Would A $100 Per Ton Carbon Tax Get ExxonMobil To Right Its Errant Ways?

Would A $100 Per Ton Carbon Tax Get ExxonMobil To Right Its Errant Ways?

(Photo by Scott Olson/Getty Images) The Democrats just introduced a bill seeking $500 billion in climate damages from oil giants such as Exxon and Chevron. While I understand the desire behind this legislation and I am not opposed to a carbon tax, we all need to be careful about treating the carbon tax as a silver bullet with little to no unintended consequences. And we'll make the case using Exxon as an example. My co-author and fellow Forbes contributor Bob Eccles challenged the two of us to assess how a $100 per ton carbon tax would stress Exxon's 2020 financials. What follows is an early and a relatively crude attempt at such scenario planning. We view the financial analysis of Exxon as a way of teeing up the complexity of dealing with Scope 3 and other policy issues. To get everyone on the same page, Scope 1 emissions are direct greenhouse gases (GHG), measured in tons, from Exxon's operations such as production and drilling. Scope 2 are indirect greenhouse gas emissions from energy purchased by Exxon. Scope 3, the most controversial, includes the indirect emissions resulting from the consumption and use of oil and gas and chemicals sold by Exxon.