Exposed: How Businesses Are Undermining Efforts on U.S. Climate Committments
The following is reprinted with permission from the Center for Public Integrity.
Todd Stern received a standing ovation from fellow negotiators when he was introduced at this year's first session of international talks to craft a new treaty to combat climate change. As the new climate envoy for the United States, Stern represented the nation that had contributed more than any other to the world's burden of greenhouse gases. But for eight years the industrial leader had largely been on the sidelines as the rest of the world tried to implement the solution embodied in an agreement signed in Kyoto, Japan, in 1997. Now, Stern represented a new president who had pledged to engage vigorously in global discussions aimed at arriving at a successor treaty by December in Copenhagen. As Germany's environment minister said that March day in Bonn, the United States was "back in the game." Stern would remember that instant long after the applause had died. It was the moment, he since has joked, when perhaps he should have quit while ahead.
Since then, Stern has worked to lower expectations around the world for the kind of deal the United States is likely to accept. With only 4.5 percent of the world's population, the U.S. is responsible for more than 18 percent of global greenhouse gas emissions. Accordingly, President Barack Obama promised "a new chapter in America's leadership on climate change," following President Bill Clinton's inability to get Kyoto ratified and President George W. Bush's abandonment of the treaty altogether. But the action that the U.S. Congress is contemplating -- legislation much in line with the president's campaign pledges -- falls far short of the short-term targets for greenhouse gas emissions reductions that science points to as necessary. The legislation passed in the House, and the slightly stronger version introduced in the Senate, would only bring the nation's greenhouse gas emissions back to, or a few percent below, 1990 levels by 2020.
That contrasts with the recommendation of the Intergovernmental Panel on Climate Change, the body tasked with assessing the world scientific consensus, which has said that developed countries need to reduce their emissions 25 to 40 percent below 1990 levels by 2020 if they are to head off the worst impacts of global warming. Britain has complained about the “ambition gap” between Europe and the U.S., while India has called the U.S. goal "measly." But Stern has asked governments to be “sensitive to what is do-able in the United States.” And the evidence so far shows that what's do-able depends on the coal-fired, energy-gobbling industries -- many of them now accounting for just a small portion of the economy -- and the other special interests that dominate Washington politics.
With only weeks to go until the Copenhagen talks begin on December 7, the Senate is only beginning deliberations on the legislation meant to be the basis for the commitments the United States will make there. And senators won't be deciding anything until they hear from those denizens of the Capitol corridors -- the lobbyists. Many of them are ex-government officials and staffers and professional campaign fundraisers who now plead the case of special interests with former colleagues and legislators who are nearly constantly running for re-election. By the time the House of Representatives narrowly passed climate legislation in June, more than 1,150 companies and advocacy groups had hired an estimated 2,810 lobbyists on climate change, according to an analysis of disclosures filed with the Senate Office of Public Records. That amounts to five lobbyists for every member of Congress, an increase of more than 400 percent from six years earlier, when Congress considered its first major comprehensive climate change legislation. U.S. regulations do not require filers to itemize how much they spend on climate, but even if global warming consumed only 10 percent of their efforts, they would have spent more than $47 million on climate issues in the first half of the year.
The numbers are only part of the story. There are the expensive campaigns to gin up "grassroots" pressure on Congress, campaigns so well-orchestrated they have come to be known as "astroturf lobbying." Koch Industries, the oil and manufacturing conglomerate that is the second-largest privately held U.S. company, spent $4 million on direct lobbying so far this year. But company co-owners David and Charles Koch also are co-founders and backers of a libertarian activist group that staged a “Hot Air Tour” against “global warming alarmism” during the summer congressional recess. The group, "Americans for Prosperity," landed a giant balloon in states with key swing Senate votes like Pennsylvania, Montana, and Nebraska, and warned of "lost jobs, higher taxes, and less freedom" if a climate bill is passed.
Likewise, the American Petroleum Institute, an oil industry trade group, also sponsored anti-climate bill rallies in 20 states this summer. API President Jack Gerard urged member companies to deploy "all vendors, suppliers, contractors, retirees and others who have an interest in our success," to take part in the Energy Citizens rallies, according to an e-mail obtained by Greenpeace. The point, the message said, was "to put a human face on the impacts of unsound energy policy and to aim a loud message at those states' U.S. senators to avoid the mistakes embodied in the House climate bill." Energy Citizens, also supported by the U.S. Chamber of Commerce and a host of other businesses, has paid for a slew of advertisements opposing the bill -- including pricey air time on the Sunday morning network TV news shows avidly watched by Washington policymakers.
"They are spending tens of millions of dollars -- we can't document exactly how much because it is not public information," says Alden Meyer, director of strategy and policy for the Union of Concerned Scientists, which has worked domestically and internationally for action on climate. The business opponents' message is to disparage the “cap and trade” approach to addressing climate, in which a nationwide limit is set on the greenhouse gas emissions that come mainly from burning fossil fuels, and coal plants and other emitters are given leeway to "trade" obligations among each other depending on their varying abilities to meet the goals.
Opponents say the approach is tantamount to a fuel tax that would burden families, cost jobs, and weaken an already sagging economy. Three government analyses, including one by the Congressional Budget Office, projected that because of its generous flexibilities for business the legislation under consideration would cost households $80 to $175 per year. But opponents continued to wave their own estimates that the legislation would add thousands of dollars a year to home electricity, gas, and oil bills. And although none of the opposition TV ads or public statements challenge the idea that fossil fuel emissions are causing dangerous climate change that the world must address, there have been other efforts to sow doubt. The boldest of these was the U.S. Chamber of Commerce's request that the U.S. Environmental Protection Agency hold a "trial" on global warming science -- a move its spokesman told the Los Angeles Times could be "the Scopes monkey trial of the 21st century."
But the Chamber's move touched off a backlash. Corporate heavyweights Apple, Levi Strauss & Co., and four power companies quit the Chamber in protest. Nike resigned from the Chamber's board. And at least seven other large corporate members have said the Chamber doesn't reflect their views on climate.
Those who have been watching global warming politics are well aware of the division within the business community, and, indeed, supporters of climate legislation are banking on it to further their cause. Environmentalists have been working for years to forge a united front with businesses that would like to see Congress pass a climate law. General Electric, for instance, makes the heavy equipment for three low- or no-carbon alternative fuels for electricity: natural gas, wind, and nuclear. The company also develops technology that would help homes and businesses reduce power use. Alcoa sees increased sales of aluminum for car and aircraft manufacturers who want to increase their fuel efficiency by reducing the weight of their vehicles. Chemical makers DuPont and Dow have invested in a host of energy-saving solutions -- from biotech ethanol to fully integrated solar-power rooftop shingles. Even oil giant Shell, with its multinational interests in natural gas, sees wisdom in the United States taking climate action. "It makes sense to have a uniform law rather than 200 different ones," says Shaun Wiggins, spokesman for Shell. "We follow cap and trade in Europe, and would like to see North America fall under that. That's where we part ways with peers." Shell did not support the Energy Citizen rallies sponsored by the American Petroleum Institute, for instance, even though it is a member. "We want cap and trade. API … really doesn't see a cap as a good thing. We think nothing's perfect."
Shell, GE, Alcoa, DuPont, and Dow were among the corporations that joined with the large environmental groups Environmental Defense Fund, Natural Resources Defense Fund, and World Resources Institute in the U.S. Climate Action Partnership (USCAP). The group developed a blueprint for a U.S. climate law that was the basis for the bill that passed the House, sponsored by longtime Democratic climate action advocates California Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, and Rep. Edward Markey of Massachusetts. A senior congressional source involved in the legislative battle says it was the push from industry that propelled the bill's passage. "The strongest driver for this legislation has always been the business community," the source said. "They understand that there's a serious problem with global warming and they want to get ahead of it. Normally you introduce legislation and then you have to create a coalition to get it done. Here, we had a coalition that was ready-made that helped us get it done."
But the coalition would not have stuck together if the legislation took as hard-nosed a stand on industry as Obama, while campaigning, said he wanted it to. Obama had always said that he wanted to see polluters pay for 100 percent of the allowances that would be distributed by the government in a cap-and-trade plan. (Those are the permission slips, so to speak, that the power plants and factories need to hold to continue to emit carbon dioxide from smokestacks in a cap-and-trade plan. There is a nationwide "cap" because there are only so many permission slips, and fewer of them each year.) In the administration's original budget proposal this year, the White House estimated that revenue from sale of the allowances would raise $646 billion through 2019. But Waxman-Markey would give about 75 percent of the permits away for free to power companies and heavy industry for the early years of the program. The congressional source described this as "using the allowances as political currency to get support for the bill."
Heavy manufacturers have argued they needed the help because of the unfair competition they would face from other countries with cheap, dirty electricity if the United States took steps to clean up its energy profile. "If we can deal with cement, steel, aluminum, and oil refining -- that's where the fight is," says Ned Helme, president of the Center for Clean Air Policy, a nonprofit think tank that has been working on solutions to break the deadlock between rich and poor nations on climate. The industries that face the so-called “carbon leakage” problem are "not that big -- it's about four to eight percent of GDP in the United States -- but it's very big politically," Helme says.
And then there are the companies that generate the nation's electricity, about half of it produced by burning the most carbon-intensive and most abundant domestic fossil fuel -- coal. Without free allowances in the early years of cap-and-trade, the cost of switching to more expensive low-carbon and no-carbon alternative fuels would fall on electricity consumers, the power industry has argued. James Rogers, chief executive of Duke Energy, which serves customers in the Midwest and the Carolinas with one of the nation's largest fleets of both coal and nuclear plants, says cap-and-trade will clarify which investments make economic sense. "I've got two nuclear plants on the drawing board," he says. "Do I build them or not?" Talking to a small group of Washington reporters before heading out to lobby recently, Rogers said the deal on the allowance allocations was crucial to holding together a “fragile alliance” in favor of climate action. "I'm going to be on the Hill, and I want to help educate. And quite frankly, I don't want to spend time with senators. I'd rather spend time with staff, because I need to be in the details. People like to say ‘The devil is in the details,' but my momma taught me God is in the details."
Those very details -- the free allowances and other provisions to ease compliance for industry, plus the emissions cap for 2020 that falls so short of the global scientific panel's targets for climate stabilization -- were too much for some environmental advocates. "We don't believe this bill is going to get us anywhere near where we need to be," said Damon Moglen, global warming campaign director at Greenpeace, the most vocal of the environmental groups who criticize the bill as weak. Greenpeace leadership was so certain that an even worse bill would emerge from the Senate -- where every state, no matter how small its population or parochial its interests, counts equally -- that the group had decided not to even bother lobbying there. Instead, Greenpeace aims to urge the president to go into the Copenhagen negotiations staking out his own position independent of Congress.
But the majority of large environmental groups continue to support the legislative process. They have faith that the legislation's long-term goal of an 80 percent emissions reduction by 2050 -- a target in line with both the science and Obama's long-stated pledges -- will be met and that the short-term target may even be exceeded, thanks to the boost for renewable energy and energy efficiency also included in the bill. "The way this system works there will be synergies," the congressional source said. "We will do better -- the green economy will outperform the target." In any case, the team Obama has put into place is not likely to venture beyond the realities in Congress -- especially chief envoy Stern, who was deputy climate negotiator during the Clinton administration. He was there when, before the Kyoto talks had even concluded, the U.S. Senate delivered a 95-0 nonbinding vote of opposition due to concerns that developing countries like China and India would not have to cut their emissions. President Clinton never even sought the needed ratification in the Senate in his last two years in office, and President Bush then formally abandoned the process.
People who know Stern say it is apparent he does not want a repeat of the Kyoto debacle. From the time he was appointed in January, Stern and his deputy, Jonathan Pershing -- former head of the climate program at the World Resources Institute, one of the environmental groups that forged the USCAP coalition with business -- determined that they would keep a two-way communication open with interest groups. The pair has had seven meetings with representatives of environmental groups and the so-called BINGOS (business and industry non-governmental organizations who are observers to the treaty negotiations), the State Department confirmed. Moreover, the department says the two have had well over 100 private meetings with businesses and environmental leaders.
One person who has met with Stern is his former boss, Stuart Eizenstat, who was the Clinton administration's chief negotiator on the Kyoto protocol. Eizenstat said he told Stern that managing expectations would be one of his most important tasks. "You're turning around a huge ocean liner that's been going in one direction for the whole industrial revolution," says Eizenstat. "It is difficult and requires time. It requires creativity. It requires adaptability. It requires flexibility. We can't make, in this legislation, the perfect the enemy of the good."
When John Bruton, the EU's ambassador to the United States, expressed exasperation over the Senate's slowness in taking up climate change legislation, Stern responded like a man who had traveled light years from his ovation in Bonn just six months earlier. "It may be some people on the other side of the pond don't understand the [U.S.] system that well. But that's the way our system works, and we're pushing ahead," he said.
Knowing that Kyoto's lack of emissions-reduction obligations for developing countries has been the biggest sticking point for Congress, Stern has focused much of his effort outside the formal climate treaty negotiations involving 192 countries. He and his team have worked closely with the "major economies forum" that was started under the Bush administration -- a group of 17 countries, including fast-developing China, India, and Brazil. These 17 together account for more than three-quarters of the world's carbon emissions. The team also has been meeting one-on-one with representatives of the developing nations in efforts to strike bilateral deals that likely would focus on initiatives that China, India, and Brazil have been willing to take on renewable energy, energy efficiency, and forest protection, even while they have shunned mandatory cuts in their carbon emissions.
Stern's view is that these initiatives, although modest, are steps in the right direction. "If we're smart about this … we can find a way to capture the positive facts on the ground and shape a workable, if not a perfect agreement," Stern said in a recent forum in Washington. And in congressional testimony, he explained further: "The thing that is going to allow us to get this done -- if we can get it done -- is combining a sense of what science requires with a sense of pragmatism …. We can get something done if it's based on what we all need. We can't get something done if it's based on what we all ideally want."
Reprinted with permission from the Center for Public Integrity.