Hugh Helferty and Margriet Kuijper published this article in The San Francisco Chronicle responding to ExxonMobil and Chevron’s annual shareholder meetings, where over two thirds of their respective shareholders rejected proposals to set medium-term and long-term targets for aligning their greenhouse gas emissions with the Paris Agreement on climate change. Hugh and Margriet propose a Carbon Takeback Obligation (CTBO) as a way to make Big Oil part of the solution to climate change.
From the article:
As things stand today, radical emission reductions are bad for business for Big Oil. If an oil company invests heavily in addressing greenhouse gas emissions, it will incur costs that other companies can choose to avoid, such as building and operating carbon dioxide capture, transport and storage facilities. As a result, it will be less profitable and its stock price will drop, while other companies that are not proactively addressing emissions are rewarded. Chevron said as much in its 2022 proxy statement response to the proposal to align its emissions with the Paris agreement: It serves oil and gas producers’ shareholders to protect their emissions-producing assets.
The way forward, then, is to change the rules of the game so that making progress toward cutting greenhouse gas emissions to as close to zero as possible, or net zero, becomes a critical success factor for good business. In other words, the industry needs new and stronger regulations.follows the fair and reasonable concept of extended producer responsibility. A carbon takeback obligation will ensure the companies that profit from the sale of oil and gas are held responsible for the impact of these products.
Read the full article here.