Multinational Lobbying on Climate Change

Large Multinational companies have been highly influential in the climate talks. Companies do occasionally act individually, but more often by an array of lobby organisations representing a coalition of large companies. They have effectively ensured that the climate change agenda is the big business agenda, where the environment must take second place to corporate profits.

As in all international negotiations, large business interests have ensured that they are fully involved at every stage, and are actively setting the agenda. There are many reasons why they are more easily able to do this than other interest groups: the large bugdets they have to spend, the experience of organising on an international level, the wide acceptance by governments of the myth that big business interest is the same as the public interest, and the power that corporations already wield over the economies of countries. Environmental NGOs, with their smaller budgets and reluctance to take overtly political stands, cannot compete with the business lobby. And radical grassroots campaigns rarely enter the arena of international negotiations, and gain little respect if they do. All this means that the outcome of international negotiations is rarely very different from the demands of the corporate lobby.

There has been a shift in opinion about climate change by business over the last few years. It would be a fallacy for environmentalists to think that all business was against any action or agreement on climate change, as that view is no longer the dominant one. But it would be just as dangerous to believe that the more progressive views which are now being heard represent a step in the right direction; they have more to do with consolidating the profits and power of industry than saving the climate. The positions of the various lobby groups are presented below.

The Contrarians

There is still a large part of the business lobby which is opposed to any action on climate change. Most prominent amongst these are the Global Climate Coalition, a lobby group comprised predominantly of American oil and car multinationals such as Exxon, Ford, Texaco and General Motors. They have employed a wide variety of tactics to prevent an agreement from taking place. For example, they have funded and publicised scientists whose views are contrary to that of the UN's scientific panel, the IPCC. Claims have been made that there was insufficient evidence that climate change was likely to happen, or that if it did, its effects would be minimal. However, this tactic has now been almost universally discredited. Even Al Gore, in his speech at Kyoto, showed that he believed contrarian arguments were untenable, when he made a point of saying that it was our duty to believe the IPCC, as an independant summary of mainsteam scientific opinion, rather than industry sponsored scientists.

The GCC also funded a series of television adverts in America in the run up to Kyoto, and it is thought that this approach has been successful in reducing popular support in the USA for action on climate change.

The core of the GCC's message at the moment is that the scientific evidence for global warming is not good enough to warrent actions aimed solely at reducing or stabilising greenhouse gases. Such actions, they believe, will seriously harm the US economy. They are very US-centric, complaining for example that the Kyoto Protocol will mean the 'export of American jobs to countries like Mexico, India and China'. They do, however, support actions that they believe are justifiable for other economic or environmental reasons and highlight joint implementation and technology transfer as examples of these.

The Global Climate Information Project (GCIP) is a coalition of American business and trade unions with the primary aim of influencing public opinion in the US. Their website goes under the name 'climatefacts', but it actually toes a very similar contrarian, 'America first', line to that of the GCC.

The American Petroleum Institute is a lobby group comprised of US oil companies. They have placed themselves in firm opposition to the Kyoto Protocol on the grounds that implementing it will have an adverse effect on the US economy. They are actively lobbying that the US senate does not ratify the protocol.

The 'sustainable development through economic growth' lobby

Contrarians such as the GCC are widely discredited, but there is less critisism of the equally ludicrous alternative. In fact, when Shell pulled out of the GCC, Friends of the Earth (England and Wales) acclaimed it as a 'major campaign victory'. It is no victory however, merely a recognition by the likes of Shell that they can harness the concerns over climate change to promote their profits, and inthe longer term, their free market globalisation agenda. Groupings such as the World Business Council on Sustainable Development, the European Round Table of Industrialists and so on, make it clear that they wish to see global action taken on climate change. This stance often comes as a surprise to those who associate business interests with a stubborn insistance on continued pollution. But it should not do - any company thinking rationally would prefer to have to deal with an agreed, predictable emmissions control mechanism than the unpredictable nature of climate change in the future. So 'green capitalism' has been developed, the cornerstone of which is the mantra 'Economic growth is the solution to sustainable development'. The theory behind this, in essence is:

New clean, efficient technology is needed - and economic growth will provide the incentives to develop that technology
The technology, and expertise to use it, must diffuse rapidly to all parts of the world. Hence markets must be opened up
As long as a mechanism is created which creates incentives for emissions cuts and diffusion of lower emission technology, then that is a stimulus to investment and hence to growth. Regulations or taxes discouraging emissions, on the other hand, are barriers to growth. This should be a guiding principle when legislating on climate change.
Less developed countries have a legitimite right to aspire towards the standard of living that is enjoyed in the West. Pursuing global economic growth can deliver this and is therefore necessary.

This position in essence is similar to the 'greenwash' phenomonen, where companies produce PR and make token changes in order to appear 'environmentally friendly'. However there is a subtle difference; they have spotted a way to make money out of token environmentalism, and when there's profits at stake, who cares what happens to the climate?

Several lobby groups have produced reports on the direction they think climate policy should go. They will be analysed below, but since they all make almost identical points, we will summarise those here.

Flexibility Mechanisms
The Climate Action Network views mechanisms such as emissions trading and joint implementation merely as loopholes whereby western countries are able to avoid domestic emissions reductions. But to 'free market environmentalists' they are an example of a 'win-win' situation. It seems to be a low cost mechanism by which they believe they can prevent climate change, Also, by providing a means for the entry inot new markets, they can promote their globalisation agenda and consolidate their position of power. And of course, as partners in the schemes, they can net profits for doing so. In other words, these are schemes that will benefit corporations regardless of any effect they might have of mitigating climate change.

As an example, the WBSCD summarises the arguments for Joint Implementation thus:
Many Businesses are attracted to JI because it provides a mechanism to:

reduce GHG emissions at low cost; to reduce both cost and policy risks associated with global climate change:
Earn a competitive rate of return on GHG emission reduction investments;
Build new, strategic partnerships; to gain entry into rapidly growing markets; and
gain credits for climate change benefits, which may have a market value in the future

Source: WBSCD, International Business Action on Climate Change, 1997

The literature which corporate lobby groups put out usually assumes that this will be the main, if not only, method by which emissions will be reduced. It is a method which relies on the free market, not government regulation.

In the Rising Tide article on globalisation, it will be argued that this approach cannot result in emissions reductions of the scale necessary, and will do nothing to address the wider issues of environmental sustainability and social justice outside of climate change. This is partly because it accelerates the pace at which Western Multinationals can gain a foothold, and eventually dominate, less developed parts of the world.

Technological Futures
Market-driven technological improvement is a foundation stone of the 'growth=environmentalism' approach. The belief is that market incentives, whether they be fuel bills or quotas to trade, will lead to new, more efficient technologies, hence less fuel will be used. Examples of this range from low energy lightbulbs, to efficient power stations, to the increasing use of telecommunications rather than travel. Worryingly mention is often made of 'novel methods of carbon sequestration', otherwise known as climate engineering. Voluntary Action
Industry also tries to allay fears by claiming that the problem is partially being solved already, thanks to its own voluntary action. They say that since energy reductions are also reductions in their costs, there will be incentives to make cuts anyway, and with the support of governments this is easier.

Of course, multinational companies must take the blame for causing a large part of the problem, a fact which they would have difficulty refuting. By systematically destroying local economies the world over, they have created a system where the economies of scale brought about by centralised production vastly outweigh the extra costs of increased energy use. But now that has largely been achieved, industry thinks that the next major efficiency gains are to be made by cutting energy costs.

Voluntary action can come in a variety of forms. It can include legally binding negotiated settlements between government and industry - but in this case industry would want something in return.

Voluntary action should be resisted because it cuts emissions only when the conditions for doing so are amenable to business. The reliance on government/ industry co-operation is worrying because it further consolidates the role of big business in decision making, and lessens the inclination of governments to stand up for people and planet against corporate interests.

Groups Lobbying for this Approach

The World Business Council for Sustainable Development is an international group comprising over 100 CEOs of transnational companies. They have been instrumental in pushing forward the case for JI and trading as incentives for action by business.

The WBSCD have been pursuing a project called 'International Business Action on Climate Change', launched at COP2 in Geneva in 1996, aimed at showing some examples of positive changes business could make, mainly focussed around Joint Implementation projects.

The WBSCD is now focussing on the details of the flexibility mechanisms that need to be worked out over the next few years - ensuring they are as free-market friendly as possible. They advise against too strictly enforcing the criteria that JI projects must result in additional reductions to what otherwise would have happened, claiming that 'a radical interpretation of the additionality principle could cripple the whole concept. ' Their ideas on emissions trading centre around encouraging the maximum number of trades - all sectors of the economy should be included, trading at the company level etc.

The European Round Table of Industrialists (ERT) comprises the heads of some of Europe's biggest companies, and has the mission of guiding the European Union in a direction amenable to big business. Prior to the Kyoto conference they issued a report called climate change - an ERT report on positive action. This gives examples of some of the voluntary reductions which are taking place, and outlines several criteria for assessing climate policies (does the policy maintain the competitiveness of European industry, do the benefits outweigh the costs, does it provide a long term framework for industry to plan in, does it reward voluntary action?). It claims that the suggested European carbon tax is not in the interests of European competitiveness, and therefore should not be implemented.

Other activities of the ERT cast doubt on their environmental claims. They are also responsible for the introduction of Trans-European Networks, a set of new roads and high speed rail links built primarily for the transport of freight accross Europe, which will add considerably to Europe's CO₂ emissions. Also the European Single Market, and the expansion of the EU into the former Eastern Bloc, both advocated by the ERT, mean another increase in international trade, and hence more emissions

The Pew Centre on Climate Change is a new American lobby organisation formed to put forward the 'corporate environmentalist' line. It's propaganda describes it as being ahead of the field - the 17 member companies are known as the Environment Leadership Council. Their director, Eileen Claussen,exploits the misconception that business don't want anything to do with climate change in a speech in August 1998: " I am not sure I could have imagined 6 months ago that 17 corporate leaders would step forward on this issue and agree to voluntarily begin responding to the challenges presented by global climate change."

So will the Pew Centre's stance any more welcome than any other lobby group's? They are still in favour of emissions trading, technological solutions, and so on, and have so far offered no indication that their members would be prepared to sacrifice their profitability for the sake of the climate

The Pew Centre claims to dislike the polarisation which tends to take place between environmental groups and business, and wishes to concentrate on moving forward 'the consensus building centre'. This attempt to co-opt the more moderate elements of the environmental movement into the business lobby should be noted by all those who are cynical about business motives, and is another reason for radical activists to be informed about and involved in international politics.

In October 1998 it produced a report aimed at the US government 'Analysis of Early Action Crediting Proposals'. In it they call for a scheme of credits for voluntary action taking place in the next few years , which would later be tradable in when the details of a domestic emissions trading regime. This is a welcome proposal to the extent that it is a counterbalance to the industry groups which are adamantly against any form of immediate domestic action in the US. However, a more cynical view would be that this is a call from a group of companies which, due to their own particular circumstances, are ready to make immediate reductions and want to gain the competitive edge, over the rest of industry which would need substantial restructuring in order to cut emissions.

In a position paper dated June 1998, CEFIC, the European chemical industry lobby, outline their support for joint implementation, emissions trading, targets for all countries and long term agreements. They point to the large cuts in emissions made by the European chemical industry over the last few years as proof that voluntary commitments can work. However they express some concern over the inclusion of HFCs in the basket of greenhouse gases to cut, as many chemical manufacturers have transferred to these as an alternative to the ozone destroying CFCs and HCFCs.

Keidanren is the main lobby organisation for Japanese industrialists. Like the WBSCD and ERT, it wishes to see action on climate change, but on it's terms. It is in favour of joint implementation and emissions trading, but against a carbon tax, arguing that unless it is applied worlwide then it would cause industry to relocate.

The Nuclear Industry Lobby

The Nuclear Industry has been keen to point out that nuclear power generation involves comparatively little greenhouse gas emissions, and so they suggest that it is part of the solution to global warming. Several Nuclear Lobby groups were represented at Kyoto: the Nuclear Energy Institute, the Uranium Institute, the Japan Atomic Industrial Forum and the European Atomic Forum. In addition, the International Atomic Energy Agency of the UN, and the Nuclear Energy Agency of the OECD, both produce 'nuclear-is-sustainable' propaganda, despite being regulatory agencies rather than explicitly representing the nuclear industry's interests.

Apart from repeating their assertion that Nuclear Power is sustainable, the nuclear lobby has not chosen to involve themselves much with the intricacies of the negotiations. However, at the recent FCCC meeting in Bonn, they made a statement asking that nuclear projects be permitted for CDM credits (various environmental groups are campaigning for a specific exemption for nuclear projects), and that allocations of permits for emissions trading be made according to the amount of electricity produced (so that nuclear companies could trade too).

Needless to say, most environmentalists are strongly opposed to any suggestion that nuclear energy could largely replace fossil fuels, for reasons of safety, waste and weapons proliferation. This view is to some extent supported by the IPCC, who calculate that "the potential risks...[of the large scale replacement of fossil fuels with nuclear energy] ...would be enormous"