ExxonMobil Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Exxon Mobil Corporation Case Study Solution

As per the new amendment to the Paris Agreement 2015, the United States of America would be obligated by its Nationally Determined Contribution to abide by the amendment or face dire consequences. Keeping this new development to the international legal environment, the following analysis has been done for understanding the implications of Amendment 30 on individual firms in the US and on Exxon Mobil in particular. Relevant clauses of the Paris Agreement have been discussed in this analysis to understand areas where the US has been affected as a third Party and how the new amendment has loopholes which can be used for taking a stance in front of the Secretary of State.

Certain recommendations have been proposed specifically for Exxon Mobil Corporation as a contingency plan in case the agreement is legally imposed internationally and the US decides to take the challenge of abiding by its NDC even with Amendment 30 in place.

An analysis of the implications of Amendment 30 for the US

In the light of the Nationally Determined Contribution submitted by the US, Exxon Mobil Corporation would be directly and indirectly affected by any amendment to the Paris Agreement especially as the US has committed to covering all IPCC sectors in the NDC. The scope and coverage of the submitted NDC covers all greenhouse gas emissions and sinks, the US has committed to the removal of all these gases and emissions at a targeted rate as specified in the NDC. This makes Exxon Mobil Corporation as one of the stakeholders of this commitment.

It should be noted though that the implementation of this new form of responsibility is to be done through the collective enforcement of processes and procedures at an economic level so the entire responsibility of curbing the emission of gasses does not fall on any one individual firm or State. Given this fact, Exxon Mobil is only partly responsible for the implementation of the policy that has been declared by the US in its NDC. Since International law is to be based on the concept of collective responsibility, Exxon Mobil’s responsibility is only in terms of following the national regulations and even the US as a whole is not obligated to reducing the global emissions on its own but it has to abide by the NDC as per the Agreement.

It should also be noted that the US will be bound by any international law even if it seems rigid in terms of affecting only one party severely. Ordinary national legislation will be overridden by the international law and so if US decides to vote in favor of Amendment 30 to the Paris Agreement, it would make all of its States liable for the breach of any of the provisions in the agreement.

It should also be noted that the NDC has clearly stated that the US will be targeting an economy wide reduction of emission by almost 80% or so by 2050. This de-carbonization policy is a long term implementation plan and Exxon Mobil Corporation and should not be affected by it directly in the short run but needs to incorporate strategies in place for surviving the impact of regulations and international policies.

We will now examine the impact of Amendment 30 in terms of how it will directly affect Exxon Mobil in the short and long run before we look into the loopholes regarding what areas can be taken to the international court for asking further concessions for the economy.

The US can potentially see that no other party is disagreeing to this agreement either as the imposition of a 50% tariff would be placed on any party which does not abide by this clause. Under the obligation of international law, individual parties would be more determined to abide by the agreement in terms of imposing tariffs on the US if it breaches the Agreement rather than taking the risk of allowing imports from US to enter their country with concessions.

Analysis of Clauses in the Paris Agreement for Supporting the US Stance

As per the provisions of Article 28, the US is not eligible to even withdraw from the Paris Agreement before the year 2021. However, this means that there are still a few years in which the State can decide whether the clauses of the NDC are realistically achievable or not and can opt for withdrawal from the agreement.

It should also be noted that the proposed Amendment to the Paris Agreement has been an effort put forward by a group of European countries and has not been proposed yet keeping the US in confidence. The potential legal consequences and violation or wrongful acts in this case have been suggested by the European states in the form of this new amendment. Under this specific stance, the US has the option to vote against this Amendment as it has not been a collected effort. No clause in the Paris Agreement says that any party can include an amendment in the Agreement which would directly affect the interests of a third party without the knowledge of the latter. In the light of this stance, the US has a full right to take this matter into the international court in terms of either allowing it to withdraw Amendment 30 or to let it withdraw from the Paris Agreement on account of not being included in drafting the amendment...................

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