ExxonMobil is joining its peers Royal Dutch Shell, BP and Total in backing a U.S. carbon-tax-and-dividend plan put forward by former Republican leaders.
The plan is to charge $40 per ton of carbon dioxide emitted (about $0.36 per gallon of gasoline) and return that money to taxpayers as a monthly dividend. The carbon penalty will rise over time, squeezing demand for fossil fuels.
While the plan is backed by old-guard conservatives, the Trump administration isn't likely to budge on pricing carbon.
Most recently, Energy Secretary Rick Perry falsely claimed in an interview that carbon dioxide emissions are not a primary driver of climate change. He echoed EPA Administrator Scott Pruitt, who made similar comments in March.
That said, the Climate Leadership Council advances the conversation in notable ways.
It makes clear that conservatives do have something to say about climate change. And the group predicts that its market-driven approach would achieve almost twice as much carbon reduction as President Barack Obama’s policies would have by 2025.
Public support for carbon pricing from some of the largest multinational energy companies weakens the Trump administration argument that acting against climate change is bad for the economy.
The New York Times elaborates on why this might be appealing for these corporate titans: “The oil giants could simply pass the cost of new taxes on to the customers. And to protect American companies, the plan would introduce so-called border adjustments, intended to increase the cost of goods coming from nations that do not have a similar carbon tax.”
The proposal would also shield companies from litigation about their contribution to climate change -- something Exxon may find appealing.
Republican former Secretaries of State James Baker and George Shultz kicked off the plan, and have since been joined by more liberal public figures like Lawrence Summers, who was President Bill Clinton’s Treasury secretary, and former New York Mayor Michael Bloomberg.
Any group that gets the Nature Conservancy and Exxon on the same page deserves a pat on the back.
This isn't the first time some of these companies have backed climate action. In April, the chairman of Royal Dutch Shell participated in the Energy Transitions Commission report that outlined a pathway to keeping global temperature rise below 2 degrees Celsius. That plan called for wind and solar power to rise to 45 percent of the global power mix by 2040, with non-intermittent, zero-carbon sources accounting for 35 percent and fossil fuels reduced to 20 percent.
Even the corporate members of President Donald Trump's business advisory council are investing billions of dollars in renewable energy and reduction, as GTM has reported.