Divestment Still a Necessary Strategy as ExxonMobil Reports on Stranded Assets

The largest oil and gas company in the world, ExxonMobil, agreed under pressure from activist shareholders to publish a “Carbon Asset Risk” report on their website, to provide information to shareholders on the risks that stranded assets pose to the company’s business model, and how the company is planning for a low-carbon world. Stranded assets for Exxon are the carbon reserves which would need to remain in the ground if the world were to follow a carbon budget to keep below 2 degrees of global warming.

Some environmentalists are claiming this transparency as a victory – GreenBiz described it as “a pivotal milestone on the road to a low-carbon economy”. Bill McKibben, noting that the Exxon report was released on the same day as the IPCC Report, said it is “probably at least as important in the ongoing battle over the future of the atmosphere”. But McKibben sees “consummate arrogance” in Exxon’s statement that “we are confident that none of our hydrocarbon reserves are now or will become stranded”. For McKibben, the solution remains a divestment campaign – a strategy that Archbishop Desmond Tutu also urged in an April essay in The Guardian.

See “Exxon, Stranded Assets and the New Math” at GreenBiz: http://www.greenbiz.com/blog/2014/03/24/exxon-stranded-assets-and-new-math, and an article in the Wall Street Journal Market Watch at: http://www.marketwatch.com/story/landmark-agreement-with-shareholders-exxonmobil-agrees-to-report-on-climate-change-carbon-asset-risk-2014-03-20. But see also Bill McKibben’s article in The Guardian on April 3rd, “Exxon Mobil’s Response to Climate Change is Consummate Arrogance” at: http://www.theguardian.com/environment/2014/apr/03/exxon-mobil-climate-change-oil-gas-fossil-fuels?CMP=twt_fd&utm_content=bufferfc5c8&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, and Desmond Tutu, “We Need an Apartheid-style Boycott to Save the Planet” at: http://www.theguardian.com/commentisfree/2014/apr/10/divest-fossil-fuels-climate-change-keystone-xl.

For an overview of Stranded Assets, see Unburnable Carbon: Wasted Capital and Stranded Assets at:
http://www.lse.ac.uk/GranthamInstitute/publications/Policy/docs/PB-unburnable-carbon-2013-wasted-capital-stranded-assets.pdf.

90 Companies Account for Two-Thirds of Global Emissions: a New Look at who is Responsible

A widely-cited article in the November issue of Climatic Change analyzed the greenhouse gas emissions produced by the largest investor-owned and state-owned companies, rather than the usual metric of national emissions.  The results show that nearly two-thirds of carbon dioxide and methane emissions from 1854 to 2010 can be attributed to 90 companies, with almost 30% of emissions produced by the top 20 companies .  Among state-owned companies,  Russian enterprises produced 8.9% of the total emissions, with China accounting for 8.6% of total global emissions. Among investor-owned companies, ChevronTexaco was the leading emitter, causing 3.5% of global emissions, with Exxon causing 3.2% and BP causing 2.5%. The data in the article was constructed using public records and data for the period 1854 to 2010, from the U.S. Department of Energy’s Carbon Dioxide Information and Analysis Centre. Author Richard Heede states, “the present analysis…invites consideration of the suggestion that some degree of responsibility for both cause and remedy for climate change rests with those entities that have extracted, refined, and marketed the preponderance of the historic carbon fuels.” Read “Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854-2010”  in Climatic Change (November 2013) at: http://link.springer.com/article/10.1007/s10584-013-0986-y