The Economist explains why Exxon Mobil would support a carbon tax

By H.T., The Economist.

“I don't think putting a price on carbon is necessarily the answer,” John Watson, the boss of Chevron, an American oil company, said in remarks reported in the Financial Times in June. “I've never had a customer come to me and ask to pay a higher price for oil, gas and other products.” It might seem safe to assume that all oil-and-gas businesses would share his dismissive view. After all, a levy on carbon dioxide, whether via a cap-and-trade system along the lines of the EU's Emissions Trading System, or via a carbon tax, should be about as welcome to their industry as Christmas is to turkeys. Yet since 2007 Exxon Mobil, the world's biggest publicly listed oil company, is proposing a carbon tax, and has already put a shadow price on each tonne of CO2 it emits. And in the lead-up to the climate-change summit that starts in Paris at the end of this month, six European oil majors have advocated carbon-pricing systems. Are they serious? If so, why this strange burst of altruism?

Cynics start from the premise that this is a public-relations exercise, rather than a commitment to wean the world off fossil fuels—which still account for 87% of the global energy mix. They note that the oil majors which are supportive of a carbon price put the onus on governments to implement it, knowing full well that higher petrol prices look like vote-losers in many parts of the world. And they point out that the industry is divided. State-run oil companies are as sceptical as Mr Watson. And like Chevron, Exxon Mobil declined to join the six European energy companies in signing their letter to the UN.

Read more...