Energy & Environment

Is demonizing ‘big carbon’ a strategy or a cop-out?

Severin Borenstein

Are we really being tricked, bullied or seduced into burning fossil fuels?  That seems to be the message behind two arguments made recently by prominent advocates for climate action: we should blame the producers of fossil fuels for the failure to make progress on reducing greenhouse gas emissions.

The Union of Concerned Scientists made a splash last week publicizing new research that traces at least 63% of the GHG released since 1751 back to 90 companies.  In case you missed what you are to make of this finding, the UCS article says “And I bet you already know who’s most responsible — Chevron, ExxonMobil, and Peabody Coal are all among the top producers, along with state-owned organizations such as Saudi Aramco. This new research can be a game changer in our efforts to reduce global warming emissions…”

polar bear on thinning ice

(iStock)

Really?  If those evil fossil fuel companies would just stop producing their energy poison, the problem would be solved?  Of course, if they did greatly reduce their production, the cost of gasoline, heating oil, electricity and natural gas would soar.  How would consumers respond?  I bet it wouldn’t be with a collective “thank you.”  In fact, consumers (and government agencies) seem a lot more concerned that energy prices are too high already than that companies are producing abundant fossil fuels and keeping prices too low.

The UCS media push is just feel-good advocacy that obscures the fundamental problem: fossil fuels are cheap.  Individually we each like to have cheap energy, but collectively the impact of burning all those fossil fuels may be devastating to the earth’s climate and its inhabitants.

Even if UCS doesn’t get this, it appears from the comments on their Facebook page that readers do.  Many of the contributors identify themselves as supporters of UCS, but say that the real problem is us, the people who buy all those products that big carbon produces.  They’re right.  It’s just a cop-out to blame the producers of products that we have demanded, and benefitted from, for more than a century.  We haven’t been misled or forced into buying those carbon-rich goods. [Late Addition: The Onion made this point nicely a couple weeks ago in their own story.]

I am sympathetic to the concern that some of those big carbon companies have financed and touted the junk science that has been used to undermine climate change policies.  But that’s not all of them and that’s an issue quite apart from their role in producing fossil fuels.  Any supporter of junk climate science deserves our scorn, whether they are producers or consumers of fossil fuels.

At first glance, the UCS approach may not seem that different from the movement for divestment of financial interest in fossil fuel companies.  Divestment has gotten some traction at Berkeley where there is an online petition for members of the community to demand UC end its investments in big carbon businesses.  My Berkeley colleague, Professor Dan Kammen, last week championed it in an op-ed in the campus paper.

Kammen doesn’t present this as shaming, but as a moral imperative not to have a financial stake in burning more fossil fuels.  I get that, though there is an obvious inconsistency when we refuse to be investors in these companies, but steadfastly remain their customers by driving, flying, heating and electrifying our lives with fossil fuels, and consuming products that do the same.  Using less fossil fuel energy is what will actually reduce greenhouse gases.

Earth

NASA photo

What will divestment do?  Probably nothing at all.  There is a big financial world out there that will seamlessly substitute for our capital if we refuse to invest in these companies.  The South Africa divestment movement had impact in the 1980s only when a large share of the financial world bought into the cause.  That seems very unlikely to happen in the case of fossil fuel companies, especially when we continue to be their best customers.

But what if divestment spread enough to make it harder for the dirty-200 (the companies that the petition targets) to access funds, effectively raising their cost of capital.  That would lead them to invest less in finding and producing fossil fuels.  Less investment means lower supply, which would cause energy prices to increase.  And that would reduce the quantity of fossil fuels burned.

But wait! If that’s where we’re going, there is a much more direct and satisfying route:  a tax on greenhouse gases.  The tax would make it less profitable to sell dirty energy and less attractive to buy it.  And here’s another big advantage: if divestment were to lower supply and raise prices, the extra money would go to energy company shareholders.  When a carbon tax reduces supply and increases price, the extra money goes to the government coffers, where it can be used to invest in alternative energy or to lower regressive levies like the payroll tax.

Some may say that there just isn’t sufficient support for a tax on GHGs.  Maybe, but it seems more likely than divestment to have a real impact on the production of fossil fuels.   Perhaps a divestment petition has greater symbolic value than fighting for a GHG tax – it certainly identifies tangible “enemies” in the fight — but a GHG tax would do more to actually address climate change.

Symbolic actions have their place, I suppose.   At this point, I’m not opposed to divestment, but indifferent. (See Rob Stavins’ blog post a couple months ago for a slightly different take on divestment at Harvard.)  Still, to the extent that it takes organizational energy away from the real changes we need to make in order to reduce GHG emissions – on both the demand and the supply side — it could do more harm than good.

So, to fellow members of the UC community, I say sign the petition or don’t, but then quickly return to the important matters of creating science and policy changes that can make a real difference to the climate.

Cross-posted from Energy Economics Exchange (tag line: Research that Informs Business and Social Policy), a blog of the Energy Institute at Haas.

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Comments to "Is demonizing ‘big carbon’ a strategy or a cop-out?":
    • Andy Hultgren

      It seems to me that this post largely assumes away the political process in policy-making.

      If designing good policy were a necessary and sufficient condition for addressing climate change, then I would agree that any reduction of resources from that policy-design effort would be counterproductive. However, that is clearly not the case.

      Given that sensible climate policy threatens one of the most powerful, wealthy, and politically entrenched industries in the world, it should not come as a surprise that substantial political barriers stand in the way of adopting sensible climate policy.

      What, then, is the point of criticizing “symbolic actions,” which clearly have as their primary objective the political mobilization of the U.S. electorate? Are we to believe that, if the right policies or technologies are developed, the political barriers will just evaporate? The fossil fuel industry will happily relinquish its position of wealth and power?

      Further, I take it as a given that not all people have the training or inclination to design policy or develop clean-energy technology. I additionally take as given that some people have the training and inclination to organize the public for political action.

      Does it not make sense to support those whose training and inclination leads them to political organizing, instead of criticizing them for not participating in activities where they lack both expertise and inclination? (I am assuming here that the divestment campaign personnel is not composed primarily of policy analysts and clean energy researchers, though given the gravity of the political fight, I could well make a stronger argument particularly in support of any time spent by the policy community.)

      Finally, what is the point of criticizing those involved regarding their current consumption of fossil fuels? We live in an economic infrastructure dependent on fossil fuels, and opting out comes with extremely high barriers. Is Borenstein’s implied argument that we should leave the political organizing until after a carbon tax has been enacted? That seems just a little backward to me.

      I feel that none of these points is particularly insightful; all seem obvious (though I am happy to be shown the error of my ways). Yet, this post seems to have largely missed them.

      Am I missing something here?

      Respectfully,

      Andy Hultgren
      MPP Candidate, 2015
      Goldman School of Public Policy
      UC Berkeley

      [Report abuse]

    • pabelmont

      The problem is not the companies (large corporations, together, seem to run the USA and most of the world, as a sort of extra-national “oligarchy” or “Establishment” — but this is a general problem which explains more than our failure to address climate change).

      The problem is political. The government must, first, break free of corporate control (not a small matter, indeed). The government must educate the peoiple and the media to take climate change VERY, VERY seriously — and not as a problem for some other century.

      And then we must do massive system-wide engineering so that we can gradually but quickly replace fossil-based energy with either “green” energy or NO ENERGY (go without). Fossil-fuels must be cut as COLD-TURKEY as possible, and that requires a lot of EDUCATION.

      So, no, don’t blame the corporations.They are part of the “system” and play by the rules (to increase short-term profits).

      Not the corporations’ fault, but our peril.

      [Report abuse]

    • Avi Rosenzweig

      Like most of the people working on these issues, Director Borenstein is slowly making the shift from real solutions to accommodation and co-optation.

      We see the numbers, and we see how intractable our political institutions are, and this wears down even the most high-minded among us.

      Back when Microsoft first inflicted Windows 95 on the public, a catchphrase became popular that expressed the inevitability of Windows’ domination:

      “It’s not a bug, it’s a feature.”

      The climate-change community is now entering this phase of thinking –
      species diversity will change (rather than suffer) ; agricultural production will shift (rather than suffer) ;
      consumption patterns will adapt (rather than ramify) ; there will be new winners, not just losers (Hello, Canada!) ; and so on.

      Nudging the market in a particular direction is a weak, pessimistic way of trying to get a handle on pervasive problems, but researchers and administrators spend so much time around economists and data that their favorite hammers narrow their perceptions to a small range of nails.

      Borenstein concedes the socio-cultural damage done by specific companies through propaganda/ junk science, but then overshadows that tractable area of potential action with more ‘we’ve met the enemy and they are us’ breast beating. Aren’t there efficient wins to be won by policy and legislation that curtails big companies’ ability to spread big lies? Market solutions can be more universally effective, certainly, but pointing a finger at particular boards of directors can have good results, too.

      Consider the case of quaaludes — they became a problem, and the problem was solved, not by appeals to demand-side morality or by gamifying the market or by incentivizing alternatives, but by regulating the producers, and controlling the key ingredients.

      Suppose the small number of pharma firms in the ’70s had funded a full-court press about methaqualone, insisting that we be ‘realistic’ about people and their habits — folks are going to get high, why shouldn’t we benefit from it? What’s the response of the academic community to that line of reasoning?

      The UCS campaign is in that realm of action — a response that takes into account that there’s more to human interchange than economic models.

      [Report abuse]

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