Friday, October 19, 2018

Exxon is lobbying for a carbon tax. There is, obviously, a catch.

By Umair Irfan Oct 18, 2018

ExxonMobil, the largest investor-owned oil company in the world, announced last week that it will spend $1 million over two years to lobby for a US carbon tax.


But what’s gone largely unnoticed is that Exxon’s proposal comes with a massive catch: In exchange for a tax, the company wants immunity from all climate lawsuits in the future.

Cities across the United States are currently suing oil companies to make them pay for damages wrought by climate change, which could put companies like Exxon on the hook for billions of dollars in payouts.

The proposal Exxon wants to enact is one that would shield the company from lawsuits while also preventing further climate change regulations. All in all, it would grant oil companies the kind of immunity from litigation the gun industry currently enjoys.


A carbon tax could also work in favor of Exxon because the heaviest burdens of a tax would fall on the dirtiest fuels, namely coal. A price on carbon would force coal-fired generation off the market and leave a vacuum for alternatives, even higher-priced oil and gas.

Exxon itself has observed that cleaner fuels like natural gas and renewables are the largest growth sectors in energy.

So it makes sense that a powerful oil company wants to get ahead of any energy transitions.


The $40 per ton price on carbon might not move the needle much on fighting climate change or dealing with its consequences. “You really need a much stronger response to meet global goals,” said Paul Griffin, a distinguished professor of management at the University of California Davis, who studies greenhouse gas accounting.


There’s nothing inherent in a carbon tax that requires legal immunity for polluters. The Citizens’ Climate Lobby, the other group lobbying for a carbon price, has a fee and dividend model that doesn’t absolve oil companies of liability.


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