Friday, December 6, 2013

Energy Companies Get Real on Global Climate Change

While some in the climate change denial world are hanging onto their anti-science beliefs, most of the world's energy companies are planning for a day when they will have to build carbon taxes and costs into their prices.  Check out this New York Times story about this issue.

Carbon taxes are in place in a number of countries.  They provide funds for programs to mitigate the impacts of climate change.  This is similar to other types of environmental taxes that have been put in place to deal with other problems such as auto exhaust.  Carbon taxes are seen by many as the most cost effective way to fund climate change mitigation.

In the U.S. there is very little law that deals with climate change, greenhouse gas emissions, or carbon tax.  Indeed, most of the recent rule making is coming out of the executive branch of government through the EPA.  This has been challenged quite a bit in court because the EPA is using old laws (Clean Air Act, Clean Water Act, etc.) that were developed prior to concerns about global climate change.  The U.S. Congress has not passed any law regarding climate change and it is unlikely to do so any time soon given the polarization and disfunction in Washington.

So while there is limited policy implementation in the U.S. Government, the real action on climate change policy is at state and local governments and the business community.  Just take a look at BP's climate change information Website here.  They, and other energy companies have long acknowledged the reality of global climate change.  They even specifically encourage a carbon cost system to address the impacts of global climate change.  I quote from their site below:

We believe that the most effective way to encourage companies to find, produce and distribute diverse forms of energy sustainably is to foster the use of markets that are open and competitive, and in which carbon has a price.

Our view is that putting a price on carbon – one that applies economy-wide and treats all carbon equally, whether it comes out of an industrial smokestack or a car exhaust – will make energy efficiency and conservation more attractive to businesses and individuals, and help lower-carbon energy sources become more cost competitive within the energy mix. While a global price would be most economically efficient, regional and national approaches are a necessary first step, provided temporary financial relief is given to domestic industrial sectors that are trade exposed.

So while the U.S. is tinkering with policy via limited EPA programs, many energy companies are encouraging strong policy far beyond what the U.S. is able to do at the present moment due to political gridlock.

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