Global Warming: How Big Business Controls the Debate

Delegates from around the world are preparing for December meetings in Kyoto, Japan to finalize an agreement limiting emissions of greenhouse gases. But industry associations representing large producers and users of fossil fuels are gearing up for a massive advertising campaign, intended to convince the public and policy makers that an emissions treaty would be an economic disaster. Despite an emerging consensus among scientists that higher atmospheric levels of gases such as carbon dioxide are gradually warming the earth's climate, raising sea levels and causing more extreme weather patterns, many businesses seem more concerned with the threat to their bottom lines than with the environment. Yet some other companies believe that they can profit handsomely from controlling emissions. In July 1996, the United States reversed its long-standing opposition to mandatory international controls on greenhouse gases, but made clear it would only support modest cuts with long time frames. The Clinton administration's statement sought to assure business that any measures would not be "economically disruptive" and would employ "the genius of the private sector" to find "market-based solutions that are flexible and cost-effective." One of the most powerful lobbies opposing action on global warming is the Global Climate Coalition (GCC), which represents more than 50 companies and trade associations in the oil, coal, utility, chemicals, and auto industries. These industries stand to lose out if curbs are placed on fossil fuels, and so the GCC has spent nearly $1 million a year to convince policy makers that proposals to limit CO2 emissions "are premature and are not justified by the state of scientific knowledge or the economic risks they create." Political action committees (PACs) sponsored by members of the GCC have contributed millions of dollars to congressional candidates. The GCC has participated in efforts to challenge the scientific predictions of global warming, and has commissioned several reports that emphasize the economic costs of measures to address climate change. The Global Climate Information Project, whose sponsors include the National Association of Manufacturers, Air Transport Association of America, National Cattlemen's Beef Association and United Mine Workers of America, says it already has spent $3 million on a campaign against the treaty, and its spending could exceed $13 million over the next few months. The Project warns of a "50-cent-per-gallon gasoline tax and higher prices for everything from heat to food to clothing." Nearly 2,000 respected scientists from around the world concluded in a 1996 report commissioned by the United Nations that human activity was contributing to global warming. But the GCC and the Climate Council, another association representing oil and coal interests, claim that Drs. Benjamin Santer and Tom Wigley, the two lead authors, deleted passages that dissented or expressed uncertainty. While these efforts to discredit the science of climate change have fallen flat in the international negotiations, they have had a powerful impact in the United States. In a series of congressional hearings in 1995 and 1996, the testimony of a few "climate skeptics," several of whom receive funding from industry, created the impression of considerable scientific uncertainty. After one of the hearings, Dana Rohrabacher from California, Chair of the House Science Subcommittee on Energy and Environment, derided climate change research as "liberal clap trap," and was instrumental in cutting funding for further research. Western Fuels, an association of U.S. utilities, has even claimed that climate change is good for the environment because "CO2 fertilization of the atmosphere helps produce more food for people and wildlife." This association spent about $250,000 to produce a video in 1991 called "The Greening of Planet Earth," which was apparently influential in the Bush administration. The Clinton administration's recent announcement that it would support mandatory emissions limits generated an outburst of indignation from the Global Climate Coalition. But the new U.S. policy reflects emerging common ground in business sectors that are less directly t new technologies and products in developing countries. Compared to the GCC, however, the BCSE comprises relatively small companies in fragmented industries, so its political leverage is limited. Perhaps more instrumental in turning around the U.S. positi world, which already accounts for an estimated 45 percent of total greenhouse gas emissions, has been firmly opposed to any agreement. They believe that the rich countries are primarily responsible for existing carbon dioxide levels, and that cheap energy is needed to fuel growth. China, with one-third of the world's proven reserves of coal, relies on coal for around 80 percent of its energy needs and plans to expand its coal production fivefold by 2020. Brazil, Indonesia, and Malaysia, home to much of the world's tropical rain forest, have expressed concern that a treaty might limit their ability to log and export timber, or to clear land for agricultural use. In Europe, France has been relatively supportive of emission controls because it already obtains more than 60 percent of its electricity from nuclear plants, and hopes that controls on fossil fuels might spur exports of its nuclear technology. Germany, the strongest European advocate of strict controls, has been rapidly reducing its dependence on coal due to concerns about acid rain and the cost of coal subsidies, which exceeded $4 billion a year in the 1980s. Germany has been able to reduce emissions by closing inefficient plants in the former East Germany, and possesses a relatively strong renewable energy sector. The United Kingdom followed the U.S. position against controls until the early 1990s. But then-Prime Minister Margaret Thatcher, not generally known for her dedication to the environmental cause, used the climate change issue to justify the wholesale closing of coal pits. In the process she undermined the National Union of Miners, one of the last bastions of radical unionism in the country.As Kyoto nears, the international community is looking to the United States, the world's largest emitter of greenhouse gases, for leadership. Environmental groups are also gearing up for a fight. The U.S.-based group Ozone Action has been publicizing the corporate links of the "climate skeptics" and a coalition of environmental groups is planning its own advertising campaign with the theme "This weather report is brought to you by a major corporation." Bill Clinton, meanwhile, has refused to commit to any specific reduction goals, and appears reluctant to move without the assent of two key industries, oil and automobiles. That's industrial democracy at work. David Levy teaches at the business school of the University of Massachusetts-Boston and is a Dollars & Sense Associate. Resources: The Heat is On, Ross Gelbspan, 1997; Climate Action Newsletter (produced by a coalition of environmental groups), available on the web at; "Business and International Environmental Treaties," David L. Levy, California Management Review, Vol. 39, No. 3, Spring 1997.


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