Clement B Malin Vice President International relations April 17th 1997 Mr Thilo Bode Greenpeeace International Keizersgracht 176 1016 DW Amsterdam The Netherlands Ms Barbara Dudley Greenpeace USA 1436 U Street, NW Washington, DC 20009

2000 Westchester Avenue White Plains NY 10650 914 253 4724

Dear Mr Bode and Ms Dudley

Your letter of April 4, 1997 to Texaco inquired of our views on climate change.

Texaco has followed the issues surrounding potential climate change since well before the United Nations Conference on Environment and Development, held in Rio de Janeiro in June 1992, which resulted in the Framework Convention on Climate Change (FCCC). We have participated, either directly by company representatives or indirectly through industry associations and coalitions, in virtually all of the meetings of the Intergovernmental Panel on Climate Change (IPCC) and the FCCC, as well as a host of conferences, workshops, symposia, and fora over the last decade. Among other leadership roles, we presently serve as Head of Delegation of the International Chamber of Commerce (ICC) to the FCCC.

Texaco views the issue of potential climate with interest and concern. We take our responsibilities with respect to the environment with great seriousness, as is reflected in the enclosed Environment, Health and Safety Review.

The issues of potential climate change, as you recognize, are varied and complex. Texaco's policy views are derived from the importance that we attach first, to continuing scientific research; second, to analysis of economic and social impacts of both potential climate change and potential response options, including adaptation; and third, to development and dissemination of both current and emerging technologies which support energy efficiency and conservation, as well as the efficient use of all resources. These key principles do not uniquely apply to potential climate change, but they guide our views on the global issues comprising sustainable economic growth and environmental protection and enhancement.

With respect to current negotiations within the FCCC that are to culminate in Kyoto in early December 1997 with consideration of adopting "a protocol or another legal instrument," we offer the following:

• We believe it is premature to adopt legally binding commitments to reduce greenhouse gas emissions. Continued scientific research will provide greater understanding of many important elements. Economic analysis of impacts of possible response options is woefully inadequate and requires attention.

• Notwithstanding these concerns, we continue to support programs and initiatives of governments and industry which are often referred to as "low regrets," and "voluntary and negotiated agreements." These programs, which are both ongoing and expanding, capitalize on market drives and creative innovation that fuel industry investment.

• The issue of potential climate change is both a global and long-term challenge. The Berlin Mandate negotiations specifically provided that non-Annex 1 countries (i.e., so-called "developing countries") would not be required to undertake new commitments. This in the face of the projection that most of the increase in greenhouse gas emissions in the coming century will result from expected economic growth in developing countries. Moreover, management of the climate issue will not end with Kyoto, but indeed requires our attention for decades and perhaps centuries. In this sense, Kyoto is to be viewed as a "checkpoint," one of many, that will mark the international community's efforts to address potential climate change.

• There are sound economic arguments that support adoption and implementation of options, including adaptation, other than legally binding targets and timetables. The location and timing of implementation of certain specific measures are often referred to as the "where" and "when" arguments. Other proposals that have not matured, but that offer potential benefits, are joint implementation (JI) and emissions trading.

• Underlying all our thoughts is the view that business and industry -- the fossil fuel industry included -- has a vital role to play in the public policy process. Whatever policy measures that may be adopted by governments in response to potential climate change will require the support of and implementation by industry. Industry must, therefore, and will participate in the policy process. No two national economies are the same, so it is important that continuing consultations take place between national governments and national businesses and industries, as well as with other interested parties. The stakeholders, in the final analysis, of government, business and industry, and all other activities and organizations are the same -- citizens, taxpayers, employees, customers, and members of communities and organizations.

Very truly yours,

Clement B Malin