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Some of the World's Biggest Energy Companies Want a Price on Carbon Pollution

Six European oil and gas companies wrote to the UN, urging governments to impose a fee on carbon dioxide — But Exxon Mobil and Chevron didn't join them.
Photo by Oliver Berg/EPA

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Six large European energy companies wrote a letter to the United Nations on Friday saying they want to help meet the world's growing demand for energy while also aiding in international efforts to keep global temperature rise within 2 degrees Celsius (3.6 degrees Fahrenheit) of pre-industrial levels, the Financial Times reported.


Calling climate change "a critical challenge for our world," the companies — BG Group, BP, Eni, Shell, Statoil, and Total — urged the UN and governments around the world to introduce carbon pricing systems, which they said would stimulate investment in low-carbon technologies.

"For us to do more, we need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks," the companies wrote. "This would reduce uncertainty and help stimulate investments in the right low carbon technologies and the right resources at the right pace."

Not all of the world's energy majors agree.

The two largest US energy companies, Exxon Mobil and Chevron, said they're having no part of the push toward carbon pricing.

"We're not going to be disingenuous about it. We're not going to fake it, " Exxon Mobile CEO Rex Tillerson said, according to the FT.

And, Chevron's chief executive John Watson said: "We think we can make our own statements, and our statements speak for themselves."

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Mark Brownstein, the vice president of the climate and energy program at the Environmental Defense Fund, welcomed the call for a price on carbon pollution.

"When a major group of really global oil and gas companies comes together and say that they want to constructively engage in developing global climate policy, we welcome that," he told VICE News. "The real question is: Why are two global oil and gas companies choosing to stand apart? And to fold their arms?"


The European energy companies, he said, recognize a long term benefit that Exxon Mobil and Chevron seem intent to disregard.

"To the extent that they perceive regulatory risks to their business — [it's] better to engage to manage those risks than not. So there's no question that there is self-interest involved," he said. "I also think that anyone who is at all familiar with the climate science understands that the longer we put off making real changes, the more extreme the changes will need to be in the future."

Emissions policies across markets are not only fragmented, they're uncertain, Adele Morris, an economist at the Brookings Institute, told VICE News. And when companies are looking to make long-term investments, it stands to reason that they'd like some predictability.

"It only stands to reasons that if you're multinational, particularly a fossil fuel-intensive multinational," she said, "you'd like some harmonization of policies across your business activities."

As for Exxon Mobil, Morris said, they're probably seeking to maintain their own position on climate change, rather than delve into the muddy waters of molding a shared vision with their competitors.

"Their CEO has opined that a carbon tax makes a lot of sense," she said. "So if Exxon Mobile's going to come out with a policy statement, I think they'd want to say exactly what they think, and not have it watered down in some kind of collective wordsmithed document."


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On a global scale, a unified worldwide carbon pricing system just isn't in the cards, Robert Stavins, professor of business and development at the Harvard Kennedy School, told VICE News. Carbon-pricing agreements happen at a national level, subnational level (like in California), or the regional level, such as the European Union's cap and trade system, he pointed out. And it's "not unusual," he said, for energy companies to work with authorities to design those systems.

"If you're a company and you recognize that climate change is a real problem — or even if you thought it wasn't a real problem but you recognize that politicians think that it is — and that policy is going to be coming down the pike, then you would prefer to have a lower-cost approach than a higher-cost approach," he said. "And a carbon pricing mechanism is, generally speaking, going to be a lower-cost approach than our conventional regulatory approach."

Morris from the Brookings Institute agrees that achieving any sort of international agreement on carbon pricing remains a tough road to hoe.

"We might see the first steps in that direction fairly soon," said Morris. "But I think a global comprehensive system of any kind is a long way off, whether it's carbon pricing or anything else."

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Follow Rob Verger on Twitter: @robverger