Mobil Joins Carbon Tax Chorus, Shell Sides With Cap And Trade
May 6th, 2009
Oil giants Mobil and Shell favour different outcomes from the special Select Committee’s review of the Emissions Trading Scheme, with the Exxon subsidiary calling for the introduction of a carbon tax, while the Royal Dutch Shell representative supports a cap and trade system.
Mobil NZ joins the increasing number of large companies throwing their support behind a carbon tax. Its public affairs manager Alan Bailey wrote in his submission “economic efficiency” is crucial in choosing the best way forward in reducing greenhouse gas emissions, with a revenue-neutral carbon tax more efficient and predictable in reflecting the cost of carbon than an ETS.
Bailey points out mitigating global emissions requires buy-in from the world’s major developing economies, and NZ’s carbon footprint is extremely small. The oil giant also expressed its concerns over the potential price volatility of a trading scheme, claiming a carbon tax provides greater economic certainty which would promote investment into reducing emissions.
Shell, on the other hand, has cast its weight behind a cap and trade system as the best approach to reduce emissions. Chairman Rob Jager’s submission calls for a scheme to be implemented before Australia’s, saying it will give NZ businesses a head-start in managing emissions and trading carbon, and allow them to look for opportunities before their trans-Tasman rivals. He says the carbon market should be treated like any other commodity market, allowing the market to adjust prices based on scarcity.
Mobil hedged its bets in the submission, telling the Committeee if an ETS is adopted, its focus should be on the reduction of emissions rather than allowing businesses to treat it as a means to pursue their own commercial interests, while Shell affirmed its commitment for a “low carbon future,” taking the moral high ground when it pointed out it acknowledged the reality of climate change as an issue in 1997.
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