Dive Brief:

• A new group called Americans for Carbon Dividends, led by a bipartisan duo of former U.S. senators, will advocate for a federal carbon tax that would result in monthly dividends returned to all Americans, in an attempt to develop a pro-growth strategy to address climate change.
• Former Sens. Trent Lott, R-Miss., and John Breaux, D-La., are leading the effort according to Axios. The group is backed by Exelon, the American Wind Energy Association and First Solar. 
• Last year, major oil and gas companies announced support for a carbon tax, but it is still a tough sell. Washington state has twice rejected a proposal, and voters and lawmakers there are likely more amenable to environmental solutions than Republicans in the U.S. Congress.

Dive Insight:

The carbon dividend proposal already has strong financial backing. Exelon contributed $1 million, and others who chose to remain anonymous have given as well, Axios reports.

Exelon has supported other carbon tax efforts, including on state levels, that would help keep nuclear plants viable. As a leading nuclear generator in the U.S., the company said in 2014 that a carbon tax of more than $10/ton in Illinois would keep carbon-free nuclear plants running.

Ted Halstead, the founder of the Climate Leadership Council, gave a TED Talk last year outlining the recent proposal. Broadly, it envisions a $40/ton carbon tax on fossil fuels that would be returned in full to Americans in the form of dividends. The approach aims to eliminate psychological and partisan barriers to enacting such an idea.

The flip side of the carbon tax would be the elimination of carbon regulations — which is how the group pushes it as a pro-business and growth strategy. As Axios puts it, "the message Lott and others will be sending won’t have the word 'tax' in it." The former lawmaker told the news outlet that he won't be pushing the science and urgency of climate change heavily in his pitch.

A $40/ton carbon tax would drive up gasoline costs more than $0.30/gallon.

For perspective, the tax rejected by Washington state this year would have been set initially at $20/ton, rising annually by an inflation-adjusted 3.5%. The tax would have brought in more than $3 billion to the state over the next four years, supporters estimated.

Washington voters first rejected a carbon tax at the polls in 2016; it stalled again this year when it lacked votes in the Democrat-controlled state Senate.