On Jan. 23, the Wall Street Journal reported in a front-page article:
“For years, the fight over the Earth’s rising temperature has been mostly over what’s causing it: fossil-fuel emissions or
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“Yesterday, 10 companies, including industrial giants that make everything from bulldozers to chemicals to electricity, joined environmental groups in calling for a federal law to ‘slow, stop and reverse the growth’ of global-warming emissions ‘over the shortest period of time reasonably achievable.’”
Have the capitalist polluters finally seen the light about global warming? Does this represent some sort of “Kumbaya moment” as an energy company CEO called it, whereby the polluters and environmentalists join hands and sing as they walk into a future of reduced emissions?
No. It’s capitalist business as usual for a bunch of CEOs who are beginning to see not the light but the writing on the wall. They want to lessen the impact on their own company or industry of any future emissions-control legislation.
According to the WSJ, “The biggest question going forward no longer is whether fossil-fuel emissions should be curbed. It’s who will foot the bill for the cleanup—and that battle is heating up.”
Here’s what’s being proposed:
The 10 companies, joined by four environmental groups, urged Congress to establish a long-term “target zone” of reducing emissions between 60 and 80 percent below today’s levels by 2050.
In addition, they suggested shorter-term targets including:
(1) Keeping emissions at 100 to 105 percent of today’s levels within five years of “rapid enactment.”
(2) Reducing emissions to 90 to 100 percent of today’s levels within 10 years of enactment.
(3) Reducing emissions to 70 to 90 percent of today’s levels within 15 years of enactment.
Certainly, any emission reduction targets are a step in the right direction, since carbon emissions—linked to mostly to the energy and automobile industries—are understood by the scientific community to be a primary cause of global climate change. How do they propose to achieve these goals?
Cap and trade
There are several proposals being considered by Congress at this time.
While there are differences between them, they all rely on a “cap and trade” system to regulate emissions. Under cap and trade, the government sets a ceiling on how much CO2 the United States could emit each year, either by the economy as a whole or by a particular economic sector.
Then the government creates “pollution permits,” which allow the permit holder to emit one ton of the gas. These permits are divided up among companies. Companies could buy and sell permits among themselves on a greenhouse-gas market. Companies that decide it’s “too expensive” to cut their own emissions could buy extra emission permits from companies that had more than they needed.
The underlying logic of this convoluted system is that the “magic of the marketplace” will reduce emissions without any company being “forced” to take action that cuts into profits.
The reality is far different.
As the proposals grind their way through the legislative process, different companies and economic sectors are scrambling to word the regulations in such as way as to be able to pay the lowest price for emissions reductions or to be positioned to make a quick buck on emissions reduction products. As the WSJ puts it, “Some see a lucrative new market in clean-energy technologies. Many figure a regulation is politically inevitable and they want to be in the room when it’s negotiated, to minimize the burden that falls on them.”
Fighting among thieves
The United States is the biggest producer of greenhouse gases in the world. Within the United States, automakers and oil producers are some of the biggest producers of carbon emissions. Both industries are concerned about the impact of a cap, so they’re lashing out at each other. “The Big Three auto companies are making speeches and running advertisements calling on Big Oil to crank out more low-carbon alternative fuels such as corn-based ethanol. Big Oil, in its own speeches and ads, says the automakers should build more-efficient cars.”
There is also sparring among regional energy utilities to avoid the impact of a cap. If the cap regulations are written one way, they will help utilities in the Southeast or the Midwest, which burn lots of coal, a particularly carbon-intensive fuel. Differently written regulations would help utilities on the West Coast, the Northeast and the Gulf Coast that use mainly natural gas and nuclear energy, which produce little to no carbon emissions.
Lobbyists from the energy industry, utilities, auto and other corporate interests are working overtime to shape the eventual carbon emissions control regulations to protect profits. Some are still fighting any U.S. limit on carbon emissions.
For instance, Steven Rowlan, director of environmental affairs for Nucor Corp., one of the biggest U.S. steelmakers, argues that is would be “unfair” to require the U.S. steel industry to make further emission cuts while its competitors in the developing world have no cap.
Instead, Rowlan calls for the U.S. government to slap trade restrictions on developing-world steelmakers, requiring them to meet minimum environmental standards as a condition for exporting their products to the United States. This would pass on the cost of reductions to industries in the poorest countries, while leaving untouched the profits of industries in the United States, the biggest producer of greenhouse gases.
However one looks at it, the corporate polluters aren’t singing “Kumbaya” with the environmental movement. It looks more like a game of hot potato where each player is trying to pass the impact of carbon emissions reductions onto someone else.
And what is the role of Congress in all this?
The Democrats know how to talk a good game about global warming. But the political will isn’t there when it comes to creating regulations that will actually reduce emissions and reverse the climate change trend.
In the absence of a militant, grassroots movement for environmental protection, the primary influence on this legislative process is that of industry lobbyists who are fighting not for the protection of the whole planet for future generations but for the short-term profits of their own company or sector.
