Major Fossil Fuel Companies See Need for Climate Action
Major fossil fuel companies have spent much energy to determine whether the fuels they sell actually cause climate change. The bottom line? They do and, perhaps surprisingly, many of them own up to it and are calling for federal action.
The fossil fuel finding offers another firm reason to move forward to safeguard our future. Even if we’re uncertain of the potential worst effects, we need an insurance policy.
There is growing concern among these major companies over climate change and a call for equitable federal action.
Shell minces no words: “CO2 emissions must be reduced to avoid serious climate change.” U.S. power provider NRG says, “Global warming is one of the most significant challenges facing humankind.” Major coal user, American Electric Power, also recognizes the problem.
Then there’s ExxonMobil, which according to DeSmogBlog pumped more than $23 million into climate denial groups, including Heartland Institute, from 1998 until a few years ago. ExxonMobil now reports “Rising greenhouse gas emissions (GHG) pose significant risks to society and ecosystems.”
Furthermore, BP cites the Intergovernmental Panel on Climate Change reports as evidence of climate change. ConocoPhillips says burning fossil fuels can lead to climate disruption. Chevron, Hess, BHP Billiton and Total share these concerns.
Most of these companies propose pragmatic policies to combat climate change.
For instance, BP proposes an economywide price on carbon that treats all carbon equally and makes lower-carbon energy sources more cost competitive. Shell wants a strong, stable price for GHG emissions within a comprehensive policy framework. Hess wants all affected parties treated equitably.
ExxonMobil wants a uniform, predictable carbon price and the market to drive selection of solutions. It wants to promote global participation, minimize complexity, and maximize transparency. It promotes a revenue-neutral carbon tax.
BHP Billiton supports broad, efficient, progressively introduced, market-based mechanisms. ConocoPhillips wants market-based mechanisms, investment certainty, and a level playing field among energy sources and countries.
Here’s a road map to consider that is consistent with the warnings and policy preferences of these companies. First, stop doing harm. Where practical, stop investing in fossil fuels and infrastructure that locks in additional GHG emissions for 50 years or more. Then address new energy needs using renewables while stretching our energy budget through efficiencies. Engage in massive energy research to ensure that storage systems, already entering the market, advance quickly, making large amounts of renewable energy available off-hours. Spread the use of geothermal and hydropower to address baseload demands. Finally, extend and fortify electrical grids to connect remote major renewable sources to markets and better integrate distributed energy services.
To make any difference, we must effectively price carbon emissions. A steadily rising, revenue-neutral carbon pollution fee is a most promising overarching policy. Returning all fees to all households would effectively create a progressive fee structure, because two-thirds of households would gain or break even. The dividend protects the least well off in society from harsh impacts and would be stimulative to the economy. Border tariffs would protect our businesses from competition that does not have a fee and therefore prompt other nations to adopt our fee. Consumers would have incentives to make better decisions about energy use, further stimulating innovation.The International Monetary Fund also has called for a price on carbon: Energy prices around the world “are set at levels that do not reflect environmental damage, notably global warming.” Two bills have recently been introduced that move partly in the right direction: Rep. Chris Van Hollen (D-MA) (permit for fossil fuels; all returned to households) and Rep. Jim McDermott (D–WA) (permits; 75 percent returned to households; 25 percent to deficit reduction).
The fee and dividend improves on those bills. For several years Citizens Climate Lobby (CCL) has advocated this federal policy. CCL commissioned Regional Economic Modeling, Inc., a highly reputed economic policy forecasting company, to assess the impacts of such a policy. The results are attention grabbing. With $10 added yearly to a carbon fee and 100 percent rebated to households, by the 20th year there would be 2.8 million new jobs, $1.3 trillion boost to GDP, a quarter million lives extended (cleaner air), and 52 percent reduction in carbon dioxide.
Who can’t like an approach where economy and environment both win? The big question is: Will this be enough to make Congress finally act?
Reaves, a San Diego business and environmental lawyer and mediator, was a founding director of the Citizens Climate Lobby. Hering, a retired Navy rear admiral, is executive director of the California Center for Sustainable Energy.