Oil majors suggest carbon pricing to tackle climate change

A group of the world’s largest oil companies have sent a letter to the United Nations Framework Convention on Climate Change (UNFCCC) suggesting their preferred action to tackle emissions – a global carbon price.

Echoing calls made earlier this year at a speech at the Energy Institute’s IP Week by Shell CEO Ben van Beurden, the letter calls upon the UNFCCC to introduce carbon pricing and create clear, stable, ambitious policy frameworks that could eventually connect national carbon pricing systems. This would reduce uncertainty and encourage the most cost-effective ways of reducing carbon emissions widely, say the companies.

The letter, which also says that the signatories are willing to play their part and contribute solutions to climate change, comes from major oil and gas companies BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total. While some commentators welcomed the move, others suggested that it is a means of setting up a system that will take time to implement, have limited effect and that will act to initially penalise coal.

A separate letter to the media released at the same time praises the role that natural gas can play in reducing emissions.

Some oil major companies are missing from the list of authors; notably Exxon Mobil, which has refused to seriously enter the debate on climate change.

Other commentators have pointed out that the letter’s sentiment is at odds with Shell’s efforts to explore for oil in the Arctic – oil which studies have said needs to stay in the ground to avoid dangerous climate change. Campaigners are also concerned about the local environmental implications of bringing Arctic oil onstream.

Despite this, the US government has given conditional approval for Shell to proceed with exploratory drilling this ice-free summer at the Chukchi Sea off the coast of Alaska.

The letter from BP et al. can be accessed at on.bp.com/1cuXFqU