Congress should consider imposing a “carbon tax” to curb pollution and use the proceeds to reduce U.S. payroll taxes, FedEx Corp. ( FDX) Chairman and Chief Executive Fred Smithsaid Monday.

A carbon tax would be a much more efficient way to reduce pollution than a cap-and-trade system that would cap the emission of air pollutants and permit trading in pollution credits by firms that stay below the cap, Smith said in response to questions after a speech to the National Press Club.

Smith said a cap-and-trade approach can be gamed and hasn’t worked well in Europe, and that he favors alternatives such as a carbon tax, provided most of the revenue is used to lower payroll taxes. Proposals for a new tax based on vehicle miles traveled also are “ill-advised,” in his view, because they would unfairly penalize those with long commutes without getting at the heart of the problem.

Smith founded the Memphis-based shipping company in 1971 and now serves on the Energy Security Leadership Council, which issued recommendations last year to reduce U.S. dependence on imported energy.

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