaign.

The idea of taxing greenhouse gas emissions from petroleum and coal has won new focus in recent weeks as a way to address climate change, and perhaps raise revenues in fiscal policy negotiations.

But the idea faces huge political hurdles and has little support among Republicans.

However, former Rep. Bob Inglis (R-S.C.) is seeking to build support for taxing carbon emissions while reducing other rates.

—This post was updated at 2:12 p.m.