In previous posts, I’ve written about how private companies are, in many cases, leading the charge on climate change preparedness.
That made the front page of today’s New York Times pleasant reading. Here, Times reporter Coral Davenport provides a great run-down on a new survey from CDP, an organization that gathers data and analysis on the private sector and climate change.
CDP details how many of the largest U.S. companies, including oil and gas giant Exxon Mobil, are including carbon pricing in future planning.
Estimating the future cost of carbon emissions, either through a direct carbon tax or by an emissions trading program like the one currently in operation in the European Union, or (on a smaller scale) in California, is considered essential to future operations.
Environmental altruism is, of course, not the animating influence. These are, after all, profit-seeking corporations who want to minimize the risk of future legislation. Assuming a carbon price in contemporary planning will assist with future construction and research priorities, according to the narratives provided by over a dozen companies.
Chevron, for example, states that all of their capital projects costing more than $5 million will include analysis to estimate emissions, allowing Chevron to plan emission reduction options for its corporate infrastructure.
What’s remarkable about these estimates, however, is that the incentive to do so is affected mostly by foreign governments, not the U.S. (which has no federal carbon price).
Delta Air Lines, for example, has operations throughout Europe that are affected by the EU’s Emissions Trading Scheme. That regulatory framework is affecting how it thinks of future airline purchases.
Additionally, many of the price estimates are often much more aggressive than current government policies. Exxon, for example, posits a price of $60 per ton, almost three times the C02 price in Ireland and Denmark, to take two examples.
The Obama Administration, for what it’s worth, has not indicated that a carbon price is in the offing. If it were to change its mind, by, for example, allowing states to assess a carbon tax in order to comply with upcoming restrictions on existing power plants, it would seem that many in the private sector would be willing and able to go along.