Corporations and climate change

We can’t trust the future of our planet to big business, argues Amy Thomas

 

On the surface, it seems corporations have changed their attitude to climate change. In 2000, companies like BP, Shell, Dupont and Morgan Stanley defected from the denialist organisation they’d set up in 1989, the Global Climate Coalition, and formed a new group—the Partnership for Climate Action. They announced their intentions to take “concrete steps to assess opportunities for emissions reductions”.
BP was one of the first to take a “concrete step”, changing their name from British Petroleum to “Beyond Petroleum” and including a sunflower in their logo.
Some environmentalists have embraced corporations’ emerging climate consciousness. The strategy of Melbourne’s Climate Emergency Network includes winning over “elites”—inviting them to the launch of Safe Climate Australia. Since then, Safe Climate Australia has accepted funding from Mercedes Benz and NAB among others, and youth climate conference PowerShift took $5000 from Westpac, the single largest shareholder in BHP Billiton.
The shift in corporate attitudes began soon after the anti-capitalist protests in Seattle in 1999. Public critiques of corporate profiteering had becoming more mainstream. Books like Naomi Klein’s No Logo sold in the millions. This, plus the Kyoto Protocol of 1998 and the 2001 UN Intergovernmental Panel on Climate Change’s Third Assessment Report, helped to shift corporations away from a strategy of vigorous denialism. The millions previously spent attempting to discredit climate science was re-directed to consultants who promised to “green” corporate images.
But dig a little below the surface and the problem of looking for allies in the corporate world becomes clear. The new corporate interest in a green image is a strategy to hijack climate change concern—and turn it into something compatible with corporate interests.
There is no doubt that some industry leaders regard climate change as a real problem. Some businesses will be adversely affected by it—through higher insurance premiums, higher crop prices and the loss of “fixed capital” (infrastructure).
But genuine concern is not the main motivator— primarily corporations are using climate change for their benefit. They have found new ways of profiteering through market schemes and false “solutions”, and are deflecting blame for climate change away from corporations and states and back onto consumers and the poor. Even those concerned about climate change have worked to implement “solutions” that pose no challenge to business-as-usual.

Greening their image
A survey by accounting firm Accenture in October 2007 showed that 81 per cent of consumers thought climate change would directly affect their lives—and 89 per cent of those indicated they would switch to energy providers offering products that emitted less carbon. Sixty four per cent said they would be willing to pay a higher price.
The book Essential Managers: Green Business, published in 2008, advises: “Businesses that convince customers that the money they spend will not be used to damage the planet will find that consumers respond well.”
It advises corporations to “consider working in partnership with an NGO or charity” because “the public trust these organisations so will be more likely to believe your claims”.
Most multinational corporations are only too willing to advertise their “green” credentials. In 2008 the oil giant Shell attempted to sell a vastly polluting oil project in Canada with an advertisement that claimed “we invest today’s profits in tomorrow’s solutions… continued invest ment in technology is one of the key ways we are able to address this challenge, and continue to secure a profitable and sustainable future.” Shell explained it was harnessing its technical expertise “to unlock the potential of the vast Canadian oil sands deposits”.
The Advertising Standards Authority fined Shell, stating the obvious—that “oil sand developments had considerable social and economic impacts on water conservation, greenhouse gas emissions, land disturbance and waste management” and that Shell could not reasonably call them “sustainable”.
Shell, however, seems little dissuaded by efforts to keep tabs on their greenwash. They had already been fined in 2007 by both UK and Dutch advertising authorities for claiming in a European advertisement that they used all their waste C02 to “grow flowers”.
Other oil companies follow a similar tack. BP, which emitted 1.3 billion tonnes of CO2 into the atmopshere in 2007, advertises its strategy for an “energy mix”. They point to their purchase of Solarex—the world’s largest manufacturer of solar panels—and the setting up of a renewable energy arm. But the $45 million spent on Solarex is a quarter of what it spent revamping its green image in 2005.
Tesco’s chief executive gave the game away in an article designed to combat accusations that Tesco was involved in greenwash: “the truth is that Tesco has been getting greener for years… There are sound commercial reasons for doing so. We’d be doing many of these things even if we had no concern for the environment at all.”
Green PR helps to generate profits—and quell criticisms. Green consultancy companies like Ecos have found there are huge profits to be made in manufacturing greenwash. They were employed by BHP to engage with environmentalists and community organisations opposed to the Ok Tedi mine in Papua New Guinea to “turn a crisis into a dialogue”. The environmental destruction caused by the mine is uncontested—even the World Bank, hardly a radical organisation, called for its closure because it polluted local rivers.
Ecos helped BHP lobby the PNG government for legislation that protects it from any legal action taken after its withdrawal from the mine—like that of landowners who wanted to sue BHP for breach of its 1996 promise not to continue to pollute the rivers.
Ecos were also employed to help Cotton Australia counter a campaign to ban the poisonous use of Endosulfan, a pesticide which is toxic to humans, animals, birds, fish, plants and insects.
Key environment groups were signed on to provide advice and Cotton Australia talked of the “positive marketing and branding of Australian cotton internationally”—while they continued to lobby against water restrictions and use Endosulfan until it was banned in 2001. Past Ecos employees include former (and current) environmentalists, like Rick Gilding, former head of Greenpeace International, and Blair Palese, current CEO of 350.org Australia.

Consumer power?
Another popular element of corporate strategy is to talk about “empowering” consumers to make decisions about green products.
A Climate Change Summit sponsored by Shell in the UK chose the slogan “it’s the consumer, stupid”. Heather Rogers has traced the history of business-led campaigns that set out to create the idea that individuals are the primary source of pollution: “In the 1950s, the group Keep America Beautiful was formed by industry to pre-empt legal restrictions on disposable goods, namely packaging. Through an elaborate public relations campaign the organisation generated a popular narrative about garbage that shifted the responsibility from industry to the individual… its goal was to distract people from questioning the viability of an increasingly trash-reliant marketplace.”
UK companies have adopted this approach to climate change with “carbon labelling”. Individual consumers have negligible market power and influence. But the delegation of responsibility works to keep the heat off business.
Schemes that encourage consumers to purchase green energy by paying extra on their energy bill—called GreenPower in Australia—are also popular. Some climate change campaign groups even advertise GreenPower on their web site and run campaigns promoting it. But the Australian Competition and Consumer Commission (ACCC) has admitted that it cannot definitely say whether GreenPower is genuinely reducing emissions or increasing the use of renewable energy.
Australian consumer group Choice banned a GreenPower company called GreenSwitch in 2008 for taking money from customers to buy GreenPower certificates, but failing to buy all the certificates required.

Greenhouse mafia
“Greenwash” by business is not confined simply to reworking the image of their products—but to the kind of “solutions” that corporations lobby for with governments and during international negotiations.
Guy Pearse has described in his essay Quarry Vision how the “greenhouse mafia”—an array of fossil fuel, electricity, mining and refining industry leaders—monopolise climate change policy-making in Australia. Ross Garnaut, the free market economist employed by the Rudd government to undertake its climate change Green Paper, is himself chairman of Lihir Gold Limited and director of Ok Tedi Gold Mine.
Lobbyists and their backers consistently seek “solutions” to climate change within the framework of business-as-usual, either by entrenching current practices or by opening new markets for commodification and exploitation.
At Copenhagen, the World Business Council for Sustainable Development promoted a strategy of “self-regulation”—and opposed legally binding environment and social standards for corporate activities. They advocated a global carbon market, agrofuels, nuclear energy and “clean coal”.
Emissions trading is central to most states’ climate change strategy, Kevin Rudd’s Carbon Pollution Reduction Scheme (CPRS) being a prime example. Well-funded, high emissions businesses can buy the “right to pollute” on the permits markets.
As Clive Spash documents in The Brave New World of Carbon Trading, emissions trading encourages information distortion and cheating because companies themselves supply figures. Bigger companies lobby for better deals and free permits—compensation in Rudd’s CPRS amounts to something near $24 billion.
Some industries make windfall profits from this—the US nuclear industry is expecting over $1 billion in free permits from Obama’s climate bill. The EU’s emissions scheme crashed because of an over-allocation of permits—but not before one corporation made enough off trading and selling in the carbon market to open a coal-fired power station. A recent report by Point Carbon estimated the global carbon market would be worth US$170 billion by 2010.
Carbon “offset” projects are also key to corporate strategy, because they allow business to “outsource” the cost of reducing emissions by supposedly reducing them overseas, and continuing to pollute as usual at home.
Both Rudd and Obama’s climate schemes allow companies to meet their entire carbon targets through offsets. It doesn’t take a genius to realise that investing in “tree plantation” overseas does nothing if fossil fuel extraction continues—in fact, it leads to a total adding of greenhouses gases to the atmosphere. Trees die and burn down.
This “loophole” in offset schemes gained some publicity when a forest sponsored by band Coldplay, designed to offset their album, A Rush of Blood to the Head, burnt down. Coldplay’s forest was also typical of offset schemes for another reason—those employed to tend to the trees never got paid.
These kinds of “solutions” are the end result of strategies like that of BP to “focus efforts on influencing policy and regulation… encouraging market mechanisms.” While NGOs were blocked from entering the Copenhagen conference venue—some, like Friends of the Earth International, were outright banned—corporate lobbyists remained inside.

Profit and competition
It’s obvious to any one who cares to look that the “green” strategies of corporations are a sham. Attempts by corporations—and by the states that represent them—to deal with climate change are an attempt to combine two contradictory imperatives.
To avoid instability, climate chaos does need to be mitigated. Some business leaders see this. But they can’t break out of the pressure to consistently maximise profitability and out compete rivals.
Cutting emissions means shutting down coal-fired power stations. It means massive investment into infrastructure like vast large-scale solar thermal plants and domestic high-speed trains.
This kind of investment is not immediately profitable. The amount of investment that is needed would take decades to pay off.
Beyond Zero Emissions has estimated Australia’s energy transition would cost approximately $40 billion a year for ten years. The effect of the economic crisis means corporations are even less likely than before to make these investments. States originally funded the expensive infrastructure for coal-fired power (though much of it has since been sold off to corporations to profit from).
The reality of constant competition compels capitalists to always be seeking more ways to accumulate profit. This is a requirement of business. Firms need to consistently reinvest in the latest technology and commodities to keep up with competitors. A firm that treats its workers like human beings and tries to produce goods ethically will quickly go bust.  As Marx said, the mantra of the capitalist is: “Accumulate, accumulate, that is both Moses and the prophets!”
Major corporations are aligned against real action because no firm or nation wants to risk its profitability and status in the world system. In short, human and environmental need is always secondary to the concern to profit. This is why leaders like Rudd look to deflect blame for action onto other economies and claim that cannot act until China and India take the lead.
The global economy is powered by fossil fuels. Those countries whose economies are most wedded to carbon-intensive production—those who would find it most expensive to break out of this pattern—are the most determined against real solutions. The richest corporation in Australia is by far BHP Billiton, worth $59.5 bilion in 2008, closely followed by Wesfarmers and Caltex.
Globally, most of the fossil fuel giants have their base in the United States. Shell, ExxonMobil, BP and Chevron are all based there and are all in the top ten of the richest corporations in the world. They make their money digging up fossil fuels and building infrastructure to use it.
The result of leaving the planet in their hands is easy to see. Emissions are rising 3 per cent each year, the highest ever in human history.
NASA climate scientist James Hansen estimates that if we continue to burn fossil fuel at this rate, the earth will head to an ice-free condition, with sea levels 75 metres higher than today. The arrogance of the corporations is astonishing—and deadly. We need strategies for action that work to take the power out of their hands—and a movement that’s willing to do so.

 

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