Demand-side emissions reduction efforts are required for climate goals to be achieved because supply-side constraints alone would be ineffective in reducing global emissions. Our advocacy efforts are aligned with our focus on reducing Scope 1 and Scope 2 emissions and supporting sensible policies that reduce Scope 3 emissions. ConocoPhillips believes a well-designed pricing regime on carbon emissions is the most effective tool to reduce GHG emissions across the global economy and, in particular, to address Scope 3 end-use emissions. We continue to advocate for policies aligned with our carbon pricing principles as well as effective and efficient regulatory actions.

A revenue-neutral carbon tax that is transparent, predictable and cost-effective to administer would be an effective policy option. It should result in some relief via the elimination of other laws and regulations aimed at reducing or controlling carbon and other GHG emissions. It is also the best way to regulate methane. Carbon pricing policy should support the implementation of currently economic emissions reduction projects and provide support for innovation to encourage the development of currently uneconomic projects. A price on carbon would also provide a stable and predictable market signal that would impact investment flows and end-user choices in a manner that minimizes adverse local economic and social impacts related to future energy demand.

Building on our history of constructive engagement related to the issue of end-use emissions, we continue to devote significant time and effort advocating for a well-designed federal price on carbon directly through engagement with government legislators and regulators in all jurisdictions in which we operate, and indirectly via collaboration with trade associations that are aligned with our strategy.�

To advance our position, ConocoPhillips joined the�(CLC) in 2018 as a Founding Member. Since joining the CLC, our Executive Leadership Team and Government Affairs staff have participated in well over 100 bipartisan meetings with members of Congress and the administration.

We support and are advocating for a carbon price contingent upon four pillars: a gradually increasing carbon price, carbon dividends for all Americans, border carbon adjustments and regulatory simplification. We also recognize the policy trend in the U.S. toward a regulatory approach, and we advocate for effective and efficient regulations and legislation to advance economic incentives and reduce GHG emissions. We continue to seek opportunities to advocate for additional policies aligned with our carbon pricing principles, including a carbon dividends plan.

In 2021, ConocoPhillips was accepted as a Private Sector Partner within the Carbon Pricing Leadership Coalition (CPLC), a global voluntary partnership run by the World Bank to share and expand the evidence base for effective carbon pricing policies. Participation in the CPLC further demonstrates our commitment to carbon pricing and is complementary to our engagement with the CLC.

Since 2022, we have also worked closely with members of the Business Roundtable (BRT) and the American Petroleum Institute (API) to engage with the Voluntary Carbon Markets Initiative (VCMI), a platform for encouraging participation in a voluntary carbon market. Through BRT and API, we worked with the architects of the VCMI to develop an inclusive framework and create space for future dialogues as carbon markets develop

Global principles for country-specific carbon tax legislation 

• ·¡³¦´Ç²Ô´Ç³¾²â-·É¾±»å±ð:â€�A carbon tax designed to fix and impose a price should apply as broadly across the economy as administratively practicable.
• ±·´Ç²Ô»å¾±²õ³¦°ù¾±³¾¾±²Ô²¹³Ù´Ç°ù²â:â€�GHG emissions alone should form the basis of taxation. A carbon tax should not “pick winners and losers” among industries or emissions sources or discriminate in providing subsidies to energy sources.
• ±«²Ô¾±´Ú´Ç°ù³¾:â€�A carbon tax should apply to all GHG emissions at the same rate on a “units of carbon dioxide equivalent” basis using the IPCC standard 100-year global warming potential.
• °Õ°ù²¹²Ô²õ±è²¹°ù±ð²Ô³Ù:â€�To most efficiently incentivize changes to consumer behavior, a carbon tax should be imposed at the point in the value chain which is as close as administratively practicable to the point and timing of the emission. If a point is chosen further upstream, a system of credits or other mechanisms should be designed to eliminate (or prevent) taxation of emissions applicable to taxable products sequestered downstream of the point of taxation and to those used as feedstocks for the manufacture of products in which GHGs are stored.â€�
• Avoid double taxation:â€�A federal carbon tax should preempt state, provincial and local carbon taxes and renewable production tax credits.
• Provide regulatory relief:â€�A federal carbon tax should replace all environmental laws and regulations that are intended to reduce or control carbon and other GHG emissions.
  Predictable: The application of a carbon tax and the tax rate may be adjustable when necessary, but such adjustments should be infrequent and should be limited to those designed to achieve the broader environmental goal of the tax legislation.
• Cost-effective administration:â€�Existing channels of tax collection and emissions reporting systems should be used if feasible. Where actual emissions cannot be measured, best efforts based upon sound science should be used as an estimate.
• Globally competitive:â€�A country-specific carbon tax rate should be set in accordance with existing taxation channels and emissions reporting systems and be adjusted to ensure global competitiveness. Depending on the point of taxation chosen, carbon tax legislation should include a border adjustment mechanism or other attributes designed to mitigate competitive disadvantages to host country industry when competing in global markets.
• Revenue recycling:â€�A carbon tax should be revenue-neutral and used in such a way as to minimize economic impact.
• Compliance flexibility:â€�A federal carbon tax should include multiple options for compliance, including offset credits from a broad range of jurisdictions, cash payments or flexible compliance frequency.