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Europe's oil majors call jointly for carbon pricing

01 June 2015

On June 1, Europe’s six largest oil and gas companies called on governments around the world and to the United Nations Framework Convention on Climate Change (UNFCCC) to introduce carbon pricing systems and create clear, stable, ambitious policy frameworks that could eventually connect national systems. 

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These, they said, would reduce uncertainty and encourage the most cost effective ways of reducing carbon emissions widely.

The statement was signed by the the CEOs of the companies: Helge Lund, BG Group Plc; Bob Dudley, BP plc; Claudio Descalzi, Eni S.p.A.;  Ben van Beurden, Royal Dutch Shell plc; Eldar Sætre, Statoil ASA; and Patrick Pouyanné, Total SA.

With this joint initiative, the companies said they recognised both the importance of the climate challenge and the importance of energy to human life and well-being. They said they acknowledged that the current trend of greenhouse gas emissions was in excess of what the Intergovernmental Panel on Climate Change says is needed to limit global temperature rise to no more than 2 degrees Centigrade, and said they were ready to contribute solutions.

In the statement, the companies said:

“Our industry faces a challenge: we need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part. We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace. 

“We now need governments around the world to provide us with this framework and we believe our presence at the table will be helpful in designing an approach that will be both practical and deliverable.”

This comes after criticism that the oil industry has not done enough to tackle climate change.
US oil majors ExxonMobil and Chevron chose not to take part in the initiative, an industry source told Reuters, although Total’s CEO said he hoped one of them would soon join the initiative.

The letter was first published by the Financial Times on May 31.

According to a report published by the World Bank last week, 40 nations and over 20 cities, states and regions now have a price on carbon dioxide (CO2) emissions, covering around 12% of annual global greenhouse gas emissions, or the equivalent of nearly 7 billion tonnes of CO2.
The value of global schemes to price carbon, including trading schemes and taxes, totalled almost $50 billion as of April 1, the World Bank said.

Governments from more than 190 nations from June 1 to June 11 will work towards streamlining a draft text of a U.N. deal to fight climate change due to be agreed in Paris in December.

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