Exxon Mobil pledges $1 million to campaign to promote carbon tax

Key Points
  • Exxon Mobil will donate $1 million to a group lobbying to place a tax on planet-warming carbon dioxide emissions.
  • The group, Americans for Carbon Dividends, is promoting a conservative, free-market plan to reduce carbon emissions developed by James Baker III and George Shultz.
  • The plan would provide regulatory certainty to energy companies and includes a proposal to limit the EPA's authority to regulate carbon emissions.
An Exxon Mobil station in Cincinnati
Luke Sharrett | Bloomberg | Getty Images

Exxon Mobil will donate $1 million to a campaign promoting a tax to curb emissions of planet-warming carbon dioxide to U.S. lawmakers and the American public.

With the commitment, the world's largest publicly traded oil company is throwing its financial support behind Americans for Carbon Dividends, an organization tasked with lobbying for a carbon tax plan developed by Republican statesmen James Baker III and George Shultz.

Exxon's support comes at a time when U.S. lawmakers remain at an impasse over putting a price on greenhouse gas emissions, with many Republicans opposed to a carbon tax or cap-and-trade system. The policy vacuum at the national level threatens to leave energy companies grappling with a patchwork of state and regional policies.

A single, national tax policy would provide regulatory certainty to the energy industry, and the Baker-Shultz plan in particular seeks to limit the Environmental Protection Agency's rule-making authority.

The contribution also marks Exxon's latest measure to tackle the challenge of global warming, following a period of intense scrutiny of the company's public record of downplaying the risks posed by climate change.

Climate change has contributed to recent string of natural disasters: Expert
Climate change has contributed to recent string of natural disasters: Expert

Exxon is the first oil company to fund Americans for Carbon Dividends and joins the group's three initial contributors: Chicago-based utility Exelon, solar power company FirstSolar and the American Wind Energy Association. Exxon's $1 million commitment brings the group's total funding to more than $3 million.

"Exxon's contribution today is a very significant step in the promotion of the Baker-Shultz carbon dividend plan," said Greg Bertelson, senior vice president at the Climate Leadership Council.

Exxon did not respond to a request for comment.

Exxon — along with fellow oil majors BP, Royal Dutch Shell and Total — is a founding member of the Climate Leadership Council, a group of corporations, conservation groups and prominent individuals tasked with hammering out a more detailed version of the four-point Baker-Schultz policy.

Americans for Carbon Dividends was formed in June to promote that plan, which is billed as a conservative, free-market approach to combating the human-caused carbon dioxide emissions fueling climate change. The burning of fossil fuels is a major contributor to those emissions.

The plan advocates for placing a fee on carbon emitted by companies, which would start at $40 per ton and rise gradually. Revenues from the tax would be returned to Americans in the form of regular, automatic dividend payments.

The policy would also seek to level the international playing field with countries that do not tax carbon emissions by offering a rebate on American imports going into those nations and placing a fee on their imports into the United States.

Climate change threat
Climate change threat

The final pillar of the plan calls for rolling back the Environmental Protection Agency's authority to regulate carbon emissions and repealing rules like President Barack Obama's Clean Power Plan, which the Trump administration is already in the process of dismantling.

Last month, Exxon and fellow U.S. energy companies Chevron and Occidental Petroleum joined the Oil and Gas Climate Initiative, a group formed by their international peers in 2014 to reduce greenhouse gas emissions and fund technologies to reduce carbon pollution.

Earlier this year, Exxon announced a plan to reduce its methane emissions by 15 percent and reduce flaring of the potent greenhouse gas by 25 percent by 2020. Methane is the primary component of natural gas.

Exxon has spent the last three years fighting allegations that it deceived the public about the dangers associated with climate change for decades, despite its knowledge of the scope of global warming and the role of fossil fuel consumption on rising temperatures. The so-called #ExxonKnew campaign started with a series of investigative reports in 2015 and has spurred several lawsuits seeking to hold Exxon accountable for the cost of adapting to climate change and for misleading investors.

Exxon claims the #ExxonKnew movement is "an orchestrated campaign that seeks to delegitimize ExxonMobil and misinterpret our climate change position and research."