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Climate policy decisions that can help drive energy investments
January 24th, 2022
The world is searching for ways to reduce emissions, and the right policies can help get us there. Here are three policy decisions that can help us expand research and development efforts, bringing society one step closer to achieving climate goals.
Every technology begins with inspiration – an idea and a vision for a different way of doing something. The next step is research and development – the intensive technical, scientific work that turns an idea on paper into a technology that works in practice. Then, the final step is critical: How do you scale up a technology into something that can benefit millions, or even billions, of people in the real world?
To scale up a technology like carbon capture and storage, enormous capital investments are required. Entire infrastructures must be designed and built, and deployment at an industrial scale is a decades-long commitment. To make the long-term business case for such an investment, stakeholders expect government policies to support the technology as it scales. In order to make carbon capture a reality, three key policy positions are needed.
An economy-wide price on carbon
Establishing a market price on carbon dioxide is an important element of building the business case for capturing it. A stable and transparent price on carbon can help provide the economic clarity and stability required to drive investment – as well as incentivize action to reduce emissions. ExxonMobil has publicly supported a carbon tax since 2009 as the best of policy options being considered by governments.
A technology-neutral approach
No single technology will enable society to meet the climate ambitions outlined in the Paris Agreement. That’s why it’s so important that government policies acknowledge the need for many different solutions to be treated equally and for each to have the opportunity to thrive. With a technology-neutral framework, emission-reduction technologies will be able to compete on a level playing field.
A predictable policy landscape
Investors are drawn to certainty and innovative minds to opportunity. Predictable, stable, cost-effective policies to incentivize CCS are needed to promote the development and scalability of this technology. The climate change challenge is long term, and any policy response needs to have the same perspective. One long-term policy incentive could be a tax credit to promote the allocation of capital to CCS. In fact, 84% of U.S. adults support providing a business tax credit for CCS technology, according to the Pew Research Center.
A challenge for technology … and policy
Finding the right policy solutions to support CCS is as much of a challenge as deploying the technology itself. To help make progress on policy, ExxonMobil continues to engage in efforts to encourage sound and constructive solutions.
We respect and support society’s ambition to achieve net-zero emissions by 2050 and continue to advocate for policies that promote cost-effective, market-based solutions to address the risks of climate change.
Learn more about our investment in energy policy and emerging CCS technologies.
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