Initially this headline probably appears absurd to many readers; however, major oil companies have indeed written an open letter to national governments urging them to implement a global carbon pricing scheme. This probably comes as a shock to readers on both sides of the political spectrum. Those who are left of centre have long preached that energy companies are morally bankrupt entities bent on profit over planet at all costs. Similarly, those on the right have long derided any carbon pricing efforts as fantasy that flies in the face of common sense, and one that would torpedo the economy.
Contrary to both of these views, the open letter from BP, Shell, Total, Statoil, Eni and BG Group stated that;
“We need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part. We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace.”
Unsurprisingly, individuals on both sides of the political spectrum have had their preconceptions rattled. Energy companies are not devoid of farsightedness or ecological concern; indeed many “oil” companies are heavily investing in alternative energy production – it only makes sense from a business perspective to diversify your production / revenue sources. Emerging clean energy markets are lucrative and global green energy generation is experiencing significant year-on-year gains. Moreover, sustained public pressure on, and awareness of climate change, has reached levels that companies seen as unrepentant polluters are in a difficult situation.
Conservatives in Canada and Republicans in the United States have long used anti-carbon pricing arguments, claiming that they are simply voicing the expert opinions of business and industry. These people hold up major oil companies as key examples of important firms that would debunk and block any political effort to legislate on carbon. In both Canada and the United States, federal refusal to act has led various provincial and state governments to adopt carbon pricing schemes: often a hybrid model incorporating a carbon tax and a cap and trade system. In April Ontario agreed to join with Quebec and California to create an inter-provincial/state carbon market.
Increased interest in reducing emissions by energy companies should be warmly welcomed, and efforts made to capitalize on this willingness, by including the energy sector in discussions to create global carbon frameworks. There has been a lack of political will to create a comprehensive carbon pricing system; in large part because governments have feared economic fallout and the ire of industry. Consequently, a proactive energy sector is invaluable to convincing governments to push forward in UN climate talks scheduled for December.