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Oil Companies on Carbon Pricing

Oil companies and other majors corporations realize that putting a price on carbon is both inevitable and the best way to move toward low-carbon energy.

Large Companies Prepared to Pay Price on Carbon
5 Dec 2013. New York Times.
More than two dozen of the nation’s biggest corporations, including the five major oil companies, are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming.…

Other companies that are incorporating a carbon price into their strategic planning include Microsoft, General Electric, Walt Disney, ConAgra Foods, Wells Fargo, DuPont, Duke Energy, Google and Delta Air Lines....

Mainstream economists have long agreed that putting a price on carbon pollution is the most effective way to fight global warming. The idea is fairly simple: if industry must pay to spew the carbon pollution that scientists say is the chief cause of global warming, the costs will be passed on to consumers in higher prices for gasoline and electricity. Those high prices are expected to drive the market away from fossil fuels like oil and coal, and toward low-carbon renewable sources of energy....

Exxon Mobil now plans its financial future with the expectation that eventually carbon pollution will be priced at about $60 a ton,

Report: Big U.S. Businesses Ready For A Carbon Price
11 Dec 2013. Michael Crancer. Forbes.
+ From report by Carbon Disclosure Project (CDP).

[M]any major publicly traded companies operating or based in the United States have integrated an “internal carbon price” as a core element in their ongoing business strategies. Such carbon pricing has become standard operating practice in business planning, in that the companies acknowledge the process of ongoing climate change—including extreme and unpredictable weather events—as a key relevant business factor for which they wish to be prepared.… Preparedness includes use of an internal carbon price, based on the business assumption that addressing climate change will be both a business cost and possible business opportunity, regardless of the regulatory environment.”

Carbon Policy

We also believe that putting a price on carbon – one that treats all carbon equally, whether it comes out of a smokestack or a car exhaust – will make energy efficiency and conservation more attractive to businesses and individuals and lower-carbon energy sources more cost competitive. A global carbon price should be the long-term goal, but regional and national approaches are a good first step, provided temporary financial relief is given to sectors that are exposed to international competition.

Internal carbon price
We require larger projects, and those for which emissions costs would be a material part of the project, to apply a standard carbon cost to the projected GHG emissions over the life of the project. The standard cost is based on our estimate of the carbon price that might realistically be expected in particular parts of the world. In industrialized countries, this standard cost assumption is currently $40 per tonne of CO2 equivalent. We use this cost as a basis for assessing the economic value of the investment and as one consideration in optimizing the way the project is engineered with respect to emissions.

Climate Change Public Policy
+ Recognize that climate change is a global issue which requires global solutions – economy-wide governmental GHG management frameworks should be linked to binding international agreements comprising the major GHG contributors.
+ Utilize market-based mechanisms rather than technology mandates.
+ Create a level competitive playing field among energy sources and between countries.
+ Avoid overlapping or duplicating existing energy and climate change programs.
+ Provide long-term certainty for investment decisions.
+ Foster resiliency to the impacts of a changing climate.

ExxonMobil’s views and principles on policies to manage long-term risks from climate change
On carbon tax: “If policymakers do move to impose a cost on carbon, we believe that a carbon tax would be a more effective policy option to reduce greenhouse-gas emissions than alternatives such as cap-and-trade. And to ensure revenues raised from such a tax are indeed directed to investment, and to assist those on lower incomes who spend a higher proportion of their income on energy, a carbon tax should be offset by tax reductions in other areas to become revenue neutral for government. It is rare that a business lends its support to new taxes. But in this case, given the risk-management challenges we face and the policy alternatives under consideration, it is our judgment that a carbon tax is a preferred course of public policy action versus cap and trade approaches.”

Climate Change

“To manage CO2, governments and industry must work together. Government action is needed and we support an international framework that puts a price on CO2...”.

by Barnhill, David L last modified Jun 02, 2014 03:09 PM
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