Oil major ExxonMobil has come out in financial support of climate change in a very surprising and unconventional move.
There have been accusations levelled against Exxon for quite many years of the oil major of being insensitive to climate change. The company announced a donation of $1 million – to be paid over two years, to a group and has appealed to the Trump administration in the US to bring in tax legislation on carbon.
The donation was made to Americans for Carbon Dividends and Exxon is the first major American oil and gas company to come out in financial support climate change.
According to experts, this decision by Exxon was driven by its attempts to be seen as a supporter fighting for a solution for climate change and not as a cause of it.
“Exxon sees this as a way to be part of a real emissions reduction strategy — without significantly affecting their bottom line,” said Noah Kaufman, a research scholar at Columbia University’s Center on Global Energy Policy.
“It’s a tax on their product, but they could pass most of that tax along to consumers,” Kaufman said.
A carbon tax policy that was proposed by former Republican secretaries of state James Baker and George Schultz is being sip[ported by Americans for Carbon Dividends. the former Republican Senate majority leader, Trent Lott, is the chairman of the group.
It should be mentioned that the proposed Baker-Schultz carbon tax is meant to be “revenue-neutral,” essentially meaning that the legislation would not increase government revenues. Rather the amount that would be get collected from such a tax would be pumped into the to American households via a “carbon dividend” and a family of four could get as much as $2,000 a year.
It has been almost a decade that the company has extended support for a tax that would impose a “revenue-neutral” price on carbon for management of the “risk of climate change”, Exxon said in a statement.
Many believe that the least-bad response from Washington could by a carbon tax which is reflected in the financial support lent by Exxon for Americans for Carbon Dividends.
A shift away from coal can be triggered by a carbon tax, concluded a study by Columbia University released in July. But the study also mentioned that such an arrangement would only be able to have a “relatively small” impact on production and consumption of oil and natural gas. The study also mentioned that there is a possibility that during the first five years of imposition of such a tax, the price of natural gas could in fact increase and natural gas is a major component of Exxon’s businesses.
On the other hand, clarity in the manner in which the US would react to the issue of threats from climate change is being awaited by Exxon. A very grim picture was painted earlier in the week by a report by the United Nations on climate change which urged governments to make “rapid, far-reaching and unprecedented changes” so that very serious and disastrous outcome of climate change and global warming can be mitigated.
It supports policy that replaces the “patchwork of literally thousands of regulations, laws and mandates today” that effectively price carbon in a costly and inefficient way,” Exxon said.
“Exxon would benefit from regulatory certainty across the different jurisdictions,” said Katie Bays, an energy analyst at Height Capital Markets. “There is this undercurrent in the United States of progressivism that is uncomfortable with unlimited carbon emissions. And Exxon realizes this.”
(Adapted from Money.CNN.com)