Major companies plan for U.S. carbon emissions fee, report says

WASHINGTON Thu Dec 5, 2013 11:44am EST

WASHINGTON Dec 5 (Reuters) - Major U.S. companies, from Wal-Mart and Google Inc. to Shell and ExxonMobil, are including future charges for carbon emissions in their strategic plans, according to a report released on Thursday.

The non-profit Climate Disclosure Project, which discloses the greenhouse gas emissions of the world's biggest corporations, found that 29 major companies that operate or are headquartered in the United States, factor in an "internal carbon price" of up to $60 per ton of emissions in their business strategies.

Although the U.S. doesn't have federal rules that require companies to pay for heat-trapping carbon pollution, many firms expect such curbs in the future and have made allowances in their budget for "shadow" carbon prices. These range from $6 to $60 per ton of emissions to model a carbon-constrained scenario, said the report by the UK-based CDP.

Indeed, many companies have made such provisions for years, even as others have lobbied successfully against proposed legislation in 2009 and 2010 that would have established a market price for emissions, known as a cap-and-trade system.

ExxonMobil has assumed one of the highest carbon price projections at $60 per tonne by 2030, the CDP report said.

Other oil majors BP and Royal Dutch Shell use a $40 carbon price, while Devon Energy set a carbon price of $15 per tonne to "account for the cost or benefits associated with any change in greenhouse gas emissions resulting from proposed projects."

Utility companies, which are preparing for direct regulation by the Environmental Protection Agency of the greenhouse gas emissions of their facilities by 2014, have also factored in carbon pollution charges.

The Minnesota-based utility Xcel Energy has used a $20 carbon price for years in its internal deliberations, while Ameren Corp., based in Missouri, assumes a $30 per ton cost by 2035.

Wal-Mart, the world's largest retailer, which has touted its plan to curb carbon emissions in its supply chain, has a confidential carbon price in place, CDP said, while software giant Microsoft Corp. has said it incorporates a $6-$7 a ton carbon price in its internal planning.

SOCIAL COST

The Obama administration has been using its own version of an internal carbon price since 2010 to estimate the future economic damage caused by carbon pollution, called the social cost of carbon.

The measure is used by many arms of the U.S. government to determine the financial benefits of new emissions regulations put in place since 2010.

Earlier this year, the administration raised its 2020 forecast to $43 a ton, up 58 percent from its 2010 estimate.

Experts said the move would make it easier for agencies like the EPA to crack down on emissions by showing that the greater benefits of such measures would justify their cost.

The move to raise the social price of carbon pollution has triggered a new bout of opposition by some energy companies and major business lobbying groups such as the U.S. Chamber of Commerce. They have argued that the administration's calculation of its internal carbon price is opaque and should be open to public comment.

In response, the White House Office for Management and Budget in November announced it would seek public comment for its cost estimate.

The UK-based CDP collects disclosure data on behalf of 722 investor signatories. In 2013, about 1,000 US companies disclosed their emission rates through the CDP.

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