(Bloomberg) A group of prominent Republicans and business leaders backing a tax on carbon dioxide were taking their case Wednesday to top White House aides, including chief economic adviser Gary Cohn.

The group, including former Treasury Secretaries Hank Paulson and James Baker, is pressing President Donald Trump to tax carbon dioxide in exchange for abolishing a slew of environmental regulations. They unveiled their plan with a press conference in Washington and an op-ed in the Wall Street Journal.

"We know we have an uphill slog to get Republicans interested in this," Baker said before heading to the White House. But "a conservative, free-market approach is a very Republican way of approaching the problem."

Other possible attendees at the meeting include the president’s daughter, Ivanka Trump, who weighed climate change policy during the campaign, and Vice President Mike Pence.

The Republican and business leaders, calling themselves the Climate Leadership Council, lend their stature to an approach for addressing climate change that mirrors an idea already advanced by Exxon Mobil Corp. Supporters say the tax is a conservative solution to climate change that replaces a regulatory regime with a free-market approach for addressing the greenhouse gas emissions.

Wal-Mart Founder

Paulson, who served as Treasury secretary under President George W. Bush, previously has advocated a carbon tax through his eponymous think tank, the Paulson Institute. Baker, who served as secretary of state and Treasury secretary under two Republican administrations, as well as former Secretary of State George Shultz, Wal-Mart Stores Inc. founder Rob Walton and Sequoia Capital Operations LLC partner Thomas Stephenson, among others. Economic advisers to former presidents George H.W. Bush and Ronald Reagan also are involved in the effort.

"Climate change poses an unacceptable risk to our climate and to our economy," Paulson said in a statement. "Putting a price on carbon is by far the most efficient and effective way to restrict emissions."

Baker himself conceded he remains "somewhat of a skeptic about the extent to which man is responsible for climate change" but the "risks are too great to ignore."

The plan faces strong political headwinds; both Trump and a majority of the House of Representatives have come out against a carbon tax in the past year. Trump also has pledged to do away with environmental regulations limiting emissions of carbon dioxide

But the idea of a carbon tax, long favored by economists as the most straightforward way to address climate change, could gain traction as part of a broad tax overhaul on Capitol Hill.

The blueprint involves a $40 tax on every metric ton of carbon dioxide released by burning fossil fuels, with the price climbing over time. To avoid an undue burden on the poor from the higher energy bills that would result, the projected $200 billion to $300 billion in annual revenue would be redistributed to households in the form of quarterly checks from the Social Security Administration. Families of four would see an average annual payout of $2,000 under the plan.

The proposal also calls for border adjustments that would act to hike the costs of products imported from countries that do not put a price on carbon.

Martin Feldstein, who headed former President Ronald Reagan’s Council of Economic Advisers, said the tax would be imposed at the point fossil fuels enter the economy, such as when oil leaves the refinery or coal leaves the mine. "The tax at the source is then built in to the prices of the products made from that raw material," Feldstein said.

Romney Tweet

Former Republican presidential candidate Mitt Romney described the proposal in a tweet as a "thought-provoking plan from highly respected conservatives to both strengthen the economy and confront climate risks."

The group envisions the carbon tax taking the place of an array of Obama-era environmental regulations that raise the cost of fossil fuels. The centerpiece of President Barack Obama’s climate agenda, the Clean Power Plan slashing emissions from electricity, would be immediately repealed, while others would be phased out over time. U.S. companies emitting carbon dioxide also could win liability protections under the deal.

The idea dovetails with an approach advocated by some large integrated oil companies, including Exxon Mobil, which has promoted a revenue-neutral carbon tax instead of a patchwork of environmental regulations. Secretary of State Rex Tillerson, Exxon’s former chief executive, previously acknowledged the climate is changing and described a carbon tax as the most efficient means of embedding its cost in economic decisions stretching from oil companies to consumers.

Oil Companies

BP Plc has said a well-constructed carbon tax or cap-and-trade system would encourage energy producers and consumers to pare emissions, while Royal Dutch Shell Plc Chairman Charles Holliday has called a carbon tax the most effective and practical way of driving that change.

It is unclear how the new plan will be received by Republicans in the White House and on Capitol Hill.

The Republican-led House last June approved a non-binding resolution condemning the idea of a carbon tax as "detrimental to American families and businesses." The measure, which passed 237-163, was designed to lock in lawmakers’ positions, making it harder for those who lodged a vote opposing a tax to support one later on.

Trump himself has come out against the idea, rejecting a carbon tax in responses to a survey by the American Energy Alliance last March. Many of the conservative advocates guiding Trump’s energy and environment policy also eschew the idea.

The approach also runs counter to Trump’s campaign promise to help bring back coal mining jobs. Because it generates more carbon dioxide emissions than natural gas and oil, coal would be the fossil fuel hardest hit by a tax on carbon.

Opponents fear that with the foundation laid now, lawmakers could seize on a carbon tax as a potent source of revenue to offset rate reductions during a future congressional debate on overhauling the tax code.

"This is not a climate proposal; it’s a tax proposal," said Thomas Pyle, head of the free-market advocacy group American Energy Alliance. "There’s no need to trade Obama’s climate regulations for a carbon tax. Donald Trump has already promised to undo them."

The idea of scuttling carbon dioxide regulations also is a non-starter with many environmentalists who could be critical to advancing the tax idea.

“We have a moral obligation to protect future generations from the growing dangers of climate change,” said Rhea Suh, president of the Natural Resources Defense Council. “Effective action means building on the progress we’re already making—not sacrificing those gains by weakening the laws Congress has already passed.”

But a carbon tax has gained traction in some circles. Republican Bob Inglis, a former representative from South Carolina, has pitched the tax as a free-market solution to climate change. Tesla Inc. founder Elon Musk also has pressed the Trump administration on the issue. It could benefit his electric vehicle business by driving more consumers away from gasoline-fueled automobiles.

The issue divides the oil industry; though Exxon Mobil is just one of several large integrated companies that favor a carbon tax, the idea is opposed by many independent producers that do not own pipeline and refining operations.

- Jennifer A. Dlouhy and Margaret Talev

Bloomberg News