In our conversations and in comments made to my first post, ExxonMobil’s Vice President of Public Affairs, Ken Cohen, has been explicit with his company’s position that global warming is happening, human activity is causing it, and something has to be done about it.

But the waters get a bit muddy when he is asked Exxon’s opinion on the best route to take to slow global warming. For example, Cohen explained that any carbon policies that are enacted need to be global in nature:

If we focus on Western Europe and focus on the USA to the exclusion of the developing economies in Asia, we’re not successfully addressing the problem…The developing world must be encouraged to join us.

But at the same time, he continued, industrialized nations should recognize that carbon emissions aren’t high priorities in many developing countries, where issues like public health and education take precedence.

So, Tom Yulsman from Prometheus asked, does that mean Exxon would support a cap-and-trade program? Cohen explained that Exxon is “not anti cap-and-trade or pro cap-and-trade. The devil’s in the details.”

Does this mean that Exxon would favor a carbon tax instead? asked Susan Smith of the Environmental Law Prof Blog. Cohen answered that most economists have found that a carbon tax makes the most sense because of its efficiency and because it doesn’t favor one sector of the economy over the other. Again, though, “the devil’s in the details.”

I was perplexed. Exxon believes that action should be taking to mitigate global warming, but doesn’t appear to have a course of action. It seemed that they were advising a rather slow, cautionary approach and insisting every question under the sun be answered before a particular policy direction is taken. I’m not advocating that we rush to impose sky-high gas taxes or outlaw air conditioning either, but the world has got to take decisive action now to make a difference.

So in an email, I asked Cohen what a market-based solution to global warming would like, if Exxon had its way. Although Exxon does not officially endorse any particular policy, it does envision

…a world-wide approach in which countries take action - but these action steps look different depending on where you are starting. For example, a cap and trade approach might not be a viable proposition for rapidly growing economies in the developing world. Options like a carbon tax and cap and trade are under consideration (or, are actually in place) in several countries in the [Organization for Economic Cooperation and Development], but as we discussed, the design features of these specific policy measures can vary significantly.

A market-based solution would preferably be something applied to the broadest possible cross section of the economy…We believe there are existing policy mechanisms that would be available to take into account different market-based approaches to climate policy.

Cohen is very aware that Exxon’s stamp of approval on any policy could also be the death of it. During our phone conversation, in response to a question by Stuart Staniford of The Oil Drum as to whether anyone would take Exxon seriously on its global warming commitment, Cohen admitted that if Exxon came out in favor of a particular policy, many people’s first reaction would be: “If Exxon’s for it, then something must be wrong with it.” I saw this myself when I commented to a colleague about Exxon’s lack of investment in renewable energy projects like wind and solar. “Good,” he said. “They’d just screw it up anyway.”

But Exxon has to stay competitive in this changing fossil fuel market. Its competitors like BP and Chevron are increasing their use of renewable energy and are talking about impending carbon regulation. I asked Cohen, “What is Exxon doing on the ground right now to prepare for carbon regulation and the shift to renewables? How is the company assuring its investors that they’re staying competitive with this regulation coming down the pipeline?”

The answer I got was perhaps one of the most straightforward of the conversation.

Cohen flatly stated that until Exxon sees its competitors making money from renewable energy projects, Exxon is keeping its distance. The company invests heavily in biofuels, is the biggest blender of ethanol in the United States, and the most efficient petrochemical company, according to him. But Exxon will only work with technologies that are “robust enough to stand on their own two feet” and at this time, solar and wind don’t fit the bill.

Good news, Mr. Cohen! Chevron is reporting double digit increases in revenues from renewable energy projects, and last May, BP recorded its first profits from its solar division. Looks like this is the perfect time for ExxonMobil to make a move into the renewable energy market and diversify its business. I’ve got great recommendations on some flat land in the Upper Midwest that could use a few wind turbines.

Renewable Energy Access

ExxonMobil was recently scorched in the spotlight when an article in the UK newspaper the Guardian tied the planet’s largest corporation to the American Enterprise Institute (AEI), a vehemently free-market, right-leaning organization that tried to pay scientists and economists to author articles casting doubt on the Intergovernmental Panel on Climate Change’s (IPCC) global warming report. This didn’t surprise many people, as Exxon has never had a reputation of being green or progressive on global warming solutions.

But can Exxon defend itself? Has it joined the rest of the world in recognizing global warming is happening? If so, what are its plans to slow it?

I had the privilege of participating in two telephone news conferences with ExxonMobil’s Vice President of Public Affairs, Ken Cohen, to answer some of these questions. Other bloggers on the call were Jesse Jenkins from Watthead, Tom Yulsman from Prometheus, Susan Smith from the Environmental Law Prof Blog, and Stuart Staniford from The Oil Drum. One call took place on January 26, a week before the IPCC report was released. The next happened on February 2, the day the IPCC report and the Guardian article came out. This post is the first of a 2-part series on Exxon’s response to the allegations in the Guardian, its position on global warming, and what it thinks should be done about it.

I went in with an open mind: To be sure, Exxon was making a concerted effort to reach out to the blogosphere and discuss its position on global warming – that in itself was big news. But I also expected some real answers that would give me at least a glimmer of hope that this behemoth was taking decisive action.

“The IPCC report is the best compilation of the thinking on the subject,” Cohen told us, insisting that Exxon takes global warming very seriously and has in fact recognized the problem for twenty years. He spelled it out further:

Is the climate warming? Yes. Are CO2 emissions up? Yes, they’ve never been as high as they’ve been [now]. Man’s use of fossil fuels and land use changes and other human activity contribute to that CO2 rise.

So did ExxonMobil fund AEI to muddle the dialogue on global warming?

“We had no knowledge that this was going on,” insisted Cohen. He explained that Exxon funds a lot of different groups, and “when we fund them, we want good analysis." Exxon does not condone what AEI did, but Cohen confirmed that it does continues to fund AEI, although other groups like the Competitive Enterprise Institute are not funded by them anymore.

Cohen assured us that Exxon is “trying to be a constructive player in the policy discussion and not associate [themselves] with those that are marginalized and are not welcome in that discussion.” The IPCC report “is what it is,” and Exxon does not believe in engaging in scientific research that preordains an answer. Cohen:

…that's the issue with AEI: Are they preordaining an answer?…I can understand taking a market approach or a government interventionist approach, but this is not a question of trying to find who’s right or who’s wrong. Let’s let the process work.

But, I asked, how can you grant AEI nearly two million dollars and not know what they’re doing with the money? Turns out that Exxon conveniently funds the “general operations” of AEI, not specific programs that would allow them to track how the money is being used. Perhaps Exxon needs to think hard next time before it funds an organization so clearly disinterested in constructive solutions.

Cohen was consistently explicit in Exxon's position that global warming is happening and mainly caused by human activities. If that is true, then how will Exxon fight the huge misperception that it’s still the planet's largest naysayer? Cohen conceded that the company needed to do a better job of communicating its position on global warming, rather than allowing a fact sheet or news release on their website to do the work.

Jesse Jenkins asked whether it would consider joining the new U.S. Climate Energy Action Partnership, a coalition of major corporations and environmental organizations calling for federal carbon dioxide regulation. When Cohen answered this question in our first conference call, he seemed cool to the idea, pointing out that Exxon is already part of many global warming discussion groups and that some of their scientists participate in the IPCC. However, Cohen brought the idea up himself on our second call, this time saying that the Partnership is a group “…that we might join and participate in the discussions – if they’ll have us.”

Coming up Thursday: What is Exxon doing to mitigate its contributions to global warming? Which policies and market-based solutions does it think would be the most effective? How is Exxon staying market-competitive in a shifting energy system?

CBS News.com
News Release: ExxonMobil's response to publication of the IPCC Fourth Assessment Report of Climate Science
News Release: Addressing the Risks of Climate Change: ExxonMobil's Views and Actions
The Guardian: Scientists offered cash to dispute climate study