Shell’s Motiva oil refinery in TX
(photo: Michael Stravato, NY Times)
When’s the last time you heard anything about a carbon tax as a viable means of curbing industrial greenhouse gas (GHG) emissions? It’s probably been awhile — and the subject of such as tax, long advocated by environmental advocates as one practical means to cutting down on GHGs by, is practically considered politically toxic by our national politicians. Even the much less effective strategy of cap-and-trade went nowhere back in 2009, the last chance President Obama and Congress had a realistic chance to craft real policy on energy production and climate change mitigation.
That’s why this NY Times business report by Coral Davenport this past Thursday is so significant. As Davenport notes:
More than two dozen of the nation’s biggest corporations, including the five major oil companies, are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming.
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.
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.”
Companies do not know what form a future carbon price would take. Congress could one day vote to directly tax emissions. President Obama is moving forward with plans to regulate carbon pollution from coal plants, with or without action from Congress — and states could carry out those regulations by taxing carbon polluters. At climate change talks at the United Nations, State Department negotiators have pledged that the United States will cut its carbon emissions 17 percent below 2005 levels by 2020, and 80 percent by 2050.
Mr. Carnac said: “Companies see that the trend is inevitable. What you see here is a hardening of that understanding.”
Other companies that are incorporating a carbon price into their strategic planning include Microsoft, General Electric, Walt Disney, ConAgra Foods, Wells Fargo, DuPont, Duke Energy, Google and Delta Air Lines.
Petcoke ash along the Calumet River in Chicago
One notable exception to this list of big companies is Koch Industries, a big player in the energy and fossil fuel extraction/refining business. The Koch Brothers are responsible the accumulation of thousands of tons of petcoke piled along the Calumet River on the South Side of Chicago — a waste by-product from tar sands oil refining happening in NW Indiana, and a significant environmental hazard for neighboring communities. According to the article:
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.