Exxon’s New CEO Backs Carbon Tax Too

Environment + Energy Leader
February 24, 2017
By Ken Silverstein

Will it have an effect on national policy? Or is it just the opinion of the new chief executive of Exxon Mobil, Darren Woods? Since he replaced Rex Tillerson — now the Secretary of State — Woods said he would favor a revenue-neutral carbon tax.

That “would promote greater energy efficiency and the use of today’s lower-carbon options, avoid further burdening the economy, and also provide incentives for markets to develop additional low-carbon energy solutions for the future,” he writes.

Tillerson had the same views and had testified before the US Senate that the country ought to keep its seat at the table with respect to the Paris climate accord that tries to keep global temperatures from rising more than 2 degrees Celsius by mid century.

Exxon has said that a carbon tax ought to offset other corporate taxes. But competing versions — including one from the elder statesmen of the Republican Party — have said that a carbon tax ought to be implemented in exchange for less regulation, including the dismissal of the Clean Power Plan. Still others have said that the revenues from a carbon tax should be targeted toward new technologies that could bring down carbon emissions.

The latest such effort is coming from the Climate Leadership Council, which has released a plan to begin taxing carbon at $40 per ton. “The Conservative Case for Carbon Dividends” lays out a scenario where that price would rise each year and where carbon emissions would fall.

The group, which includes former Secretary of State James Baker, former Secretary of State George Shultz and former secretary of the Treasury Henry Paulson, says that $194 billion in revenues would be generated in year one — a figure that it expects to increase to be $250 billion a decade later. That money would then be returned to the American people in the form of a “dividend.” 

Exxon is not the only oil company to favor such a tax. There’s also BP, StatOil and Royal Dutch Shell. They all have heavy investments in natural gas, which is replacing coal as the leading form of electric generation. It releases roughly half the carbon emissions as does coal when burned.

Exxon spent $7 billion on low-emission energy research and projects during the past 15 years, he said in the post on Exxon’s Energy Factor blog, as reported by Bloomberg.

There’s still the question, though, of just how much weight the oil companies will put behind these positions. It is becoming less likely that the Trump administration will withdraw from the Paris accords given that the president’s daughter is pushing him to stay involved. That would give Tillerson, Woods and the others an opportunity to help shape these policies that could bloom once the Trumpians leave office in four-to-eight years.