This Is How an Oil Giant Uses Internal Carbon Pricing
View on ClimateWire website"Joe Kruger, a visiting fellow at the nonpartisan Resources for the Future, said using proxy costs is often smart business.
'It's kind of viewed as due diligence,' Kruger said of proxy costs generally. 'The last thing I think you'd want if you're an energy company, or that you should want, is to build a project that has large additional costs that you didn't count on at the planning stage.'"
"Analysts who study proxy costs say companies implement them differently. It's often unclear how the costs they use filter into their operations. Firms are cagey about where the cost goes. Does the proxy price apply to the emissions of a lone rig or to all knock-on emissions released because of that rig?
Companies often don't say. 'Different companies do different things,' Rob Williams, a senior fellow at Resources for the Future, said by phone. 'It's hard to pin down.'
Just as they estimate what gas and oil prices will be, firms try to project what carbon prices will be.
'What they want to do is think about the likely price,' Williams said."
