1 April 2014 (Associated Press) – On the same day the world's scientists issued their latest report on climate change and the risks it poses to society, America's biggest oil and gas company said the world's climate policies are "highly unlikely" to stop it from selling fossil fuels far into the future.
Exxon Mobil issued a report on Monday on the risks that climate change policies could pose to the value of its assets and future profitability, by coincidence on the same day as the latest paper by the Intergovernmental Panel on Climate Change, a Nobel Prize-winning United Nations group assembled to assess the science and risks of climate change.
Both Exxon and its critics used IPCC research to bolster their cases.
Exxon's report was in response to the contentions of some shareholders and environmental activists that the assets underpinning the value of Exxon and other fossil fuel companies will be worth less as society restricts consumption of fossil fuels to fight climate change.
The report, the first detailed response to these concerns by a major oil company, acknowledges the need to adopt policies to address climate change. But it concludes that because oil and gas are so critical to global development and economic growth, governments are "highly unlikely" to adopt policies that cut emissions so sharply that fossil fuel consumption would be severely restricted.
"We know enough based on the research and science that the risk (of climate change) is real and appropriate steps should be taken to address that risk," Ken Cohen, Exxon's government affairs chief, said in an interview. "But given the essential role that energy plays in everyone's lives, those steps need to be taken in context with other realities we face, including lifting much of the world's population out of poverty."
Natasha Lamb, director of equity research at Arjuna Capital, a sustainable wealth management group that filed the shareholder resolution with Exxon, called Exxon's report a "milestone." "It's a huge first step in the right direction and it shows a lot of leadership," she said. […]
Exxon says that renewable energy sources are not now cheap enough nor technologically advanced enough to meet growing demand for energy, let alone also replace oil and gas. Governments therefore face a choice between restricting access to energy or raising the cost of energy significantly. In Exxon's view, governments will chose to raise the cost of fossil fuels to encourage alternatives somewhat, but stop well short of enacting policies that will sharply curtail consumption, especially in developing countries, because populations would resist and social upheaval would result.
Arjuna Capital's Lamb disagrees. "There's greater risk of social upheaval from climate change itself," Arjuna Capital's Lamb says. "[Exxon's report] ignores the cost of inaction." [more]