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Shell and BP call for international carbon pricing deal

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Oil majors are pushing for scheme to limit emissions as they face growing criticism surrounding global warming

By Andrew Critchlow, Commodities editor: 01 Jun 2015

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Europe’s biggest oil companies, including Royal Dutch Shell and BP, have written an open letter calling for a binding global system of carbon trading in a bid to head off climate change critics.

In a joint statement, the chief executives of Shell, BP, Total, Eni, Statoil and BG Group said: “We need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part. We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace.”

Oil majors have been targeted in a growing campaign by activists to force institutions such as the Church of England and large university endowments to disinvest from fossil fuel producers in order to limit global warming.

The statement by the five European oil and gas giants also comes ahead of crunch UN talks scheduled for December that are aimed at creating a binding deal among world powers and emerging nations to limit global warming and emissions.

According to the so-called “carbon bubble” theory, billions of pounds worth of investors’ money becomes stranded as more fossil fuel reserves are left unexploited in an effort to reduce the impact of climate change.

“We now need governments around the world to provide us with this framework and we believe our presence at the table will be helpful in designing an approach that will be both practical and deliverable,” said the statement by the oil majors.

Despite the call by oil companies to create more robust international frameworks to govern carbon trading, in practice the system has so far proved ineffective in limiting global warming.

Last month, President Barack Obama caused controversy in the US when he claimed in a speech that global warming posed one of the biggest threats to America.

“Climate change constitutes a serious threat to global security, an immediate risk to our national security,” he warned.

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