BP calls for a price on carbon from governments

BP believes that carbon pricing by governments is the most comprehensive and economically efficient policy to limit greenhouse gas emissions

Bob Dudley, Group Chief Executive and a director of BP

According to BP, putting a price on carbon – one that treats all carbon equally, whether it comes out of a smokestack or a car exhaust – would make energy efficiency more attractive and lower-carbon energy sources, such as natural gas and renewables, more cost competitive.

BP is one of the top 5 biggest oil and gas companies in the world, with $353.57 billion revenue in 2014. With over 84,000 employees(2014) across the globe, with operations in 84 countries.

A carbon price incentivizes both energy producers and consumers to reduce their GHG emissions. Governments can put a price on carbon via a well-constructed carbon tax or cap-and-trade systems according to BP.

In BP’s view, putting a price on carbon will reduce emissions at a larger scale and at lower cost than alternative policy measures, by reducing the demand for carbon-intensive products.

It might make our operations and products more costly in some cases. We consider that this is fair – as long as the carbon price impacts all GHG emitters equally – and we are keen to compete on this level playing field.

A global carbon price

BP was pleased with the agreement made at the 2015 UN climate conference in Paris which created the possibility for carbon pricing to help deliver global goals and national contributions for reducing GHG emissions.

According to BP, they recognize different national prices are a necessary and practical first step but would like to see convergence towards a single global carbon price over time. In the meantime, any national carbon pricing mechanism should address the impacts of unequal international competition.

Otherwise there is a risk of carbon leakage, meaning that energy-intensive industrial activity and investment could just move from one country to a less-regulated part of the world – potentially increasing their associated GHGs worldwide.

BP has long publicly supported measures to put a price on carbon emissions, including our endorsement of the World Bank carbon pricing statement in 2014.

They also stepped up their advocacy in 2015, joining seven other oil and gas companies in calling on the UN and governments to put a price on carbon. Work is continuing through face-to-face meetings between the companies, select governments and UN representatives to share lessons learned and views on policy to effect change.

BP also joined the Carbon Pricing Leadership Coalition, which brings together senior representatives from government, the private sector and civil society to expand the use of carbon pricing.

They are actively preparing for a future with a potentially higher carbon price by requiring their own businesses to use an internal carbon price – currently set at $40 per tonne of carbon dioxide (CO₂) equivalent for industrialized countries – in evaluating large new projects.