Report

New York Investigates Exxon’s Climate Skepticism

Exxon and other energy companies are in the crosshairs of prosecutors who accuse them of deliberately downplaying the risks posed by climate change.

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The New York State Attorney General has opened an investigation into Exxon Mobil’s longtime public skepticism about climate change, subpoenaing internal corporate documents that could help clarify whether the oil giant has misled investors about the risks posed by a warming planet, the New York Times reported.

In past months, Exxon’s sometimes complicated relationship to climate change has been the focus of a number of news articles, especially a series by Insideclimate News. They seemed to show that the company was long aware of the risks that burning fossil fuels such as oil pose to the planet, yet sought to downplay or minimize public concern. For years, Exxon financially supported groups skeptical of taking action to fight climate change, but since 2008 stopped funding many of those groups and has been much more open about the risks posed by both global warming and public policies meant to fight it.

Coming just ahead of a major, U.N.-sponsored climate change summit in Paris next month, news of the Exxon investigation has cheered climate activists, who have long been frustrated by what they see as a concerted effort by big oil and coal companies to belittle climate science and the role their own products played in causing climate change. The new state investigation, according to the Times, will focus on whether Exxon fully informed investors of the financial risks posed by a world forced to wean off of fossil fuels.

What’s ironic about the investigation, which could be joined by attorneys general in other states, is that big oil companies for years have had to incorporate a warming world into their own internal corporate projections, whatever they told the public at large. Rising temperatures and melting ice affect oil exploration in the Arctic, for example, while hurricanes, whose frequency and intensity can vary with a warming climate, are a major threat to oil rigs in the Gulf of Mexico. At the same time, many state and federal policies meant to fight climate change have a direct impact on the oil business, from carbon taxes and cap-and-trade schemes to tougher fuel-economy standards for automobiles.

For long-term planning purposes, Exxon, like most other big oil companies, puts a price tag on each ton of carbon dioxide released into the atmosphere. That lets the companies better determine which investments will be most appealing years and decades into the future. Exxon’s internal price on carbon is about twice as steep as the price proposed by the Obama administration.

Photo credit: BEN STANSALL/AFP/Getty

Keith Johnson is Foreign Policy’s global geoeconomics correspondent. @KFJ_FP

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