A group of Europe’s largest oil companies on Monday announced a plan to fight global warming by charging fossil energy businesses a fee for emitting carbon dioxide.
The companies include Royal Dutch Shell, BP, Eni, Total, the BG Group and Statoil, which announced their plan in an open letter to the United Nations published in Monday’s Financial Times newspaper.
The companies acknowledge the challenge that adding the cost would pose for fossil energy industries, but say they are “confident that we can build on our trajectory of innovation to meet the challenges of the future.”
They want the U.N. to help them develop a global strategy that would institute the carbon fee.
The letter asks that U.N. policymakers and member states endorse a unified policy that would help businesses make key investment decisions. Advocates of setting a carbon price, or tax, believe it would be more efficient than using regulations to drive reductions.
The letter is being sent ahead of a major U.N. conference on climate change at the end of the year, where the U.S. and other countries will seek to hash out a global agreement on emission reductions. Many scientists believe carbon dioxide emissions, largely through burning fossil fuels, is driving manmade climate change.
The letter comes as an array of groups say that strict new regulations, like those proposed by the Obama administration for power plants, won’t do enough to address emission reductions in the long run and that a “carbon tax” would be needed to move investment in new low-carbon technologies.
A report released last week by the environmental group World Resources Institute says the Environmental Protection Agency’s proposed power plant rules should be more stringent to drive even greater emission cuts. The group also says Congress will need to enact a carbon tax to meet emission reduction goals beyond 2025.
Nevertheless, U.S.-based companies Exxon Mobil and Chevron have refused to join the European companies’ push for a carbon fee. Exxon CEO Rex Tillerson said last week that he would not “fake it” on climate change by taking a position that the company does not endorse.
The six oil companies in the letter said they are “already exposed to a price on carbon emissions by participating in existing carbon markets” in the European Union and elsewhere. They also have applied company-wide “carbon prices in our own businesses to test whether investments will be viable in a world where carbon has a higher price.”
The companies are already seeking to reduce carbon emissions through the use of greater energy efficiency, renewable energy and carbon capture technologies that removes carbon dioxide from the burning of fossil fuels and stores it underground.
The companies add that by endorsing a price on emissions, global leaders would encourage more efficient use of energy, which in turn would reduce “demand for the most carbon intensive fossil fuels.”
