A report issued yesterday by the Carbon Disclosure Project generated a number of news articles today, including in the New York Times. The report identified 29 major US corporations’ inclusion of future carbon prices in their financial planning. This is a significant and logical development. It is financially responsible for companies with billions of annual revenue dollars to consider upcoming costs in their planning. These companies aren’t partisan, they’re interested only in making money. If they think there is a way to make more money with carbon pricing than without, they’ll plan and act accordingly.
The NYT article notes that many Republicans might not like this development. That’s due to the hyper-partisan characteristic of today’s leading Republicans. Their worldview demands that they yell loudly at developments like carbon prices. And despite their to-date very successful campaign to prevent policymakers from establishing a national carbon tax (which economists agree is the most economically efficient method) or a cap-and-trade system, they can’t and don’t control global policymakers. A larger economic body than the US established a carbon price: the European Union. China has begun limited implementation of carbon pricing. Regional cap-and-trade systems encompassing US states and Canadian provinces with large economies exist and will only expand in the future. What this means is US corporations doing business in the EU and China (and soon high population US states) have to take their carbon pricing into account.
The NYT and Huffington Post articles’ authors seem more surprised that companies like ExxonMobil are among those who are planning for carbon pricing than anything. As I stated above, this is really the only logical development left for Exxon and other companies. They can either perform their fiduciary duties and protect their shareholders’ interests or they can lose market share or fail.
This is one of the reasons I’ve supported regional carbon pricing following the continued failure to price carbon at the national and international levels. If the price exists in a large enough portion of the larger economy, companies have to respond. They can more easily lobby national politicians than local people who are very supportive of carbon pricing and who can run for local offices. This is an example of my larger point that we need to implement climate mitigation and adaptation policies at the local level first. Efforts to do this at the international level have failed time and time again. But if thousands of communities implement their own strategies nationally and internationally, then higher levels of government have examples with which to work and grow. More importantly, thousands of communities’ influence establishes political and social inertia that lobbying can only blunt. This is the fastest way toward widespread policy implementation.