Shell chief: Business must account for cost of climate change

Ben van Beurden says industry, regulators should rally behind Shell and European oil majors’ joint call to make polluters pay

Activists paddle up to Shell's Polar Pioneer rig in Seattle, to protest Arctic drilling (Flickr/sHell No! Action Council/Charles Conatzer)

Activists paddle up to Shell’s Polar Pioneer rig in Seattle, to protest Arctic drilling (Flickr/sHell No! Action Council/Charles Conatzer)

By Alex Pashley

The head of Royal Dutch Shell urged oil majors and utilities to come on board in backing a tax on carbon emissions on Tuesday.

Carbon pricing was pivotal in reversing the world’s reliance on fossil fuels and combating climate change, Ben van Beurden told an oil industry event in London.

The Anglo-Dutch company joined five European energy giants in endorsing a carbon price in June, writing an open letter to Christiana Figueres, the diplomat steering UN climate talks set to sign off on a new global climate pact in December.

“By taking the cost of tackling climate change and air pollution into account, carbon pricing will drive the right behaviour of both consumers as well as producers,” said van Beurden in an address to energy ministers and oil executives at the Oil and Money summit in London.

“The world needs to start applying them quickly and without delay.”


The chief of Shell, which internally prices carbon at $40 a tonne, said pricing would spur producers to ditch coal for natural gas and would make it easier for renewable alternatives to compete on price terms.

Over 40 governments and 20 countries are now pricing carbon according to the World Bank, but that covers a mere 12% of global emissions.

The world must “broaden” the coalition from the domain of oil and gas companies to utilities, regulators and academia, he said.

The Shell chief said US oil majors such as Chevron or Exxon Mobil, which declined to follow their European counterparts’ lead, “had their reasons” but the group had to move forward to send a signal before the December summit in Paris.

Greenpeace dismissed van Beurden’s call as a “costly distraction” from the measures needed to curb emissions.

“While it appears progressive, the devil is in the detail,” said campaigner Charlie Kronick.

“The oil industry’s support for climate action appears conditional on those actions having zero impact on its core business or its plans for unchecked expansion.

“By calling for carbon pricing, Shell’s actually suggesting we wait around for 190 countries to agree on a coordinated approach before taking action, which would take more time than we have left to tackle climate change.”

Report: Shell stops Arctic drilling ‘for the foreseeable future’

One of the world’s largest publicly listed companies, Shell has come under fire for its $7 billion high stakes gamble on Arctic drilling and membership of fossil fuel lobby groups, a subject that was not mentioned in today’s question and answer session.

Last month it was kicked out of a climate group sponsored by the Prince of Wales.

Still, van Beurden has emphasised its commitment to tackling warming, lending its support to a clean energy venture, the Energy Transition Commission.

Last month, he said solar was the “backbone” of the future energy system, though predicted fossil fuels dominating for decades.

In spite of tumultuous oil markets, which have plummeted on a supply glut and which Shell see subdued for the short term, prices will rebound eventually, he said.

“In the long run I see no change to fundamental drivers to the oil market.

“There are more people on this planet, more living in cities, more buying their first car or refrigerator. The demand for energy including demand for oil is likely to grow.”

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