“A Rational Perspective”: Corporations Prepare for Carbon Limits
December 7, 2013
Go figure. Major corporations way ahead of the Tea Party base (I am shocked, shocked….).
Getting ready, and in some cases, actually imposing their own carbon limits – to make themselves more competitive.
The development is a striking departure from conservative orthodoxy and a reflection of growing divisions between the Republican Party and its business supporters.
A new report by the environmental data company CDP has found that at least 29 companies, some with close ties to Republicans, including ExxonMobil, Walmart and American Electric Power, are incorporating a price on carbon into their long-term financial plans.
Both supporters and opponents of action to fight global warming say the development is significant because businesses that chart a financial course to make money in a carbon-constrained future could be more inclined to support policies that address climate change.
But unlike the five big oil companies — ExxonMobil, ConocoPhillips, Chevron, BP and Shell, all major contributors to the Republican party — Koch Industries, a conglomerate that has played a major role in pushing Republicans away from action on climate change, is ramping up an already-aggressive campaign against climate policy — specifically against any tax or price on carbon. Owned by the billionaire brothers Charles and David Koch, the company includes oil refiners and the paper-goods company Georgia-Pacific.
The divide, between conservative groups that are fighting against government regulation and oil companies that are planning for it as a practical business decision, echoes a deeper rift in the party, as business-friendly establishment Republicans clash with the Tea Party.
Tom Carnac, North American president of CDP, said that the five big oil companies seemed to have determined that a carbon price was an inevitable part of their financial future.
“It’s climate change as a line item,” Mr. Carnac said. “They’re looking at it from a rational perspective, making a profit. It drives internal decision-making.”
This information comes from a recent report issued by the Carbon Disclosure Project, a nonprofit that specializes in organizing environmental information. The CDP report finds major oil companies, Wells Fargo, Wal-Mart, Walt Disney Company, automotive supplier Delphi, General Electric, energy companies like Duke, and even technology companies such as Google and Microsoft all including a future carbon price in their planning. The internal company projections range across industries, but generally it appears that the oil companies are forecasting the highest carbon prices in their internal planning, with BP pricing $40 per ton of carbon dioxide, Exxon Mobil $60, and Royal Dutch Shell $40.
At least three companies, Disney, Microsoft, and Shell, already implement their own internal carbon taxes. According to the Guardian, these companies have been enforcing the price within their own organizations in order to drive down their carbon footprint and increase efficiency. Shell has the highest price of the three, and so only uses the price for planning purposes; no money actually moves around. Nevertheless, Shell officials told the Guardian that they have declined pursuing carbon-intensive projects that a $40 per ton price makes unattractive. Disney, on the other hand, prices and taxes themselves. The funds raised from the tax deposited in their “climate solutions fund.” Currently, they price approximately $10-20 per ton, and have raised $35 million. Microsoft has the most aggressive goal, of seeking zero net emissions this year, and has the correspondingly lowest price, approximately $6-7 per ton.
While there are a variety of motivations for aggressive carbon pricing, the oil companies, such as Shell, are seeking to be prepared for increasing concern in industrial countries about the effect of carbon emissions on global climate change. As there are a variety of proposals circulating the globe, they are seeking a predictable program that will let them stay in business.
In the September/October issue of The American Conservative, R Street’s Andrew Moylan laid out the conservative case for a carbon tax. He looked at the manner in which conservatives consistently denied any problems in the health care industry, leaving the ball entirely in the Democratic court and allowing Obamacare to be passed in the first place. Moylan then laid out a plan for getting conservatives out ahead of the curve. By making the tax revenue he proposed being able to pursue other conservative policy goals, such as a more growth-friendly tax code, in exchange for addressing climate change.