comm-appendix-support-cross

5 February 29, 2016
The 2014 Report addresses two key points: (1) it assesses the reasonableness of a 2
degree target considering the need to satisfy global energy demand and the likelihood that the
world will take the dramatic, immediate policy and regulatory steps and incur the resulting
significant economic burden that would be required to achieve the 2 degree target with current
technologies: 6 and (2) assuming one possible 2 degree scenario, using a reputable independent
forecast (the International Energy Agency 450 PPM Scenario), the Company demonstrates iii the
2014 Report on pages 11-12 and the associated graph, 7 the world's continued need for
significant investment in hydrocarbon energy sources. By example, the graph demonstrates that
even under a 2 degree scenario, absent significant new investment in hydrocarbon resources, by
2030 demand for hydrocarbons will exceed supply by almost 50%:
the Company's Outlook for Energy is updated annually for the key building blocks that
underpin energy supply and demand, including developments in climate policy. This annual
analysis has led the Company to incorporate a proxy cost of carbon due to the likelihood of
government policies that will impose an additional cost on carbon. As indicated above, the
Company's assessment of carbon policies in the Outlook for Energy are consistent with the
cumulative commitments made in the Paris Agreement and its. 2 degree target. The Company
uses the proxy cost of carbon in relevant long-term investment decisions to ensure the resiliency
of its investments. An important element of the Outlook for Energy and the Company's
investment planning is to "stress test" the Company's demand projections and investment
economics to understand and test critical variables that can materially impact the outcomes;
This is further described in the 2014 Report on pages 16-18.
In short, the 2014 Report concludes that, even if a 450 PPM/low carbon scenario were to
occur, the Company's publicly available Outlook for Energy 3 demonstrates that there will be
sufficient demand for the carbon-based energy the Company plans to produce between now and
2040.
Page 8 of the Proponent Letter states that "the Company is merely being asked to use
the same tools it used to forecast demand and price through 2040 to develop ah alternative
scenario consistent with the agreement reached by 196 nations to address the global problem of
climate change." The Company has fully met this request. Page 49 of the Company's 2016
Outlook for Energy report, an earlier version of which provided the basis for the 2014 Report,
demonstrates that the Company has taken into account the commitments of the parties to the
Paris Agreement in analyzing the effects public climate change policies are expected to have on
the global demand for energy before 2040. In fact as noted previously the Company's projections
for emissions reductions in the most recent Outlook for Energy are at least as aggressive as the
intended reductions. This is additional evidence that the Company has already substantially
implemented the essential objective of the Proposal, which itself (incorrectly, as discussed
above) referred to the Paris Agreement as a stand-in for a 2 degree scenario.
a
Commitments from the Paris Agreement demonstrate this latter point, which, based on several
independent assessments, is consistent but less aggressive than the Company's most recent Outlook for Energy
as discussed in more detail in this letter.
' h!!D //cdn.exxohmQbi! com/~'mediaf'a!obal/files/en5iav-3nd-erivironm5r.t/reDort—energv-and-carbbn—
manaaihQ-the-nsks.pdf.
8
See page 7 at http://Gdh.exxonmobil.eom/~/medi3'qiobal/tiles/outldok-for-enerav/ZOI 6/2016-outlook-toranefav-otif.
See also hiiD'//corDorate.exxonir.obil.com/en/cunrsnl-issu°sfclirria'e-Do!iGv/cl!rria:epersbectives/manaaind-ciiniatg-chanbe-business-risks.
#10353541VH
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