Exxon subsidiary figured out how to curb CO2 in 1991
Document dump reveals Canadian firm’s plan for carbon pricing to reduce emissions
Back in 1991, when climate policy was in its infancy, an Exxon subsidiary came to a startling and prescient conclusion about how to curb carbon-dioxide emissions that cause global warming. It would require a heavy price on CO2 pollution before the companies creating emissions would change, the researchers concluded, at a level far higher than almost any in use today.
Calgary-based Imperial Oil
Ltd., which has ties to Exxon’s predecessors going back to the end of the 19th century, hired an outside research firm to look at how environmental taxes might affect both CO2 pollution and the Canadian economy. Cutting emissions would only be possible with a price per ton of roughly$72 in today’s money and, the researchcarbon-pricing ers argued, the economic impacts would be vast.
At the time there was no price on CO2 pollution—and that remains true in most of the world today, nearly three decades later. There’s now a patchwork of pricing mechanisms, including CO2-emission trading systems in Europe, California and a group of states in the northeastern U.S., as well as current or planned carbon taxes in Mexico, Japan, Argentina and Canada. The top price put on CO2 so far? $120 per ton in Sweden.
The world is nowhere near the price that researchers determined in 1991 would be sufficient to cause a decline in emissions. The average global carbon price — including $0 for every nation without one — is $2.48 per ton of C02, according to Michael Greenstone, a University of Chicago economist who helped develop the Obama administration’s policy.
Imperial’s analysis left no traces in the public sphere at the time, and the company declined to comment. ExxonMobil Corp., which owns 70 percent of Imperial, lays out its policy positions in an Energy and Carbon Summary. The company says it has supported economy-wide carbon pricing for a decade and, in general favors market-based policies that offer predictability, simplicity, transparency and flexibility.
The long-ago research into carbon prices and other Imperial Oil reports were included in a tranche of Exxon documents housed in a public archive and published on Tuesday by two nonprofit groups: Desmog, a Seattle group that researches oil industry communications about climate change; and the Climate Investigations Center, which monitors what it describes as industry efforts to delay climatesafe energy policies.
This arcane corner of Exxon’s corporate history joins a growing library of material used in antifossil-fuel advocacy campaigns and lawsuits against oil majors claiming they knew about (and ignored) the risks of global warming. This latest document dump comes as more than 15,000 officials from 200 countries descend on Madrid, where they’ll try to hammer out how to build carbon markets and compensate poor countries for the effects of warming.
The 1991 report shows that “a reasonable economics firm, looking at plausible taxes at that time, finds that none of them really moved the needle on Canada’s emissions, except for a high tax,” said Kert Davies, founder and director of Climate Investigations Center. “And that’s pretty remarkable.”