Exxon reverses opinion on tax v cap'n trade

Via Drudge:

Exxonmobil corp., the world's largest crude oil refiner, supports taxing carbon dioxide as the most efficient way of curbing greenhouse gas emissions, its chief executive said.

"As a businessman, it's hard to speak favourably about any new tax, but a carbon tax strikes me as a more direct, more transparent and more effective approach," Rex Tillerson, CEO of the Irving, Texas based company, said Thursday at the Woodrow Wilson international center for scholars in Washington.

A trading program, known as 'cap and trade,' "inevitably introduces unnecessary cost and complexity" that reduces effectiveness, said Tillerson. They require a vast expansion of regulation, he said. a carbon tax "can be more easily implemented" and is the "most efficient means of reflecting the cost of carbon," said Tillerson.

"Such a tax should be made revenue neutral," he said, which requires other taxes to be lowered so that the overall tax burden isn't increased.

Comments

[Mark Shapiro]

Potentially huge news - if Tillerson and ExxonMobil are willing to support it publicly and consistently.

Or is he hoping that a new administration will see a ray of hope, actually propose a carbon tax, and then be left twisting in the political wind?

[David Zetland]

Businesses are starting to see the light -- C&T will bring MORE volatility to them.

[Invisible Hand]

I agree that this is huge. For the past several years I've been trying to convince business executives that they need to help formulate an EFFICIENT program to reduce GHG emissions. The alternative is to let environmentalists concoct an ivory-tower scheme that will get forced on them. Nevertheless, far too many executives have chosen to deny that climate change exists, and have opposed any serious plan to fight climate change.

Exxon at least has enough sense to know that times are changing and it's better to have a good GHG plan than a poor one. Hopefully, the rest of the business community will come around to a Carbon Tax, the sooner the better.

[Hydra]

"...supports taxing carbon dioxide as the most efficient way of curbing greenhouse gas ..."

OK, so I'm a farmer,and every year I convert hundreds of tons of CO2 into oxygen and other carbon containing products. The carbon containing products are sequestered for various amounts of time and eventually they get converted back to CO2.

If one of my products is a Stradivarius, we can all hope it will be sequestered fo a good long time. My point being that if you want to sequester carbon, don't invest in forests: invest in something really valuable that will be protected for a long time, on its own merits.

So, if we tax people for creating CO2, do we un tax them for reversing theprocess and creating Oxygen?

If CO2 is $30 a ton then the value of Oxygen would make a lot of unprofitable farms profitable. We are missing the boat by focussing only on "polluter pays". There are positive and neative externalities that should be rewarded appropriately.

Course, if you are a hog or cattle farmer, you might be out of luck.

[Pradeep]

@Hydra,
"Course, if you are a hog or cattle farmer, you might be out of luck."
In fact, hog and cattle farmers can implement measures to reduce their greenhouse gas emissions (capturing and flaring methane from animal waste is one simple measure) and easily make money in voluntary markets.

[Invisible Hand]

"My point being that if you want to sequester carbon, don't invest in forests: invest in something really valuable that will be protected for a long time, on its own merits."

A protected forest will sequester a lot more Carbon than a Stradivarius, at a much lower cost per ton. Even a mature forest will continue to sequester Carbon, both underground and by building humus topsoil. Also important are the other "merits" of the forest -- ecological, recreational, water supply, perhaps tree crops and biofuels.