Oil industry’s chief trade group mulls embrace of carbon pricing

The American Petroleum Institute is considering throwing its weight behind a government-imposed price on carbon dioxide emissions as a way to slow global warming, a major policy shift by the industry’s top trade group.

The initiative to endorse economy-wide carbon pricing—without specifically backing a tax on carbon dioxide emissions—comes amid a broader business shift on the issue and was described by two people familiar with the matter.

The Chamber of Commerce embraced market-based policies to limit emissions in January, and several of API’s largest members, including Exxon Mobil Corp., ConocoPhillips, BP Plc and Royal Dutch Shell Plc already support a carbon tax-and-rebate plan.

API’s draft policy statement could receive a vote later this week according to one of the people.

API previously telegraphed the move in January, when it said it supported the ambitions of the Paris agreement to pare greenhouse gas emissions and cited “market-based policies” such as carbon pricing as a way to balance those reductions with “flexibility and pacing to keep energy affordable.”

API senior vice president of communications Megan Bloomgren said the group has “convened top industry officials throughout the supply chain to incubate a host of policy solutions and industry actions to shape a lower-carbon future.”

“Our efforts are focused on supporting a new U.S. contribution to the global Paris agreement,” Bloomgren said by email.

Consideration of API’s move was earlier reported by the Wall Street Journal.

Several utilities have lobbied Biden administration officials to support a nationwide carbon price. And Treasury Secretary Janet Yellen, who previously endorsed a carbon tax as the “textbook solution” to climate change, reiterated in January that “effective carbon pricing” is essential to “solve the climate crisis.”

“I am fully supportive of effective carbon pricing, and I know that the president is as well,” Yellen said in written answers to Senate Finance Committee questions.

Nevertheless, the politics of the issue are thorny, particularly in the Senate, which voted 50-50 along party lines last month to block a measure that would have opposed a carbon tax.