As many industrial companies look to reduce their carbon emissions and reach net-zero goals, Trump’s anti-climate change policies could bring upheaval to these efforts, warned Darren Woods, chief executive officer of Exxon Mobil Corp. at the UN’s COP29 climate conference on Nov. 12.
During his first term as president, Trump withdrew from the Paris Agreement, an international treaty aimed at limiting the effects of climate change worldwide, which Biden immediately rejoined when he became president. Biden then followed up with the 2022 Inflation Reduction Act (IRA) to spur investment in green energy, a move Trump has promised on the campaign trail to repeal and again called for withdrawal from the Paris Agreement. Exxon Mobil, the top U.S. oil producer, was among the companies that unsuccessfully discouraged Trump’s move in 2017.
“The way you influence things is to participate, not to exit,” Woods said in an interview. Just as the incoming administration is seeking to drive “common sense” in domestic policy, Woods stressed it can “try to drive a similar level of common sense” internationally that balances emission reductions with the need for affordable energy.
For its part, Exxon Mobil has been working to meet the goals of the Paris Agreement through investments in alternative energy and green energy technologies. These carbon emissions reduction investments, while in line with the Biden administration's IRA, contradict much of Trump’s campaign focus of "drill, baby, drill."
As a result, Woods has voiced support for the IRA, which includes incentives for carbon capture, green hydrogen and sustainable aviation fuel production. “We think the IRA makes sense,” Woods told the Bloomberg Zero podcast at COP29. Woods added the IRA stands out for how some of its credits focus on the goal of lowering carbon intensity. “The advantage of the IRA was it focused on outcomes,” thereby allowing companies and the market to figure out how best to meet them, he said.
He also cautioned the short-term, drastic shifts in each administration's policies impact oil producers with long-term investments, suggesting that current climate change policies should continue without significant changes.
