Exxon Mobil Corp. (NYSE: XOM) said the prospect of the world reaching net zero carbon dioxide emissions by 2050 is “highly unlikely” due to the drop in living standards that would come with such a scenario.
The Texas oil giant made the comments in a regulatory filing that argued against proxy adviser Glass Lewis’ view that the cost of phasing out oil and gas operations would be a material financial risk. The International Energy Agency’s Net Zero Emissions scenario, which models a phaseout of most fossil fuels by 2050, has little bearing in reality, Exxon said.
“Glass Lewis apparently believes the likelihood of the IEA NZE scenario is well beyond what the IEA itself contends: that the world is not on the NZE path and that this is a very aggressive scenario,” Exxon said. “It is highly unlikely that society would accept the degradation in global standard of living required to permanently achieve a scenario like the IEA NZE.”
Climate pledges by governments would fall short of net zero by 2050 even if they were achieved, meaning there’s little chance of limiting global temperature increases to 1.5 degrees Celsius above preindustrial levels, according to the IEA. Exxon has a net zero “ambition” by 2050 but is investing heavily in new projects — both fossil fuels and low carbon — that it believes will provide the flexibility to respond to multiple energy transition scenarios.
Exxon urged shareholders to reject a resolution, backed by Glass Lewis, that the company should produce a report at its annual meeting on May 31 on the cost of shutting oil and gas operations that no longer are needed.
The statement comes days after the World Meteorological Organisation (WMO) said scientists are likely to record a global average temperature of more than 1.5C above pre-industrial levels over the next five years.