policy landscape that enables innovation and competition. Policies need to be clear and guard against duplicative, overlapping and conflicting regulations, which send mixed signals to the market and impose unnecessary costs on consumers. We believe that effective policies are those that:
Up Close: Attributes of sound market- based policy While market-based systems may have different designs and regional applications, we believe effective systems are those that promote global participation and are characterized as follows: Only through a sound global policy framework will the power of markets and innovation enable society to find cost-effective solutions to address the risks of climate change, while at the same time continuing to address the many other challenges the world faces. Engaging stakeholders Managing the risks of climate change will require increased innovation and collaboration. Therefore, ExxonMobil engages a variety of stakeholders — including policymakers, investors, consumers, non-governmental organizations (NGOs), academics and the public — on climate change issues of direct relevance to the company.
Society continues to face the dual challenge of meeting energy demand to support the economic growth needed for improved living standards, while simultaneously addressing the risks posed by rising greenhouse gas emissions and climate change. While future temperature changes and the associated impacts are difficult to accurately predict, we believe the risks of climate change are real and warrant thoughtful action. ExxonMobil supports advancement of the scientific understanding of climate change and is committed to providing affordable energy to support human progress while advancing effective solutions to address the risks of climate change. Our climate change risk management strategy includes four components: engaging on climate change policy, developing future technology, mitigating greenhouse gas emissions in our operations and developing solutions that reduce greenhouse gas emissions for our customers. Climate change is a global issue that requires the collaboration of governments, companies, consumers and other stakeholders to create global solutions. We believe countries need to work together to craft policies aimed at mitigating greenhouse gas emissions that recognize the priorities and needs of both developed and developing countries. We engage stakeholders directly and with trade associations around the world to encourage sound policy solutions for addressing these risks. Attributes of sound climate policy ExxonMobil believes the long-term objective of effective policy is to reduce the risks posed by climate change at minimum societal cost, in balance with other societal priorities such as poverty eradication, education, health, security and affordable energy. We fundamentally believe that free markets, innovation and technology are essential to addressing the risks of climate change. Success in developing and deploying impactful technologies will highly depend on governments creating a Engaging on climate change policy
• Promote global participation;
• Let market prices drive the selection of solutions;
• Ensure a uniform and predictable cost of greenhouse gas emissions across the economy;
• Minimize complexity and administrative costs;
• Maximize transparency; and
• Provide flexibility for future adjustments to react to developments in climate science and the economic impacts of climate policies. Policies based on these principles minimize overall costs to society and allow markets to help determine the most effective and commercially viable solutions. Given the wide range of societal priorities and limited global resources, all policies, including climate change policy, must be as economically efficient as possible. ExxonMobil believes that market-based systems that impose a uniform, economy-wide cost on greenhouse gas emissions are more economically efficient policy options than mandates or standards. This is because market-based policies more effectively drive consumer behavior and technology innovation, while mandates and standards eliminate consumer choice and can perpetuate ineffective technologies. Since 2009, ExxonMobil has held the view that a properly designed, revenue-neutral carbon tax is a more effective market-based option than a cap-and-trade approach. A carbon tax is more transparent, can be implemented in existing tax infrastructure, avoids the complexity of creating and regulating carbon markets where none exist and reduces greenhouse gas emissions price volatility, thus delivering a clearer, more consistent long-term market price signal.
• Apply to all greenhouse gas emissions across the economy;
• Provide a uniform price for all greenhouse gas emissions;
• Apply the costs of greenhouse gas emissions to the parties most able and likely to alter behavior in response to a price signal;
• Prevent shifting of greenhouse gas emissions to unregulated jurisdictions;
• Provide for linkages with other market-based systems outside the regulated jurisdiction;
• Return revenue generated from the system back to the economy in an equitable fashion that encourages economic growth and limits regressive income effects; and
• Provide for accurate and cost-effective greenhouse gas emis- sions measurement, verification and reporting.
Managing climate change risks exxonmobil.com/citizenship
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