Exxon Lobbyist Says Company Backs Carbon Tax Because It Thinks It Will Never Happen

Over the past decade, Exxon Mobil Corp. ― once the chief funder of think tanks that sowed lies about how burning fossil fuels affects the planet’s temperature ― abandoned its denial of climate change and embraced economists’ favored solution: putting a tax on carbon emissions.

But on Wednesday, a veteran lobbyist at the nation’s largest oil producer was secretly recorded on video seemingly confirming what many environmentalists had long suspected ― that Exxon Mobil believes a carbon tax is politically impossible, and thus has supported it as a ploy to prevent lawmakers from enacting more popular climate policies. 

“Nobody is going to propose a tax on all Americans. And the cynical side of me says yeah, we kind of know that,” Keith McCoy, Exxon Mobil’s senior director of federal relations, told undercover Greenpeace UK activists posing as corporate headhunters. “But it gives us a talking point.”

The British broadcaster Channel 4 aired the video in full. Exxon Mobil CEO Darren Woods disavowed McCoy’s statements and apologized within hours. 

Yet many carbon pricing advocates had already shrugged off the scandal, insisting the case for putting a fee on carbon is strong, whether Exxon Mobil supports it or not. The drama underscores the rowdy debate over how to curb emissions, with some pressing for a carbon price — either through a tax or fee of some sort — while others push for the kind of direct federal spending and strict regulations the Biden administration is currently pursuing.

“We have never pushed for a carbon price because Exxon said they support one. That was never the reason,” said Flannery Winchester, a spokeswoman for the Citizens’ Climate Lobby. “We support putting a price on carbon because economists say it’s the most effective way to move our economy away from fossil fuels and toward clean energy.” 

Joseph Majkut, a climate scientist and policy expert at the center-right Niskanen Center think tank, said Exxon Mobil and the rest of the industry need “to demonstrate real and consistent support for a carbon tax, and to clearly explain why they support it.” 

“I don’t hold the most cynical view that there is a top-down embrace of a carbon tax as a delay mechanism,” he said. “I’ve met too many sincere supporters from the industry. But the industry is changing quickly in its approach to climate change, so alignment around that position will have to be honed.”

William Eacho, the Obama-era U.S. ambassador to Austria, said he interpreted McCoy’s comments to mean Exxon Mobil is “far more concerned about an increase in the corporate tax rate than they are with paying carbon fees, so that also makes sense to me.” 

“It doesn’t change the fact that they do support carbon pricing, which is undoubtedly the most powerful policy tool we could apply to the climate challenge,” said Eacho, who co-founded the bipartisan Partnership for Responsible Growth, which supports a carbon tax. “So their opposition to other provisions may be real, but that doesn’t change their position on pricing. As to his comment that won’t happen, well, based on today’s political landscape he might be right, but we have not given up.”

Others cautioned against conflating a carbon tax with carbon pricing. Of the carbon pricing bills currently in Congress, some propose a fee on fossil fuel producers that would be returned to ordinary Americans in the form of a dividend or tax rebate, while others would set up markets to trade pollution permits. 

Peter Cramton, an American economist at the University of Cologne and an advocate of carbon pricing, explained how this difference in terms might have played into Exxon’s supposed support for these policies. 

“Framing carbon pricing as a carbon tax would suggest they are disingenuous. It is common knowledge that voters react negatively to taxes. Carbon pricing is not a tax. It is intended to correct an obvious externality. It is not intended to raise revenues,” he said. “Is Exxon being disingenuous? Are they supporting it simply because it will derail alternatives Exxon finds even less attractive? That is possible. I would want to see how they frame the proposal.”

The Climate Leadership Council, a carbon tax advocacy group Exxon Mobil helped found, issued a terse statement that made no comment on the video, but said the company “has helped bring other organizations on board in support of carbon pricing, and its senior executives regularly join us on Capitol Hill to advocate for this climate solution.”

Carbon pricing once dominated the debate over how to halt the growing output of planet-heating gases into the atmosphere. In 2009, when Democrats last controlled Congress and the White House, lawmakers attempted to enact the country’s first major climate legislation: a cap-and-trade system that would limit total emissions and allow polluters to pay each other for the right to spew carbon.

After that bill failed, Republicans won control of Congress, then the White House, and set about eliminating what meager regulations were in place to limit emissions. The world has produced prodigious amounts of carbon since then, and scientists’ projections now indicate the need to drastically reduce fossil fuel use over the next 10 years to stave off catastrophic warming. In response, policymakers across the world have embraced calls for dramatic government interventions in the economy to rapidly deploy clean energy, reform farming, and shift to zero-carbon transportation. In the U.S., those calls have largely fallen under the guise of the Green New Deal movement, but the vision is hardly limited to American progressives. 

When HuffPost asked in 2018 if a market solution alone could deliver the emissions cuts required to prevent a disaster scenario, two scientists with the United Nations’ Intergovernmental Panel on Climate Change laughed. James Skea, a co-chair of an IPCC working group at the time, said it was “one among that portfolio of instruments that can be used” but could not serve as a panacea.

That reality caused some groups like Friends of the Earth, which once supported carbon pricing, to throw its weight behind Green New Deal-style policies instead. Lukas Ross, the group’s program manager, seemed to take McCoy’s words as Exxon Mobil’s actual position. 

“The only reason a company like Exxon has to talk about climate solutions is to delay and confuse climate action,” he said. “Exxon hides behind carbon taxes. ... Somewhat more sophisticated climate denial is still climate denial.”