American Petroleum Institute endorses carbon pricing as industry faces pressure on curbing emissions

An Exxon Mobil fuel station in Chicago.

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The oil and fuel industry’s largest commerce group Thursday endorsed a worth on planet-warming carbon emissions, marking a significant shift after it lengthy resisted regulatory motion on local weather change.

The American Petroleum Institute’s transfer comes as President Joe Biden prepares to unveil a sweeping infrastructure proposal centered on curbing greenhouse fuel emissions and transitioning to scrub power.

In a digital assembly with White House officers Monday, industry leaders from corporations such as ExxonMobil, BP, Chevron and ConocoPhillips, together with API, additionally signaled assist for market-based carbon pricing.

The endorsement represents a significant shift within the industry’s technique on the problem of local weather change and a recognition of the brand new administration’s regulation measures following former President Donald Trump‘s deregulation efforts geared toward serving to U.S. producers.

For occasion, Biden in January issued an govt order to halt new oil and fuel leasing on federal lands, a transfer that confronted resistance from producers and a slew of Republican-led states.

Vice President Kamala Harris (2-L) and Special Presidential Envoy for Climate John Kerry (L) watch as US President Joe Biden indicators govt orders after talking on tackling local weather change, creating jobs, and restoring scientific integrity within the State Dining Room of the White House in Washington, DC on January 27, 2021.

Mandel Ngan | AFP | Getty Images

The API’s endorsement additionally indicators that the industry — which emits a substantial amount of methane, a greenhouse fuel that’s 84 instances stronger than carbon dioxide — would favor a quantifiable value related to local weather coverage slightly than ongoing rules.

The industry’s plan got here collectively over the past 18 months and consists of advocating for federal funding for superior applied sciences, additional mitigating emissions from operations, advancing cleaner fuels and growing transparency by increasing using ESG reporting steerage.

The API was a staunch opponent of a carbon tax when Congress final debated the problem almost a decade in the past.

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“The world has changed since Congress has had this debate,” mentioned API President and CEO Mike Sommers.

The industry has confronted rising pressure by buyers to measure its contribution to local weather change. And the Biden administration has vowed to place the U.S. on a path towards net-zero emissions by 2050.

While Democrats are nonetheless working on the small print of the upcoming infrastructure proposal, it is anticipated to value between $2 trillion and $three trillion and embrace $400 billion in funding for clear power and innovation.

A carbon tax may additionally produce funding to assist pay for the infrastructure plan. The Tax Foundation estimates {that a} tax on carbon emissions at a price of $50 per metric ton, with an annual progress price of 5%, may generate $1.87 trillion in further federal income over 10 years.

The API mentioned it could not assist a tax that might fund different applications.

“To the extent that a new carbon tax would be put into place to fund X program … that’s not what we’re talking about, and that’s not what we would support,” Sommers mentioned. He added that the industry envisions adjustments to present rules following a carbon worth coverage endorsement.

Some environmental teams see it as an industry ploy to supply an answer to the carbon downside and keep engaged within the debate.

David Doniger, local weather and clear power program director on the National Resources Defense Council, mentioned the transfer reminds him of the maxim that it is higher to be on the desk than on the menu.

“This is an effort to get to the table, rather than be overlooked and run roughshod, but it’s not very definite yet. I don’t know what they’re offering to really support,” Doniger mentioned.

The NRDC additionally mentioned it opposes eradicating robust air pollution or effectivity rules in trade for a worth on carbon.

“That’s like the old Wimpy with the hamburgers: I’ll gladly have a hamburger today and pay you back next Tuesday,” Doniger mentioned. “We’re not interested in trading one or more of the existing tools.”

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