Published on 19 October 2018

CSR

ExxonMobil pledges $1 million to campaign a carbon tax

ExxonMobil pledged on Tuesday to donate $1 million to support efforts to adopt a carbon tax in the United States; a surprising first for an oil giant accused for years of having financed climate-skeptic studies.

Carbon Tax is now supported by ExxonMobil, which can't be expected few years ago.
istock

$1 million will be paid out over a two-year period to campaign for a carbon tax in the United States.  This is the promise of American oil exporter ExxonMobil to mark its commitment in the fight against climate change. The announcement may come as a surprise at first, since the oil giant is known to have funded climate-skeptic lobbies large sums of money (roughly $16 million between 1998 and 2005). All this occurred despite being knowledgeable of the consequences of climate change since the early 1980s.

When examined more closely, the decision to campaign for a carbon tax is not so surprising.  It remains a first step in response to increasing pressure that the group, and all oil companies, face from stakeholders (NGOs and investors) who are asking them to better account for the impacts of climate change in the business strategies.

Just last year, after being pushed toward greater transparency by shareholders, ExxonMobil joined fellow oil companies Shell, BP and Total, the Climate Leadership Council, and a coalition of NGOs, personalities and companies all in favour of the carbon tax. These actors went as far as to illustrate their commitment in an advertisement that was published in American media.

$40 per tonne of CO2

The benefactor of such funds is Americans For Carbon Dividends, which is co-led by two former senators, Republican Trent Lott and Democrat John Breaux.  The group wants Congress to adopt a carbon tax to fight climate change. The “carbon divided tax” supported by ExxonMobil would be set at $40 per tonne of CO² and would gradually increase. More specifically, the price per gallon of oil (3.78 liters), would increase by 36 cents and would bring the government $200 billion to redistribute to households at an average of $2,000 per family of four per year.

This solution, which was intended to replace the measures previously put in place by the Obama administration (such as an emissions cap for coal-fired power plants) would make it possible to reduce American emissions despite Donald Trump’s withdrawal of the United States from the Paris Agreement.  Nevertheless, one of the provisions accompanying the proposition is to protect polluting companies from prosecution.

Bear in mind that $1 million represents the revenue earned by ExxonMobil every two minutes in 2017, according to Bloomberg calculations.  In 2017 alone, the group spent $11.4 million on lobbying activities.

Béatrice Héraud with AFP


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