Leaders and representatives from governments around the world gathered at United Nations headquarters in New York this morning to put their signatures on the agreement worked out last December at the COP21 climate conference.
Climate change is a global issue that requires the collaboration of governments, companies, consumers, and other stakeholders to create global solutions. The risks of climate change are real and those risks warrant constructive action by policymakers, the business community, and everyone who uses energy.
What is particularly significant about today’s signing is that this is the first major international agreement to address climate change that features emissions reduction pledges from both developed and developing economies. That’s good news.
Pledges are helpful, but they are just a start. The real test will lie in how they are carried out in the years to come.
With that in mind, it is worth pointing out that policies designed to address climate change need to be clear and guard against duplicative, overlapping, and conflicting regulations, which send mixed signals to the market and impose unnecessary costs on consumers.
This is something we have thought quite a lot about at ExxonMobil. We believe that effective policies are those that:
- Promote global participation
- Let market prices drive the selection of solutions
- Ensure a uniform and predictable cost of greenhouse gas emissions across the economy
- Minimize complexity and administrative costs
- Maximize transparency
- And provide flexibility for future adjustments to react to developments in climate science and the economic impacts of climate policies
These principles can provide a responsible policy framework for structuring society’s response to climate change risk. There is also a role for private industry, in particular for energy companies like ours.
We are working to create the scientific, technological, and engineering solutions that dealing with the risks of climate change will require.
A big part of that is helping drive the shale revolution in the United States, which is changing the nation’s energy mix and helping to lower the country’s overall greenhouse gas emissions. As the nation’s leading producer of natural gas, we have played a role in this emissions-reduction success story.
Addressing climate-change risk also means developing future technologies – from advanced carbon capture and storage to next-generation biofuels. Our efficiency advances are mitigating greenhouse gas emissions in our own operations. And at the same time we are working to develop solutions that reduce emissions for our customers.
In addition, ExxonMobil is engaging in constructive dialogue on policy options with government leaders, NGOs, and industry. That should be clear from the principles elaborated above.
In keeping with these principles, we have made clear our belief that as governments enact policies to address the risks of climate change, market-based efforts to reduce greenhouse gas emissions – like a revenue-neutral carbon tax – are more economically efficient policy options than regulations, mandates, or standards.
Today’s signing ceremony gives reason to be hopeful the world can collaborate to develop effective policies and innovative solutions.