Our business decision-making process consistently integrates climate change issues to help us effectively manage greenhouse gas (GHG) emissions and further the company's commitment to be an efficient, low-cost producer of oil and gas and commodity chemicals. Efforts to mitigate or adapt to climate change while maintaining reliable, cost-effective energy supplies present both challenges and opportunities for society and for Occidental. Our longstanding policy is to seek continuous improvement in resource recovery, conservation, pollution prevention and energy efficiency. As a result, we integrate climate change issues into our business decisions through a team of managers and employees, with oversight from the Board of Directors' Environmental, Health and Safety Committee.
There is an ongoing effort to assess and quantify the effects of climate change and the potential human influences on climate. Occidental recognizes the importance of economic and policy assessments taking place in many countries and among international organizations related to climate change, including the agreement reached in Paris in 2016 to set a goal of limiting global warming to less than 2 degrees Celsius (°C) compared to pre-industrial levels.
The U.S. federal government has adopted legislation, regulations and policies that seek to control or reduce the production, use or emissions of GHGs, to control or reduce the production or consumption of fossil fuels, and to increase the use of renewable or alternative energy sources. The U.S. Environmental Protection Agency (EPA) has a program that requires reporting of GHGs from certain facilities and has begun to regulate certain GHG emissions from both stationary and mobile sources. A discussion of risks relating to concerns about climate change can be found in Item 1A of Occidental's Annual Report (Form 10-K).
The existing federal and state programs have not had a significant impact on the company, but concerns about climate change may affect Occidental's operations. Considering the uncertain outcome and timing of other proposed international, national and state GHG measures, it is difficult to predict their specific business impacts. However, Occidental could face risks of delays in development projects, increases in costs and taxes, and reductions in the demand for and restrictions on the use of its products, as a result of ongoing GHG reduction efforts.
We believe any approach to regulating GHG emissions should be holistic, and Occidental does not support efforts that regulate some sectors while omitting others. Local programs that focus on a particular state or region have inherent limits in their ability to affect any human-induced climate change. Furthermore, such approaches may conflict with one another and are inherently cost-inefficient. Whether to impose mandatory GHG emission controls in the U.S. is a decision that should be legislated by U.S. Congress based on informed science, after due consideration of the social and economic costs and consequences of a particular course of action.
International Climate Policy and Regulatory Action
Governmental efforts to mitigate or adapt to climate change - including the Paris Agreement signed in April 2016 - while maintaining reliable, cost-effective energy and fuel supplies for society present both challenges and opportunities. In accordance with the rules and regulations of the Securities and Exchange Commission (SEC), Occidental provides disclosure of the risks posed by climate change and climate change regulations on its business and operations in its Annual Report on Form 10-K. Occidental also reports on the process used to estimate reserves. This includes economic feasibility at the prevailing commodity prices; changes in proved reserves, including downward revisions of previous estimates due to changes in economic conditions; and provides an Industry Outlook section that identifies factors influencing the price of Occidental's products. The process includes consideration of the actions of governments, such as actual or proposed international, national and state GHG controls and fiscal measures.