A fox whispering in your ear: corporate solutions to climate change

No industry, especially one as powerful as the fossil fuel industry, is going to allow governments or international bodies to tax or trade it out of existence.

Joanne Knight
29 July 2014
fossil fuel.jpg

Flickr/Don Hankins. Some rights reserved. 

Once upon a time a silly duck wanted a not-so-silly thing: to protect her eggs from the farmer’s wife. Unfortunately Jemima Puddle-Duck listened to the advice of a fox. In much the same way the UN and national governments have invited corporations to set the agenda for measures to address climate change.

The latest episode in the climate change fiasco is the repeal of the carbon tax in Australia. The political machinations reveal the paradoxical nature of market-based solutions to climate change. As a tax or emissions trading scheme drives up the price of carbon and demand for these products decreases, energy companies and the fossil fuel industry fight back, legally, politically and through the media, to maintain their profits. A purely economic solution ignores the political weight of corporate economic players in a democratic system.

One of the key players in the Australian government’s repeal of the carbon tax was Clive Palmer, a mining magnate. The government required his support to pass the Bill. He played some silly games with amendments, trying to appear to be the man of the people that he campaigned on. Ultimately he was not going to act against the best interests of his own company or industry.

Philip B. Smith and Manfred Max-Neef argue that the free-market economic system operates to preserve class power structures and to protect the privileges of the wealthy. The central tenets of Hayekian economics are freedom and competition; Milton Friedman envisioned it as an ideal economy where individuals are free to contract as equals. Smith and Max-Neef point out that this does not exist in reality. As capitalism curtails competition and encourages concentrations of power in fewer hands, it becomes increasingly difficult to implement desperately needed reforms.

From the beginning of the international climate change response at the Rio Earth Summit, the efforts to curb carbon emissions were corrupted by corporations and the energy industry. They pushed economic solutions and self-regulation by industry and heavily opposed regulations and mandatory reduction targets. Clearly they could foresee that they would have greater control over such measures.

In the June 2014 Global Policy Forum report “Corporate Influence on the Business and Human Rights Agenda of the United Nations,” Jens Martens contends that the UN abandoned attempts at international corporate regulation at the UN Conference on Environment and Development (the ‘Earth Summit’) held in Rio de Janeiro in June 1992. A coalition of western governments and corporate lobbyists managed to get the UN Centre on Transnational Corporations recommendations on “Transnational Corporations and Sustainable Development” removed from Summit’s program of action, Agenda 21. The Conference’s Secretary-General Maurice Strong invited the newly-formed Business Council for Sustainable Development (BCSD) to draft recommendations on industry and sustainable development. Titled “Strengthening the role of business and industry” the chapter focused on “voluntary initiatives, promoting and implementing self-regulations” and “free market mechanisms.” The holding pattern established by the principle of sustainable development had been established.

We most recently observed the efforts of Business Council for Sustainable Development at COP 19 in Copenhagen last year, where the coal industry was invited as an active participant in the conference. COP19 was the first UN climate talks to have corporate sponsorship, with some huge energy companies as official ‘partners’, including Alstom, ArcelorMittal, and BMW. The Polish Ministry of Economy also teamed up with the World Coal Association to put on a parallel “International Coal and Climate Summit,” whose joint “Warsaw Communiqué” was little more than a veiled call for more coal and CCS.

The World Business Council for Sustainable Development (WBCSD) was a key organizer at COP 19. WBCSD activities at COP 19 were sponsored by Shell. Other members of the Council include BMW, GE, Bayer, and Entergy. On 15 November they hosted a high-level panel discussion focused on the “role of the GCF [Global Climate Fund] in catalysing investment into clean energy by facilitating the deployment of capital at the scale and in the direction required to stay inside 2 degrees C.” In other words, how corporations can get their hands on the GCF.

Any potential for change has been paralyzed at a national level in the US. Members of Boards of Directors of energy and mining industry companies such as Duke Energy and Walter Industries sit on the Foreign Policy Association, a key body providing advice on energy policy to the US government. The energy policy of the US is so controlled by the fossil fuel industry that even the idea of an Emissions Trading Scheme, let alone any real regulation, is unthinkable.

The absurdity of the US “all of the above” energy policy reflects the efforts of the fossil fuel industry to maintain profits and our blind faith in market solutions to all social problems. Under capitalism, this is all logical. Capital will fight for its continuation in the face of the ultimate destruction of humanity and the environment: factors far out of the corporate timelines of quarterly and annual reports.

Watching a segment from the Foreign Policy Association Future of Energy Conference in 2012, we see the fairy tales that key policy advisers tell themselves about fossil fuels. They believe they are bringing a better life to the third world, they admire the giant burn off flares from fracking operations, and they wax lyrical about the advances in technology which allow dirtier fuels to be extracted from deeper in the earth. Nowhere does the threat of climate change impinge on the fantasy world of Richard Navarre, former President of Peabody Energy, former Democratic Senator Byron Dorgan and Mary “Nina” Henderson, Director of Walter Energy.

If we reject the basic premises of free market economics then we must reject market-based solutions to climate change. Corporations as the central economic institutions of free-market capitalism will always seek to protect their continued existence and increase their power. The more influence an institution has, the more it will acquire. The fossil fuel industry has so much authority that applying indirect economic strategies will do nothing to effect carbon emissions. We are asking the fossil fuel industry to commit suicide which clearly it will not do. It is a fantasy that the oil and coal sector will die out if we put a price on carbon.

The fossil fuel industry must be removed or circumvented as a player in climate change solutions. Market solutions are ridiculous. No industry, especially one as powerful as the fossil fuel industry, is going to allow governments or international bodies to tax it or trade it out of existence. It reflects our blind belief in the efficacy of markets to provide efficient solutions. We have been sold this bill of goods for twenty years now. Are we really as stupid as Jemima Puddle-Duck following the advice of foxes to our doom?

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